Global Warming Will Make The Average Person 40% Poorer, Study Warns

A new study by Australian scientists has revealed that the impact of global warming on wealth has been significantly underestimated. According to the research, if global temperatures rise by 4 degree Celsius, the average person's wealth could decrease by as much as 40%, which is almost four times higher than previous estimates. The study also forecasts a 16% reduction in global GDP per person if temperatures increase by just 2 degree Celsius, much higher than earlier predictions that suggested a 1.4% drop.

The analysis fixes an oversight in the current economic model underpinning global climate policy, toppling previous carbon benchmarks. The work is published in the journal Environmental Research Letters.

Even if countries meet both near-term and long-term climate targets, the study suggests that global temperatures will still rise by 2.1 degree Celsius. These alarming findings highlight the dire consequences of climate change on economic stability and the wealth of individuals across the globe.

Professor Andy Pitman, a climate scientist at UNSW and co-author of the research, told The Guardian: "It's in the extremes when the rubber hits the road. It isn't about average temperatures"

"Retooling economic models to account for extremes in your part of the world and its impact on supply chains feels like a very urgent thing to do so countries can fully cost their economic vulnerabilities to climate change and then do the obvious thing - cut emissions."

Some economists have argued global losses from global heating might be partially balanced by warming that could benefit some cold regions, such as Canada, Russia and northern Europe. But Neal said global heating would hit countries everywhere, because global economies are linked by trade.

Professor Frank Jotzo, a climate policy expert at Australian National University who was not involved in the research, said economic climate modelling using IAMs assumed that if climate change made an activity such as agriculture unviable in one part of the world, increased output would simply come from somewhere else. 

"The result is that the models say that climate change makes little difference to the future world economy, which is contrary to what physical impact science and a nuanced understanding of interdependencies in the economy would suggest."