Climate change to cost US $ 38tn by 2050: German study

Flood water caused by heavy rains in Dubai, April 17, 2024 (REUTERS PHOTO)

By Nuzla Rizkiya

A recent study by the Potsdam Institute for Climate Impact Research (PIK) has projected staggering global damages from climate change, estimated at US $ 38 trillion annually by 2050. 

Even with immediate and drastic CO2 emission cuts, the world economy is already on track for a 19 percent income reduction by 2050, according to the PIK scientists. 

South Asia and Africa are predicted to bear the brunt of these reductions, with agriculture, labour and infrastructure expected to suffer the most.

The impacts will be mainly fuelled by the rising temperatures, changes in rainfall and temperature variability, which would account for weather extremes such as storms or wildfires.

Moreover, the study revealed that tropical countries like Sri Lanka would suffer the most in terms of climate impact inequity.

“Further temperature increases (in these regions) will therefore be the most harmful,” the scientists predicted.
The study also predicts that the countries that are least responsible for climate change will suffer at least 40 percent greater income losses than higher-emission countries.

“They are the ones with the least resources to adapt to its impacts,” the researchers pointed out.
“These near-term damages are a result of our past emissions. We have to cut down our emissions drastically and immediately – if not, economic losses will become even bigger in the second half of the century, amounting to up to 60 percent on global average by 2100,” the lead scientist of the study, Leonie Wenz cautioned.

Furthermore, the cost borne by the global economy in damages significantly outweighs the mitigation costs required to achieve the Paris Climate Agreement. According to the research, the cost to limit global warming to two degrees will amount to a mere sixth of the cost of damages.

The study has been based on empirical data from more than 1,600 regions worldwide collected over the past 40 years. Researchers of the study have assessed the persistent climate impacts on the global economy over the past decades, in order to project detailed sub-national damages, with lesser uncertainties of long-term projections.