Study: Climate Change Could Shrink Global Economy 23 Percent

The economic damage could be especially severe for poor countries.

If left unchecked, climate change could worsen the gap between rich and poor countries, according to a new study—a finding that could add more urgency to international negotiations at the end of the year.

The study, published Wednesday in the journal Nature, found that above a median ideal temperature, a warming climate stunts economic growth.

Overall, unmitigated climate change could shrink the global economy by 23 percent by the end of the century, based on current growth in carbon-dioxide emissions.

“The benefits of reducing emissions are even larger than we thought,” said study co-author Marshall Burke, an assistant professor in Earth system science at Stanford University. “Whereas before, a lot of things had looked too cost-prohibitive, now we should be willing to incur even greater costs to avoid these kinds of impacts.”

The authors looked at World Bank data for 166 countries between 1960 and 2010, comparing it with climatological data, and found that there was an ideal temperature at which countries seemed to be best at economic production: 13 degrees Celsius, or roughly 55 degrees Fahrenheit.

For countries averaging below that temperature, like those in Scandinavia, a warmer year meant more production. Above the benchmark, however, each degree meant less economic production. That’s due to a variety of factors, including reduced agricultural output and health problems associated with warmer temperatures.

But even the most developed economies took a hit when temperatures rose. (Previous studies have shown that car production goes down at U.S. factories in the heat.) Studies have shown that climate change has implications for damaging infrastructure, increasing energy use, and even exacerbating conflict—all smaller impacts that Burke said were reflected in the larger macro-level study. Even though some economies are trending up despite rising temperatures, Burke said that the larger trend shows that there could be impacts felt down the road.

The study did not account for stronger hurricanes or sea-level rise, other potential impacts from climate change that could cause even more economic damage.

The researchers said that some countries whose average temperature is below the 13-degree benchmark—such as Russia, Canada, and parts of Europe—would actually see an economic boost. In the poorest 40 percent of countries, however, the economic hit could be as high as 75 percent by the end of the century.

The average global temperature was 13.9 degrees Celsius, or 57 degrees, in the 20th century, according to the National Oceanic and Atmospheric Administration. Last year, the hottest on record, saw the average temperature rise to 58.24 degrees and scientists are projecting that 2015 will top that.

The findings come just weeks before countries are set to meet at a United Nations conference in Paris to hash out a global climate-change agreement. Pete Ogden, a former White House climate-change staffer, said that the economic impacts should give more urgency to negotiators from all countries.

“This is another indication of the need for global action. This study suggests it’s not so simple as turning up the air-conditioning units; there are things that are more profound in every country in the world,” said Ogden, now a senior fellow with the Center for American Progress. “There’s broad recognition that the most vulnerable countries and the most vulnerable people will be put at risk, but this casts the net much wider.”