In the United States, the southeastern and southwestern states get economically pinched more than the northern ones with parts of Arizona and New Mexico taking the biggest monetary hit, according to the study. In Europe, southern regions, including parts of Spain and Italy, get hit harder than places like Denmark or northern Germany.
Only Arctic adjacent areas — Canada, Russia, Norway, Finland and Sweden — benefit, Kotz said.
It also means countries which have historically produced fewer greenhouse gas emissions per person and are least able to financially adapt to warming weather are getting the biggest financial harms too, Kotz said.
The world’s poorest countries will suffer 61% bigger income loss than the richest ones, the study calculated.
“It underlies some of the injustice elements of climate,” Kotz said.
This new study looked deeper than past research, examining 1,600 global areas that are smaller than countries, took several climate factors into account and examined how long climate economic shocks last, Kotz said. The study examined past economic impacts on average global domestic product per person and uses computer simulations to look into the future to come up with their detailed calculations.
The study shows that the economic harms over the next 25 years are locked in with emission cuts producing only small changes in the income reduction. But in the second half of this century that’s when two different possible futures are simulated, showing that cutting carbon emissions now really pays off because of how the heat-trapping gases accumulate, Kotz said.
If the world could curb carbon pollution and get down to a trend that limits warming to 2 degrees Celsius (3.6 degrees Fahrenheit) above pre-industrial times, which is the upper limit of the 2015 Paris climate agreement, then the financial hit will stay around 20% in global income, Kotz said. But if emissions increase in a worst case scenario, the financial wallop will be closer to 60%, he said.
That shows that the public shouldn’t think it’s a financial “doomsday” and nothing can be done, Kotz said.
Still, it’s worse than a 2015 study that predicted a worst case income hit of about 25% by the end of the century.
Marshall Burke, the Stanford University climate economist who wrote the 2015 study, said this new research’s finding that the economic damage ahead is locked in and large “makes a lot of sense.”
Burke, who wasn’t part of this study, said he has some issues with some of the technical calculations “so I wouldn’t put a ton of weight on their specific numerical estimates, but I think the big picture is basically right.”
The conclusions are on the high end compared to other recent studies, but since climate change goes for a long time and economic damage from higher temperatures keep compounding, they “add up to very large numbers,” said University of California Davis economist and environmental studies professor Frances Moore, who wasn’t part of the study. That’s why fighting climate change clearly passes economists’ tests of costs versus benefits, she said.