How much will climate inaction cost us?

On April 17 this year. The journal Nature has published the most extensive analysis to date of the bill we may pay for not taking action on climate mitigation and adaptation. Researchers estimate that the cost of the damage caused by climate change will exceed by as much as six times what the global economy would pay to counteract it. Climate passivity is very expensive. If action to reduce greenhouse gas emissions is not taken in a more dynamic and effective manner, by 2049. The effects of climate change will cause $38 billion worth of damage. annually.

This is an amount that significantly exceeds previous estimates by researchers. In addition, the global permanent average income loss will be 19 percent. In the U.S. and Europe it will be about 11 percent, while in Africa and South Asia it will be as high as 22 percent. If climate policy remains unchanged, by 2100 the global average income loss will be more than 60 percent. The hope is that if emissions fall to net zero by mid-century, reductions in national GDP will stabilize at about 20 percent.

Climate inaction counted with financial losses

Previous forecasts had assumed that most Northern Hemisphere economies would continue to grow, but this spring. A German team of researchers has indicated that countries such as Germany (-11 percent), France (-13 percent), the United States (-11 percent) and the United Kingdom (-7 percent) will lose some of their GDP by mid-century. However, countries in hot regions of the world, such as the United States, will suffer the most. Botswana (-25 percent), Mali (-25 percent), Iraq (-30 percent), Qatar (-31 percent), Pakistan (-26 percent) and Brazil (-21 percent). Let’s remember that from the time the modeling was conducted (January 2023) to the publication of the results (April 2024), the global geopolitical situation has become even more complicated, which does not help in implementing solutions for the climate.

Significantly, the projected global damages between the two most extreme emissions scenarios by 2049, as developed by the Intergovernmental Panel on Climate Change (IPCC), are statistically indistinguishable. Therefore, the climate damage that will occur before 2050 is the result of actions that the world has already committed through a combination of past emissions and a range of future emissions scenarios. We need to be aware that the world’s economies face income reductions over the next 26 years, regardless of future conservation and prevention measures. Today’s treatment may only be of a nature to reduce the enormous environmental damage, but it will not reduce it to zero.

They are mainly due to the change in global average temperature, but taking into account the other climate components raises the estimates by about 50 percent. Losses are projected for all regions except those at very high latitudes, where a reduction in temperature variability may be beneficial. The greatest damage occurs at low latitudes, in regions with lower historical emissions and contemporary incomes, highlighting the strong impact of environmental inequality on future generations.

What distinguishes the models of the Potsdam Institute for Climate Impact Research scientists?

While most previous analyses of climate costs have only considered damage from rising temperatures at the national level, the latest publication also considers rainfall and the effects of extreme weather, using 40 years of data from 1,600 regions. This is important because weather is a local phenomenon, not a nationwide one. Researchers are using the latest methods of climate econometrics, which provide evidence of the impact of numerous elements of the distribution of daily temperature and precipitation on subnational economic growth.

The selection of these variables is based on micro-level evidence on mechanisms related to the effects of average temperatures on labor and agricultural productivity, temperature variability on agricultural productivity and population health, and precipitation on agricultural productivity, labor performance and flood damage. By taking these additional climate variables into account at the sub-national level, the researchers were able to obtain much more comprehensive models. The fact that the effects last for months and years was also taken into account.

At the same time, the journal Nature Climate Change published an analysis by an international team of researchers that focuses only on the aspect of rising global temperatures. Researchers highlight the great difficulty in assessing the role of precipitation, temperature variability and extreme events in the GDP decline. According to their estimates, global GDP will be 3.2 percent. lower with a warming of +1.5 °C. Unfortunately, according to a report presented in Earth System Science Data last June, this scenario could be reached even in 2024.

Why are researchers pulling out money?

Reducing emissions is much cheaper than doing nothing and accepting the effects of climate change, is the main conclusion of recent studies. Estimating the macroeconomic damage caused by climate change is crucial for informing public opinion, but also for policy debates on adaptation, mitigation and climate justice. Adaptation must be justified, as it always involves costs, and must take into account the development of regions and cities. Regional cost estimates can shed more light on national incentive programs.

Researchers point out that climate models, even developed and advanced ones, underestimate future changes in temperatures and extreme precipitation. We know with a high degree of certainty that future changes in average temperature will be the most unprecedented in terms of historical fluctuations that the economy has become accustomed to and will therefore cause the most damage. Scientists have deep concerns about the effectiveness of adaptation and mitigation strategies in agriculture, industry, forestry, transportation and land use, sectors that need urgent solutions. The world is facing a huge and multifaceted challenge – the climate crisis – and mitigation is mandatory for economic and social reasons.

Dr.-Ing. Edyta Łaskawiec – water and wastewater technologist, scientist at the Zabrze Institute of Fuel and Energy Technology, science popularizer, author of an educational profile on Instagram platform: wastewater_based.doctor.