A new study reveals that climate change will reduce future global income by around 19% in the next 25 years, with the poorest areas and those least responsible for heat-trapping emissions facing the most monetary damage.
Global Income Damage
Scientists at the Potsdam Institute for Climate Impact Research (PIK) analyzed the prospective effects of changing climatic conditions on economic growth and their permanence using empirical data from more than 1,600 regions around the world over the last 40 years.
It looked at past economic impacts on average global domestic product per person and used computer models to forecast the future to arrive at their exact calculations.
Overall, global annual damages are estimated at $38 trillion, with a likely range of $19-$59 trillion by 2050.
These impacts are mostly caused by rising temperatures, but they also include changes in rainfall and temperature fluctuations. Other weather extremes, such as storms or wildfires, may cause them to rise much higher.
The majority of the regions, including North America and Europe, are expected to have significant income declines, with South Asia and Africa particularly worst hit.
"Our analysis shows that climate change will cause massive economic damages within the next 25 years in almost all countries around the world, also in highly-developed ones such as Germany, France and the United States," says PIK scientist Leonie Wenz who led the study.
According to the report, in the United States, the southeastern and southwestern states suffer more economic hardship than the northern states, with regions of Arizona and New Mexico suffering the most financially.
In Europe, southern regions, including parts of Spain and Italy, are struck more than Denmark or northern Germany.
Only Arctic adjacent areas-Canada, Russia, Norway, Finland, and Sweden-benefit.
It also means that countries that have traditionally produced lower greenhouse gas emissions per person and are least able to financially respond to hotter weather are suffering the most financial hardship.
The study projected that the world's poorest countries will lose 61% more GDP than the richest.
"They are also the ones with the least resources to adapt to its impacts. It is on us to decide: structural change towards a renewable energy system is needed for our security and will save us money," said Anders Levermann, Head of Research Department Complexity Science at the Potsdam Institute and co-author of the study.
Adaptation Strategy
The study determined that complying with the Paris Climate Agreement-an international accord among almost 200 nations to combat climate change-would cost the global economy $6 trillion by 2050, compared to the anticipated $38 trillion economic harm caused by climate change.
Researchers said adaptation may provide solutions to decrease these damages.
According to Eduardo Bastien, a researcher at the Scripps Institute of Oceanography at the University of California, San Diego, adaptation strategies, which are approaches aimed at limiting the negative effects of climate change rather than reducing it, could help save money over time.
Bastien provided an example of a utility firm in California that shut down the electricity grid to avert wildfires.
"When you turn off electrical grids, you're turning off industry and you're turning off a lot of households that use electricity for their well-being. It's very costly but very necessary," he added.
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