Potsdam Institute says economic damage from climate change will cost $38trn by 2050
Wed 17 April 2024
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A study by scientists at the Potsdam Institute for Climate Impact Research finds that damage to farming, infrastructure, economic productivity and health from climate change will cost an estimated $38 trillion per year by 2050. The researchers say that the level of investment in measures needed to limit warming to within two degrees Celsius is estimated to be around one-sixth of the projected costs of inaction.
The study finds that the economic impacts of climate change will not be evenly spread across the world with North America, Europe, South Asia and Africa being most adversely affected. It finds that almost all countries will suffer negative economic impacts from climate change, but those in high latitudes suffer the least.
The Potsdam researchers warn that if emissions continue at today's rate - and the average global temperature increase rises beyond four degrees Celsius - the estimated economic toll after 2050 amounts to a 60% income loss by 2100. Limiting the rise in temperatures to two degrees would contain those losses at an average of 20%.
The Potsdam Institute, which is backed by the German Government, says the study uses recent empirical findings from more than 1,600 regions worldwide over the past 40 years to project sub-national damages from temperature and precipitation, including daily variability and extremes.
The researchers say that as well as spending too little to curb climate-warming emissions, governments are also under-spending on measures to adapt to the impact of climate change.
The study stands out for the severity of its findings.
Potsdam climate data researcher Leonie Wenz, a co-author on the study, said. "It costs us much less to protect the climate than not to."
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