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A new study claims that the global economy could shrink by 19% by 2049 due to reduced productivity due to climate change. Although this number is significantly higher than previous studies, the authors argue that the number is conservative and could be as high as 29%. Percentage of world GDP. Climate change activists quickly took notice of the study and called for more aggressive steps to prevent climate change and fund mitigation efforts.
The study, “Economic Commitments for Climate Change,” was published in Nature on April 17 by researchers at the Potsdam Institute for Climate Impact Research, also known as PIK, a non-profit organization funded by the German government. It was announced on.
A 2023 study presented at the World Economic Forum predicts that the annual cost of climate change will be between $1.7 trillion and $3.1 trillion by 2050. “This includes the cost of damage to infrastructure, property, agriculture and human health.” This corresponds to his 1.5% to his 2.8% of the current world GDP.
The new study takes a more aggressive approach, calculating the cost of productivity losses in addition to mitigation efforts and damages. Specifically, the study will examine “the effects of average temperature on labor and agricultural productivity, the effects of temperature fluctuations on agricultural productivity and health, and the effects of precipitation on agricultural productivity, labor outcomes, and flood damage.” is being investigated.
The study looked at 1,600 regions and used 40 years of comparable data to make the calculations. They found that South Asia and Africa were the most affected, while Central Asia/Russia saw a significant reduction in the impact, including growth potential.
“Using an empirical approach that provides a strong lower bound on the persistence of economic growth impacts, the world economy will grow by 19% over the next 26 years (relative to the baseline), independent of future emissions choices. “Without climate effects, it would likely be in the 11-29% range, taking into account physical climate and empirical uncertainties.'' ”
This translates to annual damages of $19 trillion to $59 trillion by 2049, with a “middle ground” of $38 trillion. For calculation purposes, the researchers linked the value of the dollar to 2005. However, it also noted that despite the damage, income levels are still rising compared to today.
I'm not an economist, but in my opinion this data seems flawed. According to research published by NOAA in January 2024, average temperatures have risen 2°F since 1850. Over the same period, global GDP increased from $1.73 trillion to $134.8 trillion. If we accept the climate prediction models used in this study, we deny the resilience of human nature and our ability to overcome economic challenges.
Climate change advocates are understandably skeptical of the data, since it doesn't take into account impacts such as heat waves, sea level rise, tropical cyclones, tipping points, ecosystem damage, and human health. The calculations are based solely on temperature increases and rainfall.
The claim that climate change will shrink the global economy by 19% will no doubt continue to be repeated by climate change advocates. However, given that this is an outlier study, it should be taken with a grain of salt.
