A pioneering study led by Paul Waidelich at ETH Zurich, published in the journal Nature Climate Change, has revealed the additional impacts of climate change on global economies beyond just annual temperature changes. Using projections from 33 global climate models, the study quantified the effects of variability and extremes in rainfall and temperature on gross domestic product (GDP) around the world. The findings showed that a global GDP loss of up to 10 percent could occur if the planet warms by +3ºC, with the costs of climate change heightened by taking into account variability and extremes.
One key takeaway from the study is the importance of stringent climate action to mitigate future economic losses. Limiting global warming to 1.5ºC instead of 3ºC could reduce global losses from climate change by two thirds, highlighting the substantial cost of inaction. ETH Zurich professor Sonia Seneviratne emphasized that the global economy will also suffer from the impacts of climate change if rapid decarbonization is not pursued. The study underscores the economic benefits of reducing greenhouse gas emissions and transitioning to a more sustainable energy system.
Global warming of 3ºC is projected to increase the risk of extreme rainfall worldwide, leading to a reduction in global GDP by an average of 0.2 percent, equivalent to US$ 200 billion. The study suggests that extreme heatwaves are the most impactful extreme events, accounting for nearly half of the global economic damage at 3ºC of global warming. While warmer temperatures may benefit colder countries like Canada, they also bring more severe heatwaves that can harm the economy, as observed in recent years.
Despite the insights gained from the study, uncertainties remain in projecting the impacts of climate variability and extremes. The research team acknowledges that socio-economic factors, such as the duration of impacts and society’s ability to adapt, contribute to uncertainties in estimating the costs of climate change. In addition, a better understanding of how rainfall patterns and climate extremes will evolve is needed. The authors point out that the total cost of climate change is likely significantly higher when considering non-economic impacts such as droughts, sea-level rise, and climate tipping points.
In conclusion, the study highlights the urgent need for climate action to mitigate the economic impacts of climate change. By factoring in the additional costs of variability and extremes in rainfall and temperature, the study emphasizes the importance of limiting global warming to reduce global losses significantly. The findings underscore the economic risks associated with inaction and emphasize the potential benefits of decarbonization and transitioning to a more sustainable energy system. Further research is needed to better understand the complex interactions between climate variability, extremes, and socio-economic factors in order to more accurately assess the total cost of climate change.
