World could lose a fifth of GDP without climate action: Study

Young climate activists hold a banner as they attend a rally to mark the World Earth Day in Tokyo, Japan, on April 22, 2021. PHOTO: REUTERS

ZURICH (REUTERS) - The global economy could lose nearly a fifth of economic output by 2050 should the world fail to check climate change, with Asia particularly at risk, a study released by reinsurer Swiss Re on Thursday (April 22) found.

The report here from the Swiss Re Institute said output could be 18 per cent lower than in a world without climate change if no mitigating actions are taken and temperatures rise by 3.2 deg C.

Should targets under the Paris Agreement be met and temperatures rise less than 2 deg C, the shrinkage can be limited to 4 per cent, it found.

"Economies in Asia would be hardest hit, with China at risk of losing nearly 24 per cent of its GDP in a severe scenario, while the world's biggest economy, the US, stands to lose close to 10 per cent, and Europe almost 11 per cent," the report found.

Its stress test examined how 48 economies would be impacted by the effects of climate change under four different temperature increase scenarios.

As global warming makes the impact of weather-related natural disasters more severe, it can lead to substantial income and productivity losses over time, it said.

For example, rising sea levels result in loss of land that could have otherwise been used productively and heat stress can lead to crop failures. Emerging economies in equatorial regions would be most affected by rising temperatures.

Join ST's Telegram channel and get the latest breaking news delivered to you.