Climate Change Threatens Global Economy with Massive GDP Losses

A new report reveals that climate change could slash the world’s gross domestic product (GDP) by 12% for every 1°C increase in global temperature. This study, conducted by the National Bureau of Economic Research (NBER), suggests that the economic damage caused by climate change is up to six times greater than previous estimates.

The report indicates that each 1°C rise in temperature is associated with a significant 12% reduction in global GDP. Furthermore, the “social cost of carbon” is estimated to be around $1,056 per metric ton of carbon dioxide emissions, a stark contrast to earlier estimates ranging from $51 to $190 per metric ton.

In 2023, global carbon emissions reached approximately 37.55 billion metric tons, according to Statista. With scientists predicting a 3°C temperature increase by the end of the century due to continuous fossil fuel burning, the NBER report warns of dramatic declines in economic output, capital, and consumption, potentially exceeding 50% by 2100.

Adrien Bilal, a Harvard economist and co-author of the paper, emphasized the gravity of the situation: “There will still be some economic growth happening, but by the end of the century, people may well be 50% poorer than they would’ve been if it wasn’t for climate change.”