Climate change causes global economy to shrink significantly
It could shrink by around a fifth by 2025
The global economy threatens to shrink by around a fifth by the middle of the century due to climate change.
“These damages exceed the costs that would be necessary to limit global warming to two degrees by a factor of six,”
wrote the research team led by Paul Weidelich from ETH Zurich in the study published in the journal ‘Nature Climate Change’.
For the calculation, the researchers evaluated data from the past 40 years from more than 1600 regions on how weather extremes have influenced economic growth. Based on climate models, they calculated how these are likely to affect the economy over the next 26 years.
Poor countries particularly affected
The expected damage varies from region to region. The poorest countries and those least responsible for climate change will be hit the hardest. For the countries with the lowest incomes, the calculated loss of income is 61 percent higher than for countries with higher incomes.
The losses are caused, for example, by a decline in agricultural yields as a result of climate change, losses in labor productivity or infrastructure damage due to changes in precipitation patterns. As the study does not take into account effects such as droughts or rising sea levels, the researchers assume that the total costs of climate change are likely to be significantly higher. Damage caused by storms or forest fires is also not included and could further increase the amount of damage.
