A new study has revealed that the economic impact of climate change has been seriously underestimated — and the consequences could be far more severe than previously thought. Researchers warn that if global temperatures rise by 4°C, the average person could become 40% poorer.
The study conducted by Australian scientists and published in Environmental Research Letters found that even if the world successfully limits warming to 2°C, global per capita GDP could still drop by 16% — a drastic revision from earlier estimates of just 1.4%.
The research suggests that economic models used in climate policy have failed to fully reflect the damaging effects of climate change, especially extreme weather events like droughts, floods, and heat waves. These events harm local communities and disrupt global supply chains, leading to widespread economic consequences.
Even under optimistic scenarios where nations meet their climate targets, current projections estimate the Earth is still on course for a 2.1°C temperature rise — enough to trigger significant economic losses worldwide.
The study enhances one of the most widely used economic models—an integrated assessment model (IAM)—by adding climate-based forecasts to more accurately reflect how rising temperatures and cascading disruptions would impact global wealth.
As economic and climate risks grow more intertwined, the findings add urgency to the call for stronger climate action—not only to protect the environment but also to preserve global economic stability. Read More
News Credit: The Guardian
Picture Credit: Jessica Hromas/The Guardian