Gaby
Previous economic models have consistently underestimated how much global warming will harm people’s livelihoods. That’s the claim of a team from the University of New South Wales led by Dr. Timothy Neal. According to their study, a 4 °C increase in Earth’s temperature could make the average person 40 percent poorer. The study also predicts global GDP per capita would shrink by 16 percent even if warming reaches only 2 °C above pre-industrial levels. In contrast, earlier forecasts suggested this reduction would be just 1.4 percent, as reported by The Guardian.
Dr. Neal explained that previous economic models assumed that even significant climate change would have a moderate impact on the global economy. These models typically considered only local weather changes, neglecting how extreme weather events like droughts or floods could disrupt global supply chains. “In a hotter future, we can expect cascading failures in supply chains caused by extreme weather events around the world,” he said.
Co-author Professor Andy Pitman emphasized the need to account for extreme situations in different parts of the world, “so that countries can fully assess their economic vulnerability to climate change and then do the obvious — reduce emissions.” Some economists believe that global losses from climate change could be partially offset by benefits to certain colder regions. However, Dr. Neal argues that global warming will hit all countries because the world’s economies are interconnected through trade.
Mark Lawrence, a professor at the University of Adelaide who studies climate risks, called the study’s results credible. “I believe the economic consequences of climate change could be even worse,” he added. The findings were published in the journal Environmental Research Letters.
