Michelle ThompsonAn up-to-the-minute study published on Wednesday reveals that climate change-induced record-breaking heat waves, severe floods, and acute wildfires will exact a monumental toll. This toll amounts to an estimated 19% decrease in global income within the next 26 years. The ramifications of this financial blow won’t be confined to major governments and corporations alone. The United Nations warns that even with current climate policies and objectives, the world is hurtling towards nearly 3 degrees of global warming in the next century. Individuals are poised to shoulder the economic strain, according to researchers.
The study, featured in Nature, underscores that short-term financial hardships are inevitable, regardless of whether governments intensify their efforts to address the crisis promptly. Maximilian Kotz and Leonie Wenz, researchers from the Potsdam Institute of Climate Impact Research, emphasized via email to CNN that these impacts are indistinguishable across various future emission scenarios until 2049. However, they highlight that immediate measures to mitigate climate change could alleviate some long-term losses.
Noah Diffenbaugh, an environmental researcher and professor at Stanford University, elucidated that the economic repercussions of climate change will manifest diversely. Not only do extreme weather events necessitate expensive repairs to damaged property, but rising temperatures can also adversely affect agriculture, labor productivity, and even cognitive abilities in certain instances.
There’s still time to avert forthcoming losses.
Although discussions on the expense of addressing climate change often focus on potentially costly mitigation efforts such as reducing oil and gas usage or developing technology to extract carbon pollution from the atmosphere, the study contends that the immediate financial toll of climate change already surpasses the cost of addressing the crisis. According to researchers, complying with the Paris Climate Agreement— the international pact involving nearly 200 nations aimed at combating climate change—would cost the global economy around $6 trillion by 2050. In contrast, the study estimates the economic damage caused by climate change to be approximately $38 trillion. “Adaptation could provide means to mitigate these damages,” noted researchers Kotz and Wenz.
Bernardo Bastien, a researcher at the Scripps Institute of Oceanography at the University of California San Diego, suggested that adaptation strategies, which aim to respond to climate change by mitigating its adverse effects rather than reducing it, could yield long-term cost savings. For instance, he cited the example of utility companies in California shutting down electrical grids to prevent wildfires. “While it’s costly, it’s also imperative,” Bastien remarked, emphasizing the necessity of such measures.
The study acknowledges that some economic damage is inevitable before 2049. However, its authors argue that benefits from mitigating climate change could become apparent in the following decades. “Damage estimates vary significantly across emission scenarios after 2049, highlighting the evident advantages of mitigation from a purely economic perspective,” the study concluded.
Less affluent nations experience a more substantial decline in income.
However, the anticipated economic impact won’t be evenly spread out. Diffenbaugh, who wasn’t involved in the study, emphasized that while understanding the overall impact of climate change is crucial, it’s essential to recognize the stark disparities in who bears the brunt of its effects. “We have clear evidence that, overall, the poor suffer more,” he stated. “This is likely to be the case with the global warming that has already occurred and even with minor increases in global warming.”
The study published in Nature also assessed the economic damage across different regions. It forecasts a lower reduction in income over the next 26 years for North America and Europe, at 11%, compared to South Asia and Africa, which are expected to experience a 22% decrease.
While the United States, a historically significant polluter, is predicted to face a smaller economic impact than some neighboring countries, it won’t be immune to the disruptions caused by a warming planet—especially affecting younger generations of Americans. According to a separate report published in Consumer Reports by global consulting firm ICF, the lifetime personal cost of climate change for a baby born in the US in 2024 could amount to as much as $500,000.
The ICF report indicates that price increases on essential components of living expenses in the US will accumulate due to climate change. Housing costs are projected to rise by $125,000 over the lifetime of a person born in 2024 due to increased maintenance and insurance expenses resulting from the risks of flooding and other weather-related damage. Additionally, food prices are expected to increase by an estimated $33,000 over the lifetime of a 2024 baby due to disruptions in agriculture and supply chains. Other expenses such as energy, transportation, and healthcare are also anticipated to surge over the next few decades.
“For many Americans, this financial setback will necessitate tough choices regarding how to afford food, housing, and other daily expenses, which climate change is expected to increase by approximately 9% over their lifetime,” the report stated.
