Global economy faces 40% decline from unchecked climate change
New research indicates that the impact of climate change on the global economy is significantly greater than previously thought. Recent analyses reveal that the climate crisis could reduce the global market by as much as 40 per cent.
The climate crisis and the economic crisis are interlinked. Climate change may have a far more substantial impact on the global economy than earlier predictions suggested. New studies, which consider the worldwide reach of extreme weather events, demonstrate that earlier forecasts were overly optimistic. Economic models often assumed that a country's economy is influenced solely by local weather conditions, overlooking the impact of events in other parts of the world.
The climate disaster will change the global market
When factoring in the global effects of extreme weather incidents, the predicted reduction in global GDP is much larger than assumed. If Earth's temperature rises by more than 3°C by the end of the century, economic damages could reach 40 per cent. Previously, researchers claimed that in the most pessimistic scenario, the decline in GDP by the century's end would be 11 per cent. The worsening economic conditions and advancing climate crisis will have a significant impact on people worldwide.
Climate change may disrupt production and supply chains, limiting the potential for mutual assistance between countries. International trade is crucial for global economic productivity, and our studies indicate that a globally warm year results in lower global growth.
Action is needed now
Reducing emissions involves short-term economic costs that must be weighed against the long-term benefits of preventing dangerous climate change. The optimal level of global warming, balancing these costs and benefits, is 1.7°C, which aligns with the most ambitious aim of the Paris Agreement.
Our research shows that earlier forecasts regarding the economic impact of warming were underestimated. Current emission levels pose a threat to our future and that of succeeding generations. Climate warming is a complex issue affecting all inhabitants of Earth, but to avoid the worst-case scenario, systemic changes and cooperation between economies are essential.
