Economic costs of climate crisis 'six times greater than thought'

The economic damage wrought by climate change will be six times worse than previously thought, with global heating set to shrink wealth at a rate consistent with the level of financial losses of a permanent war, research has found.

- Oliver Milman

A 1C increase in global temperature leads to a 12% decline in world gross domestic product (GDP), the researchers found, a far higher estimate than that of previous analyses. The world has already warmed by more than 1C since pre-industrial times and many climate scientists predict a 3C rise by the end of this century due to the ongoing burning of fossil fuels, a scenario that the new working paper, yet to be peer-reviewed, states will come with an enormous economic cost.

A 3C temperature increase will cause "precipitous declines in output, capital and consumption that exceed 50% by 2100" the paper states. This economic loss is so severe that it is "comparable to the economic damage caused by fighting a war permanently," it adds.

"There will still be some economic growth happening but by the end of the century people may well be 50% poorer than they would have been if it wasn't for climate change," said Adrien Bilal, an economist at Harvard who wrote the paper with Diego Känzig, an economist at Northwestern University.