A new report highlights alarming projections regarding the potential impact of climate change on global GDP.
According to a study from the Institute and Faculty of Actuaries (IFoA) and the University of Exeter, if current trends continue without significant policy changes, global GDP could face a staggering 50% loss between 2070 and 2090. This projection underscores the urgent need for political leaders to address the climate crisis effectively.
The IFoA report warns that unchecked climate change could lead to mass mortality, displacement, and severe economic contraction, with food system shocks and water insecurity already affecting populations globally.
The report criticizes existing economic models for significantly underestimating the risks associated with climate change. It argues that many assessments fail to account for interconnected risks, leading to a false sense of security among policymakers.
Previous studies have suggested that climate change could reduce global GDP by up to 2% by 2100 under certain scenarios. However, the IFoA’s findings indicate that these estimates overlook severe potential impacts, particularly in vulnerable regions like South Asia, which could see GDP losses of 10-18% due to climate events
The warnings from this reports align with other research indicating that the economic fallout from climate change could reach tens of trillions of dollars annually by the end of the century if significant warming occurs. For instance, a recent study suggested that each 1°C rise in temperature could correlate with a 12% decline in global GDP.
As climate-related disasters become more frequent and severe, the economic risks are expected to escalate, emphasizing the need for immediate action to mitigate these impacts.