In a stark revelation just ahead of COP28, a report by the University of Delaware‘s Gerard J. Mangone Climate Change Science and Policy Hub exposes the tangible economic toll of climate change, with developing nations absorbing the majority of the blow. Published under the title “Loss and Damage Today: How Climate Change is impacting output and capital,” the report delves into the intricate web of global economic losses incurred due to climate change.
Globally, climate change has inflicted a population-weighted GDP loss of 6.3% in 2022. The unweighted percentage of global GDP lost is estimated at 1.8%, equivalent to approximately $1.5 trillion. This discrepancy underscores the disproportionate impact, concentrated in low-income countries and tropical regions, where populations are dense, and GDP is scarce.
The report singles out India, revealing an 8% GDP loss in 2022 compared to a hypothetical world without climate change. Over the same period, India has witnessed a cumulative decrease of 7.9% in capital wealth, primarily attributed to climate impacts on human-produced capital, such as infrastructure. The total economic loss over the 30 years since the Rio Convention is staggering, estimated at $3555 billion.
Dr. James Rising, the author of the study and Assistant Professor at the University of Delaware emphasises the urgent need for support to address the challenges faced by countries grappling with the economic fallout from climate change. He states, “The world is trillions of dollars poorer because of climate change, and most of that burden has fallen on poor countries. I hope that this information can clarify the challenges that many countries already face today and the support they urgently need to address them.”
The report also underscores the exacerbation of global inequalities, with high-income countries currently reaping net GDP gains, largely attributed to reduced winter chill. However, as the planet continues to warm, these benefits are expected to diminish, with the adverse effects of hotter summers offsetting the advantages of milder winters.
The analysis, drawing on 58 economic models and utilizing machine learning, offers a “best estimate” of the current GDP and capital wealth losses from climate change. It sheds light on the intricate dynamics between climate change, economic outcomes, and capital investments. Low and middle-income countries face substantial capital losses, amounting to $2.1 trillion, posing long-term challenges to their economic resilience and growth.
When GDP and capital losses are amalgamated, the analysis reveals that low and middle-income countries have suffered a staggering total loss of $21 trillion since the adoption of the Rio Convention in 1992. Notably, all UNFCCC party groupings, except for the EU, have experienced total losses, with the G-77 bearing the greatest losses at $29 trillion. The report acknowledges these estimates as conservative, as certain impact channels and non-market losses are excluded from the analysis. As the world convenes for COP28, the report serves as a stark reminder of the pressing need for global cooperation to address the economic fallout of climate change.
Globally, climate change has inflicted a population-weighted GDP loss of 6.3% in 2022. The unweighted percentage of global GDP lost is estimated at 1.8%, equivalent to approximately $1.5 trillion. This discrepancy underscores the disproportionate impact, concentrated in low-income countries and tropical regions, where populations are dense, and GDP is scarce.
The report singles out India, revealing an 8% GDP loss in 2022 compared to a hypothetical world without climate change. Over the same period, India has witnessed a cumulative decrease of 7.9% in capital wealth, primarily attributed to climate impacts on human-produced capital, such as infrastructure. The total economic loss over the 30 years since the Rio Convention is staggering, estimated at $3555 billion.
Dr. James Rising, the author of the study and Assistant Professor at the University of Delaware emphasises the urgent need for support to address the challenges faced by countries grappling with the economic fallout from climate change. He states, “The world is trillions of dollars poorer because of climate change, and most of that burden has fallen on poor countries. I hope that this information can clarify the challenges that many countries already face today and the support they urgently need to address them.”
The report also underscores the exacerbation of global inequalities, with high-income countries currently reaping net GDP gains, largely attributed to reduced winter chill. However, as the planet continues to warm, these benefits are expected to diminish, with the adverse effects of hotter summers offsetting the advantages of milder winters.
The analysis, drawing on 58 economic models and utilizing machine learning, offers a “best estimate” of the current GDP and capital wealth losses from climate change. It sheds light on the intricate dynamics between climate change, economic outcomes, and capital investments. Low and middle-income countries face substantial capital losses, amounting to $2.1 trillion, posing long-term challenges to their economic resilience and growth.
When GDP and capital losses are amalgamated, the analysis reveals that low and middle-income countries have suffered a staggering total loss of $21 trillion since the adoption of the Rio Convention in 1992. Notably, all UNFCCC party groupings, except for the EU, have experienced total losses, with the G-77 bearing the greatest losses at $29 trillion. The report acknowledges these estimates as conservative, as certain impact channels and non-market losses are excluded from the analysis. As the world convenes for COP28, the report serves as a stark reminder of the pressing need for global cooperation to address the economic fallout of climate change.
