Climate change causes 38 trillion euros in damage every year

Climate change causes 38 trillion euros in damage every year

The effects of climate change will lead to enormous costs worldwide, as a study by the Potsdam Institute for Climate Impact Research shows. Even with a drastic reduction in greenhouse gas emissions, the global economy will face a 19 percent loss of income by 2050. These losses are six times higher than the cost of limiting global warming to two degrees. South Asia, Africa, North America and Europe are particularly hard hit.

The consequences of climate change are drastic and affect agricultural yields, labor productivity and infrastructure. Based on data from more than 1,600 regions over the last 40 years, PIK scientists have calculated the future effects of changing climatic conditions on economic growth. Annual damage worldwide in 2050 is estimated at around 38 trillion euros, mainly from rising temperatures and changes in precipitation.

The study shows that it would cost the global economy significantly less to protect the climate than to ignore the negative effects of climate change. Empirical insights into weather extremes and changes were used to analyze impacts in different regions around the world. The impacts add up to 80 times the entire federal budget and are particularly noticeable in tropical countries that are already affected by higher temperatures.

The study also shows that countries with less responsibility for climate change are likely to suffer the largest income losses. These losses are higher than in higher-income and higher-emitting countries. It is becoming clear that the costs of climate change are already high and will continue to rise unless action is taken.