Study says, “Following Paris Agreement targets could boost global income by 0.25 per cent, highlighting economic benefits of limiting temperature rise”

A new study published in PLOS Climate warns that, if global temperatures continue to rise unchecked, up to 24 per cent of global GDP per capita could be lost by the end of the century. The research, conducted by Kamiar Mohaddes and Mehdi Raissi of the University of Cambridge’s climaTRACES Lab, highlights the severe economic consequences of persistent climate change.

Using temperature projections from the Intergovernmental Panel on Climate Change, the researchers modelled the impact of continuous above average warming from 2015 to 2100 on 174 countries, comparing scenarios against both historical trends and a hypothetical “no further warming” baseline. Under a moderate, persistent increase of 0.04°C per year with minimal mitigation, global GDP per capita may fall by 10-11 per cent, rising to 12-14 per cent when natural climate variability is factored in. In the most extreme emissions scenario, losses could reach 20-24 per cent, with hotter and low-income countries potentially facing income declines 30-60 per cent higher than the global average.

The study also emphasises the benefits of climate action. Adhering to the 2015 Paris Agreement goals, limiting temperature rise to 0.01°C per year, could deliver a modest 0.25 per cent global income gain compared to a “business-as-usual” scenario. While adaptation measures cannot fully offset the damage, the researchers note that urgent mitigation efforts are critical to safeguard economic growth across all sectors from transport and manufacturing to retail and agriculture.

The authors conclude that no nation is immune. “Climate change reduces income in all countries, hot and cold, rich and poor alike,” they write, underlining the need for immediate and coordinated global action to curb greenhouse gas emissions and protect economies from further losses.