E-Paper
Climate change to cost world 25% of GDP per capita by 2100: Study
A study warns that unchecked climate change could lead to a global GDP loss of up to 24% by 2100, affecting all countries, rich and poor.
Nearly a quarter of the world’s per capita gross domestic product could vanish by the end of the century if climate change continues to escalate unchecked, according to a new study that challenges long-held assumptions about which countries face the greatest economic threat.
The research, published Wednesday in PLOS Climate by teams from the University of Cambridge’s climaTRACES Lab and the International Monetary Fund, suggests that adhering to Paris Agreement goals could generate a modest 0.25% global benefit compared to scenarios where temperatures continue rising at historical rates.
The study’s sobering projections come as past warming of 1.2°C has already inflicted an estimated 2% loss in global income—equivalent to $1.6 trillion—between 1960 and 2014. This aligns closely with separate research from the University of Delaware that pegged historical GDP losses from warming at 1.8%, or approximately $1.5 trillion.
Co-authors Mohaddes and Raissi analysed temperature impact projections for 174 countries between 2015 and 2100, using International Panel on Climate Change data that accounts for varying rates of temperature increase, climate variability, and adaptation efforts. The researchers compared future projections against two baselines: a scenario mimicking 1960-2014 temperature trends, and a hypothetical “no further warming” scenario.
Under the most pessimistic scenario—featuring high emissions and extremely limited adaptation—per capita income losses could reach 20-24% globally by 2100 compared to the “no further warming” baseline.
India faces particularly stark projections, with GDP per capita losses estimated at 2.13% by 2025, escalating to over 25% by century’s end under worst-case assumptions. However, faster adaptation could limit India’s losses to 4.89% of GDP per capita.
The research overturns traditional thinking about climate vulnerability. Canada tops the list of worst-affected nations with projected losses of 31%, followed by South Africa and the United States at 28% each. Russia and Greece face 27% losses, whilst Saudi Arabia, the UAE, South Korea, Mexico, and Australia could see 24% declines.
Even Nordic countries, traditionally viewed as climate-resilient, face significant economic damage. Sweden could lose 20% of per capita GDP, Finland 18%, Norway 17%, and Denmark 15%.
Under high-emissions scenarios with slow adaptation, the authors estimate the cost of inaction at 12-14% of global GDP by 2100.
“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,” the authors stated. “We have challenged this assumption, showing that climate change reduces income in all countries, hot and cold, rich and poor alike.”
The study emphasises that countries in hotter climates and low-income nations face disproportionately severe impacts, with losses ranging 30-60% above the global average. “Conversely, countries in colder climates are not spared from the adverse effects of climate change. The faster rate of temperature increases in these areas introduces unique challenges,” the report noted.
“No country is immune from the impact of climate change if greenhouse gas emissions are not curtailed,” the researchers warned. “Urgent action is needed to address climate change and protect economies from further income losses.”
In separate development, India based The Energy and Resources Institute (TERI) organised a national webinar and launched Version 2.0 of the Green Budgeting Toolkit, along with an online portal, to help governments, academia, and civil society systematically integrate environmental concerns into fiscal planning.
Several states and Union Territories are already implementing green budgeting, demonstrating its potential. Bihar expanded its green budget more than 4.5 times between 2020–21 and 2025–26, with schemes tripling. Assam scaled up by 1.6 times in just two years, with the number of schemes rising nearly sixfold. Puducherry, the first Union Territory to adopt green budgeting, increased allocations by 3.6 times between 2022–23 and 2025–26. States such as Kerala, Meghalaya, Odisha, and Rajasthan have also introduced environment- or climate-focused budgeting exercises. Green budgeting is also gaining traction globally. France categorises by impact, Indonesia integrates climate, Philippines tags budgets, EU tracks climate funds, TERI said.
