Study Predicts Global Warming Could Leave the Average Person 40% Poorer by 2100

For decades, the financial costs of climate change have been debated in boardrooms, parliaments, and international summits. Economists ran models, policymakers weighed options, and environmentalists rang alarm bells. But much of that conversation has underestimated a crucial factor—how deeply intertwined our economies are and how climate shocks in one part of the world can rattle the entire system. As extreme weather events spike up—from floods and droughts to the violent see-saws of "climate whiplash"—our globalized economy is showing just how vulnerable it is, stated the Daily Mail.

Now, a remarkable study from the University of New South Wales reveals just how high the stakes truly are. If the planet warms by 4°C by the year 2100—a deadly situation experts warn is possible without urgent climate action—the average person could be 40% poorer. Yes, you read that right. On top of this, the situation in the U.K. could fare even worse, with average incomes slashed by 46.5%. Even at a more middle ground warning of 2°C, the world economy is expected to shrink by 16% per person—more than ten times higher than older estimates. The important question is, what changed? Lead author Dr Timothy Neal shared, "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," stated The Guardian.

Previous models assumed that weather events only impacted local economies. In other words, if a flood hit one country, only that country’s economy would suffer. But that’s not the case today. The global economy doesn’t work in silos. Neal explained, "It is commonplace for the goods and services that people buy at the supermarket or department store to be sourced from all over the world, and goods from multiple countries might have been used to make a single manufactured product that ends up in a store. What this implies is that extreme weather that impacts one part of the world has implications for economies elsewhere in the world….Previous models sometimes suggested that richer or cooler countries, such as the U.K., will be significantly less affected than developing countries and some might even benefit," stated Daily Mail.

This more accurate picture makes us doubt the previous models. Old models, like DICE 2023, indicated that allowing 2.7°C of warming could be manageable at the moment. However, that’s not the case with the new research. The new research claims that the new parameter is just 1.7°C, aligning with the targets of the Paris Agreement. Neal noted, "What the results from our paper suggest is that what really matters for future economic growth in the U.K. under climate change is not only how climate change will change U.K. weather, but also how it will change all of the U.K.'s trading partners…Accordingly, we argue that the costs of allowing climate change to continue far exceed the costs of decarbonization," stated Daily Mail.

Moreover, another expert in the field, Prof Andy Pitman ( a climate scientist) remarked, "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." If proper actions are not taken at the right time, humans are concerned to be in the impending doom of climate change, stated The Guardian.