The authors of a 2024 study published in the journal Nature examined the impact of a changing climate on economic futures.
It has been estimated that global income will fall by 19% by 2050, and that, by mid-century, there is a 99% chance that repairing climate damage will be more expensive than building resilience to it.
However, according to the Associated Press, the authors have updated these numbers due to minor data errors.
The new numbers show a 17% drop in overall revenue and a 91% chance that fixing the damage instead of building resilience will cost more.
What does a changing climate mean for the economy?
Many scientists have studied the impact of climate change on the economy, although much of the focus has been on extreme weather events, such as tornadoes, droughts, and floods.
However, the researchers in the 2024 study determined that global temperatures (which continue to rise) will have the greatest impact on the economy.
Rising temperatures affect labor productivity and crop yields, both of which affect the economy, and increase the intensity of extreme weather.
What’s more, because current temperatures are so unprecedented compared to historical averages — the planet hasn’t experienced a month below the 20th-century average since 1979, according to the National Centers for Environmental Information — they’re unpredictable.
Why is the economic impact of rising temperatures important?
Not only will ever-rising temperatures cost economies trillions of dollars (the original study estimated a $38 trillion bite to global income by 2049), but they will disproportionately affect lower-income regions.
This means that less wealthy areas will face the worst climate consequences, while not having enough money to adapt to these changes.
For example, one study estimated that Brazil will face a 33.1% decline in gross domestic product by 2100 due to increasingly higher temperatures.
Meanwhile, the 2024 study predicted that the poorest countries in the world will experience 61% more loss of income than the richest.
According to AP News, a climate economist at Columbia Business School, Gernot Wagner, said of the 2024 study, “The rapid accumulation of climate risks will only make the numbers rise further.”
How countries are addressing the issue of economic impact
Although the costs of addressing a changing climate are high, waiting to address it costs immensely more, as shown by the updated 2024 study.
As such, some governments are taking steps to mitigate climate damage. Pakistan has created a policy that allows companies to earn profits by investing in environmentally friendly projects, while Canada offers investment tax credits to encourage businesses to make sustainable investments.
Elsewhere, Turkey enacted a law aiming to achieve net zero pollution by 2053.
As countries continue to take steps to reduce the impact that rising temperatures have on the environment and the economy, the future implications may also decrease.
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