Study: Climate Change Could Cost $38 Trillion by 2050

A new study from a German research group says climate change will reduce everyone's income by about 19 percent over the next 25 years.

That would be about $38 trillion per year. But the report warns it could get worse between 25 and 75 years from now if nothing is done soon.

The numbers come from a study published in April in the journal Nature.

FILE - People watch the sunset at a park on an unseasonably warm day, Feb. 25, 2024, in Kansas City, Mo. (AP Photo/Charlie Riedel, File)

Researchers from Germany's Potsdam Institute for Climate Research, a nonprofit group partly supported by Germany's government, wrote the report. They said, "Climate change will cause massive economic damages within the next 25 years in almost all countries around the world."

Study co-author Leonie Wenz said developed countries such as Germany, the United States and France would face smaller decreases. Wenz said the researchers projected that people living in those countries will see 11 to 13 percent less income.

The study writers said the greatest economic effect will be felt by people in the least-developed nations. They said countries that are "least responsible will suffer the most."

Max Kotz is the lead author. He said the researchers first estimated what the world's economic growth would be without climate change.

They then applied those values to the damage to economies if climate change continues at its current pace. Kotz noted that there will still be economic growth, but it will be 19 percent lower in most places once the damage of climate change is taken into account.

Kotz said most climate scientists have been looking at extreme weather events such as heat waves, floods, hurricanes and other large storms. However, he notes, "the overall impacts are still mainly driven by average warming, overall temperature increases."

The U.S. National Oceanic and Atmospheric Administration (NOAA) said the average world temperature last year was a record. The weather agency said that number was 1.35 degrees Celsius above the average during pre-industrial times, before modern technology.

In the U.S., the southeastern and southwestern states such as New Mexico and Arizona are estimated to suffer the largest economic effects. In Europe, Spain and Italy are likely to feel the effect more than countries like Denmark and Germany. Areas that are usually cold for most of the year – Canada, Russia, Norway, Finland, and Sweden – will have good results from warming.

Kotz notes that the world's poorest countries are also the least prepared to adapt to climate change. Those countries are least responsible for the change, but they will suffer 60 percent more income loss than wealthy nations.

"It underlies some of the injustice elements of climate," Kotz said.

The study looked at 1,600 areas around the world that are smaller than countries. Kotz and his group then examined a number of climate influences and considered how long economic shocks related to climate would last. Computer systems were used to estimate the effects on each person's income in the area.

Kotz's work proposes that economic changes over the next 25 years are likely to happen. He said cuts in greenhouse gases will only reduce the lost income by a small amount. But there are two different possibilities for 2050 and beyond.

If the world works to reduce warming to two degrees Celsius above pre-industrial times, the economic impact would be 20 percent of global income. But if climate changes substantially more, the effect could be a 60 percent loss of income.

Kotz said that means that people should not think the "doomsday" is already here and nothing can be done.

The new study predicted a larger decrease in the world's income than a similar study in 2015 suggested. The study said the world's economy would shrink by 23 percent by 2100.

Marshall Burke is a climate scientist at Stanford University who wrote the 2015 study. He said the new, German study "makes a lot of sense."

Burke was not part of the recent study. He warned that he is not completely sure about some of the methods, but he agrees with the idea. Burke added, "the big picture is basically right."

Frances Moore is an economist and teaches environmental studies at the University of California-Davis. Moore, who also was not part of the study, said climate damage adds up over time. That is why fighting climate change today, even at a high cost, will have good results later.

I'm Dan Friedell.

Dan Friedell adapted this story for Learning English based on a report by The Associated Press.

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Words in This Story

journal –n. a magazine that publishes research on a field of study

massive –adj. very large or heavy

income –n. money earned from work, business or investments

apply –v. to use under certain conditions

pace –n. speed or a rate

impact –n. a result

adapt –v. to change to meet new requirements or conditions

underlie –v. to form the basis of something

doomsday –n. the end of the world