Impact On Economy Due To Climate Change: 38 Trillion Dollars In Damages Each Year

by | Apr 18, 2024 | Climate Crisis, Environmental News

Home » Environmental News » Climate Crisis » Impact On Economy Due To Climate Change: 38 Trillion Dollars In Damages Each Year

A groundbreaking study by the Potsdam Institute for Climate Impact Research (PIK) has forecasted alarming economic consequences due to climate change. As per the study, the impact on the economy due to climate change will amount to a staggering $38 trillion each year by 2050.

This estimate underscores the profound impact of global warming on various sectors. Those sectors include agriculture, infrastructure, productivity, and public health. This paints a grim picture of the future if emissions continue unabated.

The Unsettling Report

The report, supported by the German government, highlights that climate change will slow down economic growth. Moreover, it could slash up to 17% of the global GDP by the middle of the century.

Leonie Wenz, a climate data researcher at Potsdam and co-author of the study, emphasized the stark reality. “The world population is poorer than it would be without climate change. It costs us much less to protect the climate than not to,” she said.

Impact On Economy Due To Climate Change

The Cost Of Inaction

According to the findings, the economic fallout from allowing global temperatures to exceed 2 degrees Celsius above pre-industrial levels would be catastrophic.

The estimated $6 trillion needed to limit warming to within this threshold pales in comparison to the immense $38 trillion price tag of the damages if warming surpasses this critical point. This highlights a critical economic incentive for nations to aggressively pursue climate action.

Disproportionate Impact On Developing Nations

The PIK research dispels the notion that climate change could benefit certain countries. It asserts that virtually all nations would suffer economically.

However, poorer and developing nations are expected to bear the brunt of these impacts, exacerbating global inequalities. The study underscores the urgent need for equitable international efforts to mitigate climate risks and support vulnerable regions.

Future Projections And Urgent Action

The study’s estimates are based on projected climate trends. Those include temperature and rainfall changes but do not fully incorporate the potential damages from extreme weather events like hurricanes, wildfires, or rising sea levels.

Importantly, the research warns that if current emission rates persist and temperatures rise beyond 4 degrees Celsius, global income losses could skyrocket to a devastating 60% by the end of the century.

To combat these dire projections, governments worldwide must prioritize comprehensive climate action. Those actions should be to reduce emissions and to enhance resilience against climate-related impacts. The study highlights the critical importance of investing in adaptation measures and transitioning to low-carbon economies to safeguard against economic catastrophe.

In summary, the PIK study presents a stark economic reality. It shows a failure to address climate change will come at an exorbitant cost to the global economy.

The impact of climate change on the economy will have trillions of dollars at stake. Moreover, billions of dollars in livelihoods are on the line. In such a situation, concerted and immediate action is imperative to mitigate the worst impacts of climate change and secure a sustainable future for all.

Also Read: Positive Developments And Good News In Climate Change

 

Author

  • Dr. Emily Greenfield

    Dr. Emily Greenfield is a highly accomplished environmentalist with over 30 years of experience in writing, reviewing, and publishing content on various environmental topics. Hailing from the United States, she has dedicated her career to raising awareness about environmental issues and promoting sustainable practices.

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