Production and consumption declines could exceed 50% by 2100
Each degree Celsius increase in global average temperature could reduce global gross domestic product (GDP) by 12%, a rate much higher than previous estimates, warn Adrien Bilal and Diego Känzig, economists at Harvard and Northwestern University respectively, in a working paper published by the National Bureau of Economic Research (NBER).
So far, the Earth has warmed more than 1°C since pre-industrial times, and many climate scientists predict a rise of 3°C by the end of the century if the burning of fossil fuels continues over time. current pace. This scenario would result in steep declines in production, capital and consumption, which could exceed 50% by 2100. These economic losses would then be comparable to those caused by a permanent state of war, warns us this report not yet peer-reviewed.
No country, rich or poor, will escape the economic impact of global warming
Despite residual economic growth, people could find themselves at the end of the century with income 50% lower than it would have been without climate change. Adrien Bilal also noted that purchasing power would already be 37% higher without the effects of warming observed over the last fifty years. This loss of wealth would intensify if the climate crisis worsens, draining the economy in ways comparable to periods of war. The study’s authors assume that the economic impact of climate change would be surprisingly uniform across the world, although lower-income countries start from lower levels of wealth. This should incentivize rich countries, like the United States, to act to reduce emissions harmful to the planet in their own economic interest. Even with drastic emissions reductions, climate change will continue to take a heavy toll on the economy. Assuming that global warming is limited to a little more than 1.5°C by the end of the century, a global objective which now seems out of reach, GDP losses would remain around 15%.
This finding comes shortly after the publication of another research study, in April 2024, which predicted that average incomes would fall by almost a fifth over the next 26 years, compared to what they would have been without the climate crisis. . Rising temperatures, heavier precipitation, and more frequent and intense extreme weather could cause $38 trillion in destruction each year by mid-century. These studies clearly demonstrate that the cost of the energy transition and limiting the impacts of climate change, although not negligible, is much lower than the cost of climate change itself.
