New research warns of a potential 19% decline in global income by 2050 due to extreme weather events intensified by climate change.
This financial burden won’t be limited to governments and corporations; individuals are likely to feel the sting as well. The study, published in Nature, highlights the urgency of climate action, emphasising that even immediate efforts won’t prevent some short-term economic pain.
“These impacts are unavoidable in the sense that they are indistinguishable across different future emission scenarios until 2049,” two of the study’s researchers from the Potsdam Institute of Climate Impact Research, Maximilian Kotz and Leonie Wenz, told CNN.
The researchers argue that taking immediate actions to mitigate climate change could reduce some long-term losses.
Noah Diffenbaugh, a professor and environmental researcher at Stanford University told CNN that the economic repercussions of climate change will manifest in various forms. Extreme weather events can lead to expensive property repairs, while higher temperatures can affect agriculture, labour productivity, and even cognitive abilities in certain situations.
The discussion surrounding the expense of addressing climate change often revolves around potentially costly mitigation efforts, such as reducing oil and gas usage or developing technology to capture carbon emissions from the atmosphere. However, according to the study, investing in greener technology, while crucial, may not be enough to counteract the already significant short-term financial impacts of climate change.
The researchers assert that the immediate economic consequences of climate change already surpass the costs of addressing the crisis. They estimate that adhering to the Paris Climate Agreement, an international accord aimed at combating climate change would incur a $6 trillion expense by 2050. In contrast, the study projects climate-related economic damages to reach $38 trillion by the same year.
“Adaptation could offer ways to reduce these damages,” the researchers Kotz and Wenz told CNN.
Bernardo Bastien, a researcher at the Scripps Institute of Oceanography at the University of California San Diego told the media outlet that adaptation strategies could help save money on a longer time horizon. Mr Bastien gave an example: utility companies in the state of California that have shut down the electrical grid to prevent wildfires.
“When you turn off electrical grids, you’re turning off industry and you’re turning off a lot of households that use electricity for their well-being,” Bastien said. “It’s very costly but very necessary.”
Although the study acknowledges that some economic harm is inevitable before 2049, the authors contend that the benefits of mitigating climate change could begin to manifest in the following decades.
The Nature study estimated the economic damage of different regions. North America and Europe are expected to see a lower income reduction in the next 26 years at 11%, compared to South Asia and Africa at 22%.