Climate change financial impact could be twice that of previous estimates

Source: Middle East Insurance Review | Jun 2024

Climate change will reduce future global income by about 19% in the next 25 years with the poorest areas and those least responsible for heating the atmosphere taking the biggest monetary hit, according to a new study.

Conducted by researchers from Germany’s Potsdam Institute for Climate Impact Research and published in a recent issue of science journal Nature, the study said the financial impact of climate change by 2100 would cost twice what previous studies estimated.

The analysis by the team shows that climate change will cause massive economic damages within the next 25 years in almost all countries around the world, also in highly developed ones such as Germany and the US, with a projected median income reduction of 11% each and France with 13%.

For the past dozen years, scientists and others have been focusing on extreme weather such as heat waves, floods, droughts, storms as the having the biggest climate impact. But when it comes to financial impact, the researchers found that overall impacts are still mainly driven by average warming and overall temperature increases. It harms crops and hinders labour production. M

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