Researchers at the University of Cambridge’s climaTRACES Lab found that global gross domestic product could shrink by up to 24% by 2100. This estimation is based on various projections for the amount of pollution that may be released into the atmosphere by that time. The study, published in PLOS Climate, was led by scholars Kamiar Mohaddes and Mehdi Raissi. It highlights the economic threat that climate change has on our communities.

What is causing GDP to shrink?

Persistent changes to a region’s weather patterns and landscape can have a permanent effect on a community. For example, rising global temperatures are leading to water shortages and droughts. This is expected to impact about half of the world’s food supply and decrease wealthy countries’ GDP by up to 8%. That number rises to 15% among the lowest-income nations.

Extreme weather events caused by planet-warming pollution can also create costly damage to homes, businesses, and municipalities. One study found that natural disasters accounted for about $140 billion in insured losses last year.

Mohaddes and Raissi analyzed 174 countries and estimated potential country-specific losses based on historical weather, adaptation, and mitigation patterns. In the U.S., they looked at productivity, employment, and output across 10 industries. They found that some sectors have adapted to rising temperatures while others are more “sensitive” to these changes.

Why is GDP loss important?

While people may find it difficult to understand the personal impacts of climate change, everyone feels economic hardship. This study underscores how our livelihoods are at stake if we do not mitigate the issue.

Economies experience massive losses annually, with one University of Delaware study finding that the global GDP lost $1.5 trillion in 2022.

“That is, the world is estimated to be $1.5 trillion poorer than it would have been without climate change,” the study said.

With financial disparity growing, low-income households stand to lose more to climate change than their wealthy counterparts. It’s important to do our part to curb our pollution in order to protect each other’s futures.

How this study helps promote mitigation

Researchers examined both worst- and best-case scenarios based on alterations to human behavior. This means there are pathways to reduce the impact of climate change on our lives and wallets.

If countries abide by the Paris Agreement, this can actually increase global income gain by 0.25%. This would require nations to limit the annual global temperature increase to 0.01 degrees Celsius. There is a lot of work for governments to do to fully comply with the treaty. Still, it is our best bet to curb the effects of climate change and save trillions of dollars.

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