How much will climate change cost?

Article by Isabel Key and Mina Frost.

Climate change is expensive. It is predicted to cost the US alone hundreds of billions of dollars each year [1]. This will also effect how much people earn, with the poor being hit harder than the rich [2]. But how much? What about global numbers?

To answer that, we use “GDP” as a comparison; GDP measures the value of all products and services produced in a region in a year. GDP is also often said to indicate development and well-being [7]. It is true that there is some correlation between GDP and human well-being, but there are too many exceptions to say one fully indicates the other [5, 6].

Let’s look at some global numbers and ask the question: how much cheaper is 1.5°C warming than 2.0°C warming?

In 2018, the global GDP was $80 trillion [4]. With warming of 2°C, it is likely that the GPD in 2100 will be $20 trillion lower (at 3% inflation) than it would be if warming was at 1.5°C then [3]. In today’s money, that would be $1.39 trillion. It will likely be substantially worse if warming is higher than 2°C [3].

What we want to say is simple, and economists agree: Slowing climate change now is probably cheaper than fixing the damages later [3]. No room for procrastination here.

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