Economic Impacts of Climate Change_M1

Climate change effects on the economy

The economic impacts of climate change are diverse. Here are some examples.

Economic Losses due to extreme weather events

Climate change directly impacts the intensity and frequency of extreme weather events, such as floods, droughts, and storms.

IMPACTS on the GDP

Climate change can compromise key economic activities, directly impacting on global economic value.

food insecurity

Climate change has a direct impact on agricultural productivity, by affecting temperature and precipitation patterns.

Health risks and costs

With health systems already under stress worldwide, in terms of the existing depth and breadth of the coverage they provide, any additional shocks present a significant economic challenge.

While climate-related disasters are detrimental to healthcare resources for all populations, there are additional threats to vulnerable communities, which already face limited access to quality medical care. Climate events will not only increase mortality rates, but also morbidity putting an extra pressure on health systems.

Climate change has a severe impact on food and farming. While some crops might benefit from increased CO2 in the atmosphere, the increased recurrence of extreme weather events, the change in precipitation patterns and the complete destruction of some ecosystems means that climate change can significantly disrupt food production worldwide also affecting prices. A spike in food prices pushes the poorer segments of the society into food distress as they have less resources to cope with the increased prices.

If global temperatures continue increasing at the current rate, the world could lose at least 10% of its total economic value by 2050. The graph shows us that the loss in economic value is more pronounced in the world's developing regions, which will reel from the substantive costs of unmitigated climate change and the high costs of adapting to the increasingly frequent and more intense climate change-driven weather events.

Source:

Statista, 2024

The World Meteorological Organization (WMO) estimates that the global economy lost around 1,381 trillion US dollars from 2010 to 2019 due to weather, climate, and water-related disasters.