Global GDP to face a 19% decline by 2050 due to climate change, study projects

With another round of Lok Sabha elections underway, politicians are making grand pledges to boost India’s economy to unprecedented heights. However, a new obstacle threatens not only India but the entire world's economic prospects: climate change.

Although the detrimental effects of climate change on economies have been acknowledged, quantifying its impact has proven challenging. Nonetheless, a recent study has provided a grim forecast, suggesting that climate change could slash global GDP by a substantial $38 trillion by 2050, equivalent to nearly a fifth of the world’s total GDP.

This projection is based on existing levels of carbon dioxide in the atmosphere, implying that even with stringent emission reduction measures, the damage is inevitable. Lead author Max Kotz emphasises the importance of mitigating further greenhouse gas emissions to mitigate future economic losses.

As usual, poorer nations, primarily tropical countries already grappling with climate change, will bear the brunt of its impact. Study author Anders Levermann notes that these countries, despite being least responsible for climate change, are projected to suffer income losses 60% greater than wealthier nations and 40% greater than higher-emitting countries, exacerbating existing economic disparities.

The study warns that surpassing the 2°C temperature increase limit outlined in the Paris Agreement could result in annual global damages reaching tens of trillions of dollars by 2100, with average regional income losses potentially reaching 60%, three times higher than if the limit is maintained.

Already, Earth's average surface temperature has surged 1.2°C above pre-industrial levels, intensifying extreme weather events such as heatwaves, droughts, floods, storms, and sea-level rise. 2024 is expected to be one of the hottest years on record.

To stay within the 2°C target, the study emphasises the necessity of increased investments in sustainable initiatives, echoing long-standing calls from climate experts. Additionally, the study acknowledges that its estimations may underestimate the true costs, as they exclude certain climate-related damages such as sea-level rise, intensified tropical cyclones, and deforestation.

As the global community grapples with the challenges posed by climate change, the study underscores the urgent need for collaborative efforts to mitigate its economic repercussions and protect both the planet and its inhabitants.

The research findings have been published in Nature and can be accessed here.