38 trillion dollars in damages each year-due to climate change

Climate change can be a natural process where temperature, rainfall, wind and other elements vary over decades or more. In millions of years, our world has been warmer and colder than it is now. But today we are experiencing unprecedented rapid warming from human activities, primarily due to burning fossil fuels that generate greenhouse gas emissions. Global average temperatures have risen by more than 1.1 degrees Celsius since 1850, exacerbating climate impacts, with 2023 being the hottest on record.

Even if CO2 emissions were to be drastically cut down starting today, the world economy is already committed to an income reduction of 19 % until 2050 due to climate change, a new study published in Nature finds. These damages are six times larger than the mitigation costs needed to limit global warming to two degrees. Based on empirical data from more than 1,600 regions worldwide over the past 40 years, scientists at the Potsdam Institute for Climate Impact Research (PIK) assessed future impacts of changing climatic conditions on economic growth and their persistence.

Strong income reductions are projected for the majority of regions, including North America and Europe, with South Asia and Africa being most strongly affected. These are caused by the impact of climate change on various aspects that are relevant for economic growth such as agricultural yields, labour productivity or infrastructure.