The economic damage from climate change is six times worse than we thought

financial loss caused climate change as six times worse than previously thought Global Warming according to a new study, wealth will decline at a rate commensurate with the economic losses of a protracted war.

A 1 degree Celsius increase in global temperature leads to a 12% drop in global gross domestic product (GDP), the researchers found, which is much higher than previous analyses. watchman.

The world has already warmed more than 1 degree Celsius since the pre-industrial era, and many climate scientists predict a 3 degree increase by the end of the century due to the continued burning of fossil fuels, according to the study. , there will be huge financial costs.

A 3 degree Celsius rise in temperature would lead to “more than a 50% sharp decline in output, capital and consumption by 2100,” the study said.

He adds that this economic loss is so heavy that “it can be compared to the economic damage caused by a permanent war within a country”.

“There will still be some economic growth, but by the end of the century, people could be 50 percent poorer than if there were no climate change,” said Harvard economist Adrien Bilal, a co-author of the study. Diego Känzig, economist at Northwestern University.

“I think anyone can imagine what they would do with twice as much as today’s income. It will change people’s lives.”

Costs comparable to war

Bilal stated that if it were not for the global warming observed in the last 50 years, people’s purchasing power would be 37% higher than it is now. If the climate crisis deepens, this lost wealth will match the kind of economic drain often seen in times of war.

“Let’s be clear that the comparison with war is only in terms of consumption and GDP – all the suffering and death of war, most importantly, is not included in this analysis,” said Bilal. “The comparison may seem shocking, but in terms of net GDP, there is an analogy there. This is a disturbing thought.”

The study estimates the social cost of carbon (the dollar value of the damage for each additional ton of carbon emissions) at $1,056 per ton, making a higher estimate of economic losses than previous studies. Accordingly, the US Environmental Protection Agency estimates this cost at $190 per ton.

Bilal said the new study takes a more “holistic” approach to the economic costs of climate change, analyzing it globally rather than at the level of individual countries. This approach, he said, embraces the interconnected nature of the impacts of heat waves, storms, floods and other worsening climate impacts that harm crop yields and reduce labor productivity and capital investment.

Losses even if the goal is achieved

The study shows that the economic impact of the climate crisis will be the same around the world, although low-income countries will start from a lower wealth point. This should prompt rich countries like the US to take action to reduce global warming emissions in their own economic interests.

The study shows that even with drastic reductions in emissions, climate change will have heavy economic costs. Even if global warming were limited to just over 1.5 degrees Celsius by the end of the century, a globally agreed goal that now seems out of reach, GDP losses would still be around 15%.

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