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Nearly a quarter of the global GDP per capita could be lost by 2100 compared to a "no further warming" baseline, if climate change continues to escalate unchecked, according to a study in PLOS Climate by Kamiar Mohaddes and Mehdi Raissi from the University of Cambridge climaTRACES Lab.

Abiding by the Paris Agreement goals may generate a 0.25% global benefit compared to a scenario in which temperatures keep rising according to historical trends.

Climate change has been broadly linked to decreased economic activity. However, due to the methodological differences involved in climate modeling, estimates of why and to what extent vary widely.

In this study, Mohaddes and Raissi investigated the impact of a continuous above-norm temperature increase from 2015–2100 on the annual GDP per capita losses of 174 countries. The researchers used future temperature projections from the International Panel on Climate Change, which consider the different pace at which temperatures increase, degrees of climate variability, and mitigation and adaptation efforts. They compared future projections against two baselines: (i) a scenario where temperature increases mimic the 1960–2014 trends, and (ii) a hypothetical scenario with "no further warming."

The researchers found that if temperatures increase persistently by 0.04° C per year with minimal mitigation or adaptation, global GDP per capita may drop by 10–11% by 2100. Natural climate variability elevates these losses to 12–14%. In the most extreme emissions scenario, the researchers project per capita income losses of 20–24% compared to a "no further warming" scenario. The researchers also observed variation among countries, noting that hotter and low-income countries might face economic losses 30–60% higher than the global average.

While adaptation protocol cannot completely override the effects of climate change, Mohaddes and Raissi do recognize its impact on reducing the impacts. Further, they found that abiding by the 2015 Paris Agreement goals (i.e., limiting the temperature increase to 0.01° C per year) generates a global income gain of about 0.25% compared to scenario (i). Future studies might direct country-specific strategies for adaptation and mitigation.

The authors add, "Go back less than a decade and most economists would argue that climate change was something that only hotter, southern countries needed to worry about. We have challenged this assumption: in a series of work we have shown that climate change reduces income in all countries, hot and cold, rich and poor alike, and will affect industries ranging from transport to manufacturing and retail, not only agriculture and other sectors commonly associated with nature."

They conclude, "No country is immune from the impact of climate change if greenhouse gas emissions are not curtailed… Urgent action is needed to address climate change and protect economies from further income losses."