Climate Change Will Erase $38 Trillion Every Year by 2050
Photo by Anuwar Hazarika/NurPhoto/Shutterstock Climate Climate Impacts
The argument that it costs too much to fix climate change has never held water, but a study out Wednesday in Nature has thrown a new iceberg in its way. Researchers in Germany found that climate change will sap 19 percent of global income by 2050 compared to a world with no climate change, equivalent to $38 trillion every year — six times as much as the estimated cost to limit warming to 2 degrees Celsius.
“Our analysis shows that climate change will cause massive economic damages within the next 25 years in almost all countries around the world,” said Leonie Wenz, of the Potsdam Institute for Climate Impact Research, in a statement. The income loss, derived from 1,600 sub-national regions’ data over the previous 40 years, will come from a variety of factors — declining agricultural yields and labor productivity, damage to infrastructure, and more.
And as with all climate change impacts, the damage will not be evenly distributed. Incomes will be hit harder in tropical regions, where it is already warm — and where much of the developing world lies, responsible for far less of the problem than the U.S., Europe, and other rich nations. The poorest quarter of countries will see 61 percent more damage to their income than the richest quarter.
Credit: Maximilian Kotz
The worst part: that 19 percent reduction in income is coming no matter what happens to our emissions trajectory; it is already baked in, a result of the billions of tons of greenhouse gases already spewed into the sky over the preceding decades. But that doesn’t make the comparison to the cost of mitigation moot: without strong action to reduce emissions, 19 percent by 2050 will turn into a stunning 60 percent by 2100, as more than half of global income goes up in smoke.
This turns the argument that strong climate action would be too expensive into laughable pablum. And that argument is more or less Republican doctrine these days — various members of Congress have said the energy transition is already moving faster than “the economy can absorb,” that it’s too expensive to “pick winners and losers” and that the market should just sort it out, and so on. Lindsey Graham, supposedly a supporter of climate action, said a couple of years ago: “I don’t want to be lectured about what we need to do to destroy our economy in the name of climate change.”
Though the new study raises previous estimates and makes the tradeoff clear, the economic impacts at stake here are not new. The Stern Review, a massive U.K.-based report that found big chunks of global GDP were at risk, came out in 2006. Various insurance companies and major financial institutions have also been warning about the costs for a decade or more.
“It is on us to decide: structural change towards a renewable energy system is needed for our security and will save us money,” said Anders Levermann, a co-author of the new study also of the Potsdam Institute. “Staying on the path we are currently on will lead to catastrophic consequences.”