Economic analysis of climate change

525: 1544: 1056: 1493:. Wealthy countries in colder regions had either felt little overall economic impact from climate change, or possibly benefited, whereas poor hotter countries very likely grew less than if global warming had not occurred. Part of this observation stems from the fact that greenhouse gas emissions come mainly from high-income countries, while low-income countries are affected by it negatively. So, high-income countries are producing significant amounts of emissions, but the impacts are unequally threatening low-income countries, who do not have access to the resources to recover from such impacts. This further deepens the inequalities within the poor and the rich, hindering sustainability efforts. Impacts of climate change could even push millions of people into poverty. 938: 1553: 832: 451:. According to the compensation principle, so long as those benefiting from a particular project compensate the losers, and there is still something left over, then the result is an unambiguous gain in welfare. If there are no mechanisms allowing compensation to be paid, then it is necessary to assign weights to particular individuals. One of the mechanisms for compensation is impossible for this problem: mitigation might benefit future generations at the expense of current generations, but there is no way that future generations can compensate current generations for the costs of mitigation. On the other hand, should future generations bear most of the costs of climate change, compensation to them would not be possible. 497:(CEA) is preferable to CBA when the benefits of impacts, adaptation and mitigation are difficult to estimate in monetary terms. A CEA can be used to compare different policy options for achieving a well-defined goal. This goal (i.e. the benefit) is usually expressed as the amount of GHG emissions reduction in the analysis of mitigation measures. For adaptation measures, there is no single common goal or metric for the economic benefits. Adaptation involves responding to different types of risks in different sectors and local contexts. For example, the goal might be the reduction of land area in hectares at risk to sea level rise. 1436:

such as a plan, policy or strategy. For many developing countries, the implementation of certain actions specified in the plans is conditional on receiving international support. in these countries, a majority (85%) of finance needs are expected to be met from international public climate finance, i.e. funding from developed to developing countries. There is less data available for adaptation costs and adaptation finance needs in high income countries. Data show that per capita needs tend to increase with income level, but these countries can also afford to invest more domestically.

254: 464: 821: 980: 1466:. To calculate the social welfare function requires an aggregation of the impacts of climate change policies and climate change itself across all affected individuals. This calculation involves a number of complexities and controversial equity issues. For example, the monetization of certain impacts on human health. There is also controversy over the issue of benefits affecting one individual offsetting negative impacts on another. These issues to do with equity and aggregation cannot be fully resolved by economics. 33: 1148: 1021: 725:. Considerations in a risk-based approach might include, for example, the potential for low-probability, worst-case climate change impacts. One of the responses to the uncertainties of global warming is to adopt a strategy of sequential decision making. Sequential decision making refers to the process in which the decision maker makes consecutive observations of the process before making a final decision. This strategy recognizes that decisions on global warming need to be made with incomplete 6466:: The global benefits of pathways limiting warming to 2°C (>67%) outweigh global mitigation costs over the 21st century, if aggregated economic impacts of climate change are at the moderate to high end of the assessed range, and a weight consistent with economic theory is given to economic impacts over the long term. This holds true even without accounting for benefits in other sustainable development dimensions or nonmarket damages from climate change (medium confidence). 384:

droughts and windstorms. They show that for example, hot years are linked to lower income growth in poor countries, and low rainfall is linked to reduced incomes in Africa. Other econometric studies show that there are negative impacts of hotter temperatures on agricultural output, and on labour productivity in factories, call centres and in outdoor industries such as mining and forestry. The analyses are used to estimate the costs of climate change in the future.

360:(IAMs) are also used make aggregate estimates of the costs of climate change. These (cost-benefit) models balance the economic implications of mitigation and climate damages to identify the pathway of emissions reductions that will maximize total economic welfare. In other words, the trade-offs between climate change impacts, adaptation, and mitigation are made explicit. The costs of each policy and the outcomes modelled are converted into monetary estimates. 9524: 10686: 9512: 126:. Mitigation costs will vary according to how and when emissions are cut. Early, well-planned action will minimize the costs. Globally, the benefits of keeping warming under 2 °C exceed the costs. Cost estimates for mitigation for specific regions depend on the quantity of emissions allowed for that region in future, as well as the timing of interventions. Economists estimate the cost of climate change mitigation at between 1% and 2% of 1425:

benefits. For example, it is estimated that every US$ 1 billion invested in adaptation against coastal flooding leads to a US$ 14 billion reduction in economic damages. Investing in more resilient infrastructure in developing countries would provide an average of $ 4 in benefit for each $ 1 invested. In other words, a small percentage increase in investment costs can mitigate the potentially very large disruption to infrastructure costs.

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across regions, especially in those that are relatively carbon intensive at present. Pathways with uniform carbon values show higher mitigation costs in more carbon-intensive regions, in fossil-fuels exporting regions and in poorer regions. Aggregate quantifications expressed in GDP or monetary terms undervalue the economic effects on households in poorer countries. The actual effects on welfare and well-being are comparatively larger.

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adaptation, annual global GDP might be reduced by 10–23% by 2100 because of climate change. The same assessment finds smaller GDP changes with reductions of 1–8%, assuming assuming low warming, more adaptation, and using different models. These global economic cost estimates do not take into account impacts on social well-being or welfare or distributional effects. Nor do they fully consider climate change adaptation responses.

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damage functions have been developed for sea level rise, agricultural productivity, or heat effects on labour productivity. In a CBA framework, damages are monetized to facilitate comparison with the benefits of proposed actions or policies. Sensitivity analysis is conducted to assess the robustness of the results to changes in assumptions and parameters, including those of the damage function.

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overall adaptation plans for the country, city, or region. It also depends on the assessment methods used. A 2023 study analysed country-level information submitted to the UNFCCC in National Adaptation Plans and Nationally Determined Contributions (85 countries). It estimated global adaptation needs of developing countries annual average to be US$ 387 billion, for the period up to 2030.

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problem of aggregated analyses is that they often reduce different types of impacts into a small number of indicators. It can be argued that some impacts are not well-suited to this, e.g., the monetization of mortality and loss of species diversity. On the other hand, where there are monetary costs of avoiding impacts, it may not be possible to avoid monetary valuation of those impacts.

1181:; a cost that is directly passed on to the consumer and affects the affordability of food. Some farms do not sell their produce but instead feed a family or community; without that food, people will not have enough to eat. This results in decreased production, increased food prices, and potential starvation in parts of the world. The agriculture industry in 781:, originally applied in the areas of finance and investment. It has also been applied to the analysis of climate change. The idea is that a reasonable response to uncertainty is to invest in a wide portfolio of options. More specifically, the aim is to minimise the variance and co-variance of the performance of investments in the portfolio. In the case of 275:(IPCC) has relied on process-based integrated assessment models to quantify mitigation scenarios. They have been used to explore different pathways for staying within climate policy targets such as the 1.5 °C target agreed upon in the Paris Agreement. Moreover, these models have underpinned research including energy policy assessment and simulate the 407:(CBA) has been applied to the problem of climate change. In a CBA framework, the negative and positive impacts associated with a given action are converted into monetary estimates. This is also referred to as a monetized cost–benefit framework. Various types of model can provide information for CBA, including energy-economy-environment models ( 1474:

weighting, the result is that there is a much weaker argument in favour of mitigation action in rich countries. Valuing climate change impacts in poorer countries less than domestic climate change impacts (both in terms of policy and the impacts of climate change) would be consistent with observed spending in rich countries on foreign aid

1122:, which is projected to account for 60% of this loss. The construction sector is also projected to be severely impacted and accounts for 19% of projected losses. Other sectors that are most at risk are environmental goods and services, refuse collection, emergency, repair work, transport, tourism, sports and some forms of industrial work. 1455:

good must pay for it. Some people will benefit more from the public good than others, thus creating inequalities in the absence of benefit taxes. A difficulty with public goods is determining who exactly benefits from the public good, although some estimates of the distribution of the costs and benefits of global warming have been made –

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sensitivity of future investments, estimating the risk from climate change and estimating the additional investment needed to increase resilience. More detailed studies undertake investment and financial flow analysis at a sectoral level to provide detailed costing of the additional marginal costs needed for building resilience.

959:. The science of tipping points is complex and there is great uncertainty as to how they might unfold. Economic analyses often exclude the potential effect of tipping points. A 2018 study noted that the global economic impact is underestimated by a factor of two to eight, when tipping points are excluded from consideration. 2473: 871:

individual extreme heat events and rainfall events. Using all available data on attributable changes, one study estimated the global losses to average US$ 143 billion per year between 2000 and 2019. This includes a statistical loss of life value of 90 billion and economic damages of 53 billion per year.

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The emissions of the richest 1% of the global population account for more than twice the combined share of the poorest 50%. Compliance with the 1.5 °C goal of the Paris Agreement would require the richest 1% to reduce their current emissions by at least a factor of 30, while per-person emissions

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A third approach looks at the problem from the perspective of who has contributed most to the problem. Because the industrialized countries have contributed more than two-thirds of the stock of human-induced GHGs in the atmosphere, this approach suggests that they should bear the largest share of the

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Adaptation costs are the costs of planning, preparing for, facilitating and implementing adaptation. Adaptation benefits can be estimated in terms of reduced damages from the effects of climate change. In economic terms, the cost to benefit ratio of adaptation shows that each dollar can deliver large

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published a report titled: "Working on a warmer planet: The impact of heat stress on labour productivity and decent work", in which it claims that even if the rise in temperature will be limited to 1.5 degree, by the year 2030, Climate Change will cause losses in productivity reaching 2.2% of all the

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On the other hand, a view may be taken that points to the benefits of improved information over time. This may suggest an approach where near-term emissions abatement is more modest. Another way of viewing the problem is to look at the potential irreversibility of future climate change impacts (e.g.,

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may be unsuitable for analysing climate change mitigation as a whole. But it is still useful for analysing the difference between a 1.5 °C target and 2 °C. One way of estimating the cost of reducing emissions is by considering the likely costs of potential technological and output changes.

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Globally, limiting warming to 2 °C may result in higher economic benefits than economic costs. The economic repercussions of mitigation vary widely across regions and households, depending on policy design and level of international cooperation. Delayed global cooperation increases policy costs

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There are a number of benefits of using aggregated assessments to measure economic impacts of climate change. They allow impacts to be directly compared between different regions and times. Impacts can be compared with other environmental problems and also with the costs of avoiding those impacts. A

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It has been estimated that 3.5 million people die prematurely each year from air pollution from fossil fuels. The health benefits of meeting climate goals substantially outweigh the costs of action. The health benefits of phasing out fossil fuels measured in money (estimated by economists using

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Investment and financial flow (I&FF) studies typically consider how much it might cost to increase the resilience of future investments or financial flows. They also investigate the potential sources of investment funds and the types of financing entities or actors. Aggregated studies assess the

1511:, this reduces the effectiveness of pooling. However, there is reason to believe that different regions will be affected differently by climate change. This suggests that pooling might be effective. Since developing countries appear to be potentially most at risk from the effects of climate change, 921:

The total economic impacts from climate change increase for higher temperature changes. For instance, total damages are estimated to be 90% less if global warming is limited to 1.5 °C compared to 3.66 °C, a warming level chosen to represent no mitigation. In an Oxford Economics study high

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Global estimates are often based on an aggregation of independent sector and/or regional studies and results, with complex interactions modelled. For example, there is uncertainty in how physical and natural systems may respond to climate change. Potential socioeconomic changes, including how human

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The economic impacts of climate change also include any mitigation (for example, limiting the global average temperature below 2 °C) or adaption (for example, building flood defences) employed by nations or groups of nations, which might infer economic consequences. They also take into account

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These damages are compared to a baseline of no climate change and are then applied against overall expected global growth in gross domestic product, said study lead author Max Kotz, a climate scientist. So while it's 19% globally less than it could have been with no climate change, in most places,

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emissions. On the other hand, economic growth may drive technological change and increase energy efficiency. Economic growth may be associated with specialization in certain economic sectors. If specialization is in energy-intensive sectors, then there will be a strong link between economic growth

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basis, which has traditionally been used in welfare economics, an argument can be made for richer countries taking on most of the burdens of mitigation. However, another result is possible with a different modeling of impacts. If an approach is taken where the interests of poorer people have lower

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Both the cost estimates and needs estimates have high uncertainty. Adaptation costs are usually derived from economic modelling analysis (global or sectoral models). Adaptation needs are based on programme and project-level costing. These programmes depend on the high level adaptation instrument –

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Further, the role of climate change in undernutrition and micronutrient deficiencies can be calculated as the loss of "years of full health".One estimate presented in 2016 suggests that under the scenario of strong warming and low adaptation due to high global conflict and rivalry, such losses may

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A warming planet also threatens to put more homes into disrepair or wipe them out from the existing housing stock altogether, exacerbating our housing shortage. For example, if a fire or natural disaster doesn't completely destroy a unit, the owner has to decide whether to then repair or demolish

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One approach considers the problem from the perspective of who benefits most from the public good. This approach is sensitive to the fact that different preferences exist between different income classes. The public good is viewed in a similar way as a private good, where those who use the public

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A 2023 study found the overall adaptation costs for all developing countries to be around US$ 215 billion per year for the period up to 2030. The highest adaptation expenses are for river flood protection, infrastructure and coastal protection. They also found that in most cases, adaptation costs

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The economic impact of changes in annual mean temperature is estimated to be lower at higher latitudes despite higher temperature changes due to lower estimated economic vulnerability to temperature changes. Reduced daily temperature variability at high latitudes shows positive estimated economic

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Global aggregate costs (also known as global damages or losses) sum up the predicted impacts of climate change across all market sectors (e.g. including costs to agriculture, energy services and tourism) and can also include non-market impacts (e.g. on ecosystems and human health) for which it is

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in order to take into account uncertainty in climate impacts, GHG emission trends etc. The options should ideally be diversified to be effective in different scenarios: i.e. some options suited for a no/low climate change scenario, with other options being suited for scenarios with severe climate

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Global Warming of 1.5 °C. An IPCC Special Report on the impacts of global warming of 1.5 °C above pre-industrial levels and related global greenhouse gas emission pathways, in the context of strengthening the global response to the threat of climate change, sustainable development, and

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Rogelj, J. Popp, A. Calvin, K.V. Luderer, G. Emmerling, J. Gernaat, D. Fujimori, S. Strefler, J. Hasegawa, T. Marangoni, G. Krey, V. Kriegler, E. Riahi, K. van Vuuren, D.P. Doelman, J. Drouet, L. Edmonds, J. Fricko, O. Harmsen, M. Havlik, P. Humpenöder, F. Stehfest, E. Tavoni, M. (5 March 2018).

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Several factors affect mitigation cost estimates. One is the baseline. This is a reference scenario that the alternative mitigation scenario is compared with. Others are the way costs are modelled, and assumptions about future government policy. Cost estimates for mitigation for specific regions

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are similar to some of the worst country-level losses during historical economic recessions. Economic losses are risks to living standards, which are more likely to be severe in developing countries. Climate change can push more people into extreme poverty or keep people poor, especially through

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CBA has several strengths: it offers an internally consistent and global comprehensive analysis of impacts. Furthermore, sensitivity analysis allows critical assumptions in CBA analysis to be changed. This can identify areas where the value of information is highest and where additional research

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are used giving weather variation over time and spatial areas, eg. ground station observations or (interpolated) gridded data. These are typically aggregated for economic analysis eg. to investigate effects on national economies. These studies examine temperature and rainfall, and events such as

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CEA involves the costing of each option, and providing a cost per unit of effectiveness. For example, cost per tonne of GHG reduced ($ /tCO2). This allows the ranking of policy options. This ranking can help decision-maker to understand which are the most cost-effective options, i.e. those that

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Damage functions play an important role in estimating the costs associated with potential damages caused by climate-related hazards. They quantify the relationship between the intensity of the hazard, other factors such as the vulnerability of the system, and the resulting damages. For example,

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It is difficult to estimate both the costs of adaptation and the adaptation finance needs. The costs of adaptation varies with the objective and the level of adaptation required and what is acceptable as residual, i.e. 'unmanaged' risk. Similarly, adaptation finance needs vary depending on the

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become more common and more intense, floods and droughts can destroy crops and eliminate food supply, while disrupting agricultural activities and rendering workers jobless. With more costs to the farmer, some will no longer find it financially feasible to farm: i.e. some farmers may choose to

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On the second point, it has been suggested that insurance could be bought against climate change risks. Policymakers and investors are beginning to recognize the implications of climate change for the financial sector, from both physical risks (damage to property, infrastructure, and land) and

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Scenarios are neither "predictions" nor "forecasts" but are stories of possible futures that provide alternate outcomes relevant to a decision-maker or other user. These alternatives usually also include a "baseline" or reference scenario for comparison. "Business-as-usual" scenarios have been

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The models incorporate aspects of the natural, social, and economic sciences in a highly aggregated way. Compared to other climate-economy models (including process-based IAMs), they do not have the structural detail necessary to model interactions with energy systems, land-use etc. and their

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Estimates are found to increase non-linearly with global average temperature change. Global temperature change projection ranges (corresponding to each cost estimate) are based on IPCC assessment on the physical science in the same report. It finds that with high warming (~4 °C) and low

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quantifies how climate change is altering the probability and magnitude of extreme events. On a case-by-case basis, it is feasible to estimate how the magnitude and/or probability of the extreme event has shifted due to climate change. These attributable changes have been identified for many

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Global economic losses due to extreme weather, climate and water events are increasing. Costs have increased sevenfold from the 1970s to the 2010s. Direct losses from disasters have averaged above US$ 330 billion annually between 2015 and 2021. Climate change has contributed to the increased

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of climate change impacts. "Disaggregated" refers to the choice to assess impacts in a variety of indicators or units, e.g., changes in agricultural yields and loss of biodiversity. By contrast, monetized CBA converts all impacts into a common unit (money), which is used to assess changes in

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A more recent modelling approach uses empirical, statistical methods to investigate how the economy is affected by weather variation. This approach can causatively identify effects of temperature, rainfall and other climate variables on agriculture, energy demand, industry and other economic

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that have been studied, aggregate costs of heat stress (through loss of work time) have been estimated, as have the costs of malnutrition. However, it is usual for studies to aggregate the number of 'years of life lost' adjusted for years living with disability to measure effects on health.

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One 2020 study estimated economic losses due to climate change could be between 127 and 616 trillion dollars extra until 2100 with current commitments, compared to 1.5 °C or well below 2 °C compatible action. Failure to implement current commitments raises economic losses to

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Disease, rising seas, reduced crop yields, and other harms driven by climate change will likely have a major deleterious impact on the economy by 2050 unless the world sharply reduces greenhouse gas emissions in the near term, according to a number of studies, including a study by the

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costs. This stock of emissions has been described as an "environmental debt". In terms of efficiency, this view is not supported. This is because efficiency requires incentives to be forward-looking, and not retrospective. The question of historical responsibility is a matter of

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CGE models are useful whenever we wish to estimate the effect of changes in one part of the economy upon the rest. They have been used widely to analyse trade policy. More recently, CGE has been a popular way to estimate the economic effects of measures to reduce greenhouse gas

849:) by 2050, and increase a lot further under high emissions. In comparison, limiting global warming to 2 °C would by 2050 cost about $ 6 trillion per year, or far less than the anticipated annual damages, emphasizing the economic benefits of proactive climate mitigation. 508:

method. Many of these methods work well when different stakeholders work together on a problem to understand and manage risks. For example, by discussing how well certain options might work in the real world. Or by helping in measuring the costs and benefits as part of a CEA.

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and emissions growth. If specialization is in less energy-intensive sectors, e.g. the services sector, then there might be a weak link between economic growth and emissions growth. In general, there is some degree of flexibility between economic growth and emissions growth.

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factors have contributed to the observed trend of global disaster losses, such as population growth and increased wealth. This shows that increased exposure is the most important driver of losses. However, part of these are also due to human-induced climate change.

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emissions (size of pie charts) differ substantially among high-emitting regions, the pattern of higher income classes emitting more than lower income classes is consistent across regions. The world's top 1% of emitters emit over 1000 times more than the bottom

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from 2006 for the British Government predicted that world GDP would be reduced by several percent due to climate related costs. However, their calculations may omit ecological effects that are difficult to quantify economically (such as human deaths or

68:(IAMs) are useful. Those models link main features of society and economy with the biosphere and atmosphere into one modelling framework. The total economic impacts from climate change are difficult to estimate. In general, they increase the more the 1196:

Notably, one estimate suggests that a warming of 3 °C (5.4 °F) relative to late 20th century (i.e. closer to 4 °C (7.2 °F) when compared to preindustrial temperatures – a level associated with the SSP5-8.5 scenario) would cause

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In: Climate Change 2014: Mitigation of Climate Change. Contribution of Working Group III to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change . Cambridge University Press, Cambridge, United Kingdom and New York, NY,

1610:(IPCC). They find that some degrowth scenarios "minimize many key risks for feasibility and sustainability compared to technology-driven pathways" with a core problem of such being feasibility in the context of contemporary decision-making of 195:

and thus save lives. Direct global fossil fuel subsidies reached $ 319 billion in 2017, and $ 5.2 trillion when indirect costs such as air pollution are priced in. In other areas, the cost of climate change mitigation may divert

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emission scenario, a temperature rise of 2 degrees by the year 2050 would reduce global GDP by 2.5–7.5%. By the year 2100 in this case, the temperature would rise by 4 degrees, which could reduce the global GDP by 30% in the worst case.

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Clarke L., K. Jiang, K. Akimoto, M. Babiker, G. Blanford, K. Fisher-Vanden, J.-C. Hourcade, V. Krey, E. Kriegler, A. Löschel, D. McCollum, S. Paltsev, S. Rose, P.R. Shukla, M. Tavoni, B.C.C. van der Zwaan, and D.P. van Vuuren, 2014:

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transition risk due to changes in policy, technology, and consumer and market behavior. Financial institutions are becoming increasingly aware of the need to incorporate the economics of low carbon emissions into business models.

228:(statistical models) are used to integrate the broad impacts of climate change with other economic drivers, to quantify the economic costs and assess the value of climate-related policies, often for a specific sector or region. 789:

acts as insurance against the chance that unfavourable impacts occur. The performance of adaptation options could either be defined in economic terms, e.g. revenue, or as physical metrics, e.g. the quantity of water conserved.

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strategy concerned with reducing future climate impacts might favor stringent, near-term emissions reductions. As stated earlier, carbon dioxide accumulates in the atmosphere, and to stabilize the atmospheric concentration of

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Climate Change 2014: Impacts, Adaptation, and Vulnerability. Part A: Global and Sectoral Aspects. Contribution of Working Group II (WG2) to the Fifth Assessment Report (AR5) of the Intergovernmental Panel on Climate Change

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Countries with the lowest GDPs per capita (yellow) and the lowest cumulative emissions will often suffer the greatest declines in their income relative to a hypothetical future where the impacts of climate change were not

1236:, some heatwaves could become extreme enough to cause mass mortality in outdoor labourers, although they will remain relatively uncommon (up to around once per decade starting from 2l00 under the most extreme scenario). 844:

11-29%), relative to a counterfactual where no climate change occurs. The global economy and per capita income would still grow relative to present, but the global annual damages would reach about $ 38 trillion (in 2005

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No consensus exists on who should bear the burden of adaptation and mitigation costs. Several different arguments have been made over how to spread the costs and benefits of taxes or systems based on emissions trading.

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results in very moist air. There is a risk that agricultural labourers will be physically unable to work outdoors on hot summer days at the end of the century, particularly under the scenario of greatest emissions and

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are also difficult to estimate, depending on different factors. Across all developing countries, they have been estimated to be about USD 215 billion per year up to 2030, and are expected to be higher in the following

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Luderer, Gunnar; Leimbach, Marian; Bauer, Nico; Kriegler, Elmar; Baumstark, Lavinia; Bertram, Christoph; Giannousakis, Anastasis; Hilaire, Jerome; Klein, David (2015). "Description of the REMIND Model (Version 1.6)".

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is positive. The expected value is the mean of the distribution of expected outcomes. In other words, it is the average expected outcome for a particular decision. This criterion has been justified on the basis that:

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Risk management can be used to evaluate policy decisions based a range of criteria or viewpoints, and is not restricted to the results of particular type of analysis, e.g., monetized CBA. Another approach is that of

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Weather and Climate Extreme Events in a Changing Climate. In Climate Change 2021: The Physical Science Basis. Contribution of Working Group I to the Sixth Assessment Report of the Intergovernmental Panel on Climate

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Eriksen, Siri; Schipper, E. Lisa F.; Scoville-Simonds, Morgan; Vincent, Katharine; Adam, Hans Nicolai; Brooks, Nick; Harding, Brian; Khatri, Dil; Lenaerts, Lutgart; Liverman, Diana; Mills-Novoa, Megan (1 May 2021).

586:). Projections of future atmospheric concentrations based on emission pathways are also affected by scientific uncertainties, e.g., over how carbon sinks, such as forests, will be affected by future climate change. 2824:

Baumstark, Lavinia; Bauer, Nico; Benke, Falk; Bertram, Christoph; Bi, Stephen; Gong, Chen Chris; Dietrich, Jan Philipp; Dirnaichner, Alois; Giannousakis, Anastasis; Hilaire, Jérôme; Klein, David (28 October 2021).

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in 2021 the economies of wealthy countries like the US would likely shrink by approximately 7%, while some developing nations would be devastated, losing around 20% or in some cases 40% of their economic output.

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Another estimate says that financial flows for climate mitigation and adaptation are going to be over $ 800 billion per year. These financial requirements are predicted to exceed $ 4 trillion per year by 2030.

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particularly climate-sensitive sectors such as agriculture and fisheries. Climate change may also increase income inequality within countries as well as between them, particularly affecting low-income groups.

2921: 749:, emissions would need to be drastically reduced from their present level. Stringent near-term emissions reductions allow for greater future flexibility with regard to a low stabilization target, e.g., 450 605:

developed in which there are no additional policies beyond those currently in place, and socio-economic development is consistent with recent trends. This term is now used less frequently than in the past.

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Bouwer, Laurens M. (2019), Mechler, Reinhard; Bouwer, Laurens M.; Schinko, Thomas; Surminski, Swenja (eds.), "Observed and Projected Impacts from Extreme Weather Events: Implications for Loss and Damage",

1962: 3543:"Reflections on Climate Change, Economic Development, and Global Equity : Presented at the 2007 Leontief Prize Ceremony Tufts University Global Development and Environment Institute October 17, 2007" 998:

impact, with opposite effects at lower latitudes and Europe. Economic effects due to changes in total annual precipitation show regional patterns generally opposite to changes in the number of wet days.

2663:"The MESSAGE Integrated Assessment Model and the ix modeling platform (ixmp): An open framework for integrated and cross-cutting analysis of energy, climate, the environment, and sustainable development" 988:

Other studies investigate economic losses by GDP change per country or by per country per capita. Findings show large differences among countries and within countries. The estimated GDP changes in some

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Seneviratne, S.I., X. Zhang, M. Adnan, W. Badi, C. Dereczynski, A. Di Luca, S. Ghosh, I. Iskandar, J. Kossin, S. Lewis, F. Otto, I. Pinto, M. Satoh, S.M. Vicente-Serrano, M. Wehner, and B. Zhou, 2021:

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Mitigation costs will vary according to how and when emissions are cut. Early, well-planned action will minimize the costs. Globally, the benefits of keeping warming under 2 °C exceed the costs.

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perspective, values outside of "likely" ranges are relevant, because, though these values are less probable, they could be associated with more severe climate impacts (the statistical definition of

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Wei, Yi-Ming; Han, Rong; Wang, Ce; Yu, Biying; Liang, Qiao-Mei; Yuan, Xiao-Chen; Chang, Junjie; Zhao, Qingyu; Liao, Hua; Tang, Baojun; Yan, Jinyue; Cheng, Lijing; Yang, Zili; et al. (2020).

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The projected temperature in climate change scenarios is subject to scientific uncertainty (e.g., the relationship between concentrations of GHGs and global mean temperature, which is called the

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will be reduced by $ 23 trillion annually, unless greenhouse gas emissions are adequately mitigated. As a consequence, according to the Swiss Re study, climate change will impact how the

7272: 415:(CGE) structural models investigate effects of policies (including climate policies) on economic growth, trade, employment, and public revenues. However, most CBA analyses are produced using 2045:

O'Neill, B., M. van Aalst, Z. Zaiton Ibrahim, L. Berrang Ford, S. Bhadwal, H. Buhaug, D. Diaz, K. Frieler, M. Garschagen, A. Magnan, G. Midgley, A. Mirzabaev, A. Thomas, and R.Warren, 2022:

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means that the benefits of a climate policy outweigh the costs of the policy. The standard rule used by public and private decision makers is that a risk will be acceptable if the expected

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Traditional insurance works by transferring risk to those better able or more willing to bear risk, and also by the pooling of risk. Since the risks of climate change are, to some extent,

3778: 6608:, a climate economist at Columbia University's business school who wasn't part of the research, said what he calls 'climateflation' is 'all too real and the numbers are rather striking.' 1352:

of different methods to assess the cost and amount of possible abatement over time. The marginal abatement costs of the various measures will differ by country, by sector, and over time.

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deliver high benefits for low costs. CEA can be used for minimising net costs for achieving pre-defined policy targets, such as meeting an emissions reduction target for a given sector.

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The Economics of Climate Change, the Second Report of the 2005-2006 session (HL 12-I and HL 12-II), produced by the UK Parliament House of Lords (HOL) Economics Affairs Select Committee

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Climate Change 1995: Economic and Social Dimensions of Climate Change. Contribution of Working Group III to the Second Assessment Report of the Intergovernmental Panel on Climate Change

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Climate Change 1995: Economic and Social Dimensions of Climate Change. Contribution of Working Group III to the Second Assessment Report of the Intergovernmental Panel on Climate Change

441:. The valuation of costs and benefits of climate change can be controversial because some climate change impacts are difficult to assign a value to, e.g., ecosystems and human health. 157:

estimating economic costs of facilitating and implementing climate change mitigation and adaptation strategies (varying with the objectives and the levels of action required); see also

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government report in November 2018 raised the possibility of US GDP going down 10% as a result of the warming climate, including huge shifts in geography, demographics and technology.

971:) or whose economic consequences will manifest slowly. Therefore, their calculations may be an underestimate. The study has received both criticism and support from other economists. 5425: 4699: 3269: 874:

Estimates of the economic impacts from climate change in future years are most often measured as percent global GDP change, relative to GDP without additional climate change. The

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Assessing the Benefits of Avoided Climate Change: Cost-Benefit Analysis and Beyond. Proceedings of Workshop on Assessing the Benefits of Avoided Climate Change, March 16–17, 2009

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societies might mitigate and adapt to climate change also need consideration. The uncertainty and complexities associated with climate change and have led analysts to develop "

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employs the majority of the population in most low-income countries and increased costs can result in worker layoffs or pay cuts. Other farmers will respond by raising their

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The amount by which greenhouse gas emissions are reduced is forecast to substantially affect the number of Winter Olympic Game venues that will have reliably cold conditions.

335:) models. A CGE model consists of equations describing model variables and a database (usually very detailed) consistent with these model equations. The equations tend to be 9248: 7446: 5490:

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Pearce, D. W.; et al., "6.1.2 The nature of damage assessment. In (book chapter) 6. The Social Costs of Climate Change: Greenhouse Damage and the Benefits of Control",

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Climate Change 2022: Impacts, Adaptation and Vulnerability. Contribution of Working Group II to the Sixth Assessment Report of the Intergovernmental Panel on Climate Change

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Climate Change 2001: Impacts, Adaptation and Vulnerability. Contribution of Working Group II to the Third Assessment Report of the Intergovernmental Panel on Climate Change

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Climate Change 2022: Impacts, Adaptation and Vulnerability. Contribution of Working Group II to the Sixth Assessment Report of the Intergovernmental Panel on Climate Change

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Climate Change 2022: Impacts, Adaptation and Vulnerability. Contribution of Working Group II to the Sixth Assessment Report of the Intergovernmental Panel on Climate Change

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Climate Change 2022: Impacts, Adaptation and Vulnerability. Contribution of Working Group II to the Sixth Assessment Report of the Intergovernmental Panel on Climate Change

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The distribution of warming impacts from emitters has been unequal, with high-income, high-emitting countries benefitting while harming low-income, low-emitting countries.

5313:"Climate Change Could Cut World Economy by $ 23 Trillion in 2050, Insurance Giant Warns: Poor Nations Would Be Particularly Hard Hit, But Few Would Escape, Swiss Re Said" 2070:

Luomi, Mari (2020). Global Climate Change Governance: The search for effectiveness and universality (Report). International Institute for Sustainable Development (IISD).

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Huppmann, Daniel; Gidden, Matthew; Fricko, Oliver; Kolp, Peter; Orthofer, Clara; Pimmer, Michael; Kushin, Nikolay; Vinca, Adriano; Mastrucci, Alessio (February 2019).

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UNEP (1 December 2020). "Figure ES.8. Per capita and absolute CO 2 consumption emissions by four global income groups for 2015. In (book chapter) Executive Summary".

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might have the highest payoffs. However, there are many uncertainties that affect cost–benefit analysis, for example, sector- and country-specific damage functions.

107:

is a long-term problem. Furthermore, there is still a lot of uncertainty about the exact impacts of climate change and the associated damages to be expected. Future

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Climate Change 2022: Mitigation of Climate Change. Contribution of Working Group III to the Sixth Assessment Report of the Intergovernmental Panel on Climate Change

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Two related ways of thinking about the problem of climate change decision-making in the presence of uncertainty are iterative risk management and sequential

6012: 5567: 4676: 2336:"The 2019 report of The Lancet Countdown on health and climate change: ensuring that the health of a child born today is not defined by a changing climate" 1582:

is one of the causes of increasing greenhouse gas emissions. As the economy expands, demand for energy and energy-intensive goods increases, pushing up CO

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An approach based on sequential decision making recognizes that, over time, decisions related to climate change can be revised in the light of improved

10882: 8696: 7277:"Methodological note: ... The analysis accounts for energy-related CO2, and not other greenhouse gases, nor those related to land use and agriculture." 6115:

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Studies in 2019 suggested that economic damages due to climate change have been underestimated, and may be severe, with the probability of disastrous

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One 2018 study found that potential global economic gains if countries implement mitigation strategies to comply with the 2 °C target set at the

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that some regions or sectors benefit from low levels of warming, for example through lower energy demand or agricultural advantages in some markets.

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