4 degree Celsius rise in global temperatures may cut world GDP by 40 pc: Study

IANS April 1, 2025 151 views

A groundbreaking study from Australia's UNSW reveals climate change could slash global GDP by 40% if temperatures rise 4°C by 2100. Researchers found traditional economic models underestimated damages by ignoring worldwide supply chain disruptions. The findings strengthen the case for rapid decarbonisation to meet the Paris Agreement's 1.7°C target. Even nations expecting climate benefits, like Russia or Canada, face risks due to interconnected global trade dependencies.

"Supply chain disruptions mean no country is immune to climate damages" – Dr. Timothy Neal, UNSW
New Delhi, April 1: A team of Australian researchers on Tuesday said that 4-degree Celsius rise in global temperatures would cut world GDP by around 40 per cent by 2100 – a sharp increase from previous estimates of around 11 per cent.

Key Points

1

New study revises GDP loss estimates from 11% to 40% by 2100

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Highlights overlooked global supply chain vulnerabilities

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Supports Paris Agreement's 1.7°C warming limit

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Warns even colder nations face economic risks

New projections by the University of New South Wales (UNSW) Institute for Climate Risk and Response (ICRR) - published in the journal Environmental Research -- fixes an oversight in the current economic model underpinning global climate policy, toppling previous carbon benchmarks.

According to the analysis, the results support limiting global warming to 1.7-degree Celsius, which is in line with significantly faster decarbonisation goals like the Paris Agreement, and far lower than the 2.7-degree Celsius supported under previous models.

"Economists have traditionally looked at historical data comparing weather events to economic growth to cost climate damages," said lead researcher Dr Timothy Neal, a 'Scientia Senior Lecturer' in the School of Economics and also the ICRR.

What they fail to account for, he said, are interruptions to the global supply chains currently buffering economic shocks.

"In a hotter future, we can expect cascading supply chain disruptions triggered by extreme weather events worldwide," Dr Neal added.

He further stated that the economic case for stronger climate change actions is clear. "Because these damages haven't been taken into account, prior economic models have inadvertently concluded that even severe climate change wasn't a big problem for the economy - and it's had profound implications for climate policy," said the lead researcher.

The local-only damage models have been used in the economic forecasting that has shaped the major powers' climate policies and played a crucial role in international agreements.

The updated projection should underscore to all nations that they are vulnerable to climate change. "There's an assumption that some colder countries, like Russia or Canada, will benefit from climate change, but supply chain dependencies mean no country is immune," Dr Neal emphasised.

However, there's still work to be done as "his research doesn't account for climate adaptation, like human migration, which is politically and logistically complex and not yet fully modelled", said the study.

Reader Comments

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Sarah K.
These findings are terrifying but not surprising. We've been ignoring the warning signs for decades. Time for world leaders to take this seriously before it's too late! 🌍
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Miguel T.
Interesting how supply chain disruptions weren't properly accounted for before. Makes you wonder what other blind spots exist in climate modeling.
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Raj P.
While the study is important, I wish they'd included more about potential solutions. Just telling us how bad it will be isn't enough - we need actionable plans!
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Amira L.
The part about no country being immune really stood out to me. Climate change is truly a global problem that requires global cooperation. We're all in this together.
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David W.
I appreciate that the researchers acknowledge the limitations of not including climate adaptation in their model. Shows scientific integrity. But 40% GDP loss? Yikes.
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Jenny S.
This makes the Paris Agreement targets seem even more urgent. We need stronger policies yesterday! What will it take for governments to act with the necessary speed? 😟

We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.

Tags:
climate change global GDP economic impact UNSW study Paris Agreement supply chain Timothy Neal
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