The impact of climate change on the global economy is becoming increasingly clear. A new study from the University of Cambridge has found that an unchecked rise in global temperatures could reduce the GDP of individual countries by more than 10% by 2100. However, adhering to the Paris Climate Agreement could limit this decline to just 1%. The study highlights the importance of addressing climate change not only from an ecological perspective but also from an economic one.
Scientists agree that the consequences of climate change will significantly alter living conditions on Earth in the coming decades. This includes record-breaking temperatures, heatwaves in previously moderate regions, and a surge in energy demand for climate and cooling systems. Climate change is also causing deforestation, extreme flooding, and rising sea levels. Predictions suggest that by the end of the century, temperatures in the Middle East will be so high that the entire region will be practically uninhabitable.
The economic impact of climate change has been a concern for some time, with previous studies suggesting that poorer countries in Africa, Asia, and South America would be the most affected. However, the University of Cambridge’s analysis shows that even northern industrialized countries like Germany will experience significant economic consequences. The researchers developed a new economic-mathematical model to calculate how the GDP of individual countries will be affected if temperatures deviate from the historical average. The model used temperature data from 174 countries between 1960 and 2014. The results show that even slight temperature deviations have negatively impacted the economy in some countries.
The study concludes that “persistent changes in climate have clear negative long-term effects on economic growth.” An unchecked rise in global temperatures could reduce per capita income by 7% by 2100. However, adhering to the Paris Climate Agreement could limit this decline to just 1%. While achieving the Paris Climate Agreement’s goals will require significant short-term costs, it is a necessary step to mitigate the long-term negative effects of climate change on the global economy.
