New Study Warns of Devastating Economic Impact from Unchecked Climate Warming by 2100
In a groundbreaking study published in the open-access journal PLOS Climate, researchers Kamiar Mohaddes and Mehdi Raissi from the University of Cambridge’s climaTRACES Lab have quantified the macroeconomic toll that rising global temperatures could inflict by the end of the 21st century. Their findings paint a stark picture: if climate change continues unabated, global GDP per capita could decline by as much as 24% by the year 2100 compared to a scenario in which temperatures stabilize and “no further warming” occurs. This study offers a comprehensive, country-specific macroeconomic analysis based on sophisticated climate modeling and economic simulations, marking an important advance in understanding the long-term economic repercussions of climate dynamics.
The researchers employed computational modeling techniques integrating future temperature trajectories from the Intergovernmental Panel on Climate Change (IPCC) with economic data from 174 countries. These temperature projections incorporate a range of climate scenarios, including varying rates of temperature increase, natural climate variability, and distinct mitigation and adaptation strategies. By simulating how sustained warming above historical norms, specifically from 2015 to 2100, would impact annual GDP per capita, they provide critical quantitative insights into the scale of income losses that different nations might endure if greenhouse emissions remain unchecked.
Mohaddes and Raissi designed their analysis around two main comparative benchmarks. The first baseline represents a scenario where temperature rises continue in line with historical patterns observed between 1960 and 2014. The second is a more optimistic “no further warming” hypothetical scenario, suggesting zero additional temperature increases beyond present levels. Against these baselines, the study evaluates economic outcomes under escalating emissions trajectories, ranging from moderate temperature rise to the most extreme projections consistent with business-as-usual emissions pathways.
The study’s key finding—that unchecked climate change could reduce global average per capita income by nearly a quarter—emerges from simulations where temperatures increase persistently at approximately 0.04°C per year. This seemingly incremental annual warming compounds into severe economic damage by century’s end. Moreover, factoring in natural climate variability, which encompasses irregular fluctuations such as El Niño events and volcanic activity, raises the projected losses to between 12% and 14% even under moderate warming conditions. Under the highest emissions path, income losses for individuals globally could approach the harrowing mark of 20 to 24%, a level economists warn would trigger profound social and political upheaval.
One of the pivotal contributions of this research is its detailed country-level resolution, revealing that the economic shocks from climate change will be unevenly distributed worldwide. Low-income and tropical countries are especially vulnerable, with projected income declines running 30% to 60% higher than the global average. These disparities amplify existing inequalities, as hotter countries—often those least equipped with financial and infrastructural resources to adapt—face the most acute economic vulnerabilities. The findings underscore the complexity of climate economics: effects are not uniform, but instead magnified by geography, infrastructure resilience, and economic development levels.
The study also scrutinizes the efficacy of adaptation measures and stringent mitigation policies. While acknowledging that adaptation cannot entirely negate the economic consequences of warming, the authors demonstrate that adhering to international climate goals such as those established under the 2015 Paris Agreement could substantially reduce income losses. For instance, limiting warming to approximately 0.01°C per year, consistent with Paris targets, may avoid income losses and even produce a modest global income gain of approximately 0.25% compared to continuing current historical trends. This highlights how international cooperation and timely policy action can stabilize both climate and economic health.
Mohaddes and Raissi’s work challenges a once common economic assumption that the primary victims of climate change would be hotter, developing nations in the Global South. Their simulations show that warming damages income across all countries, irrespective of latitude or economic status. Cold countries face disruptions to infrastructure and industries such as manufacturing, retail, and transport—not just sectors traditionally linked to ecosystems like agriculture. This comprehensive perspective reframes climate change as a universal economic threat transcending geopolitical boundaries and sectoral divisions.
The macroeconomic modeling integrates interdisciplinary approaches spanning climate science, economics, and computational simulation. By synthesizing temperature projections with gross domestic product data, the study accounts for complex feedback loops and nonlinearities in economic responses to environmental stressors. This methodological rigor lends substantial robustness to the projections, providing policymakers and researchers with actionable data on the economic stakes of various warming scenarios. Importantly, it highlights that the costs of inaction will likely dwarf the investments required for mitigation and adaptive resilience-building.
Moreover, the findings have critical implications for global policy frameworks and adaptation planning. The authors advocate for urgent, coordinated efforts to curb greenhouse gas emissions and implement adaptive strategies tailored to country-specific vulnerabilities revealed through their detailed data. For economically disadvantaged and hotter regions facing disproportionately severe impacts, these insights can inform targeted financial support, infrastructure investment, and technological innovation to enhance climate resilience and safeguard livelihoods.
At its core, the study sends a clarion call: no country, rich or poor, cold or hot, can escape the economic ravages of unchecked climate warming. The researchers emphasize that the escalating global temperature is intrinsically linked to shrinking incomes, reduced productivity, and fragmented economic systems—a reality demanding immediate and comprehensive responses. Delay risks exposing all nations to protracted economic decline, social instability, and exacerbated inequalities that could undermine decades of development progress.
This research underscores the intersection of climate science and macroeconomics in addressing one of the defining challenges of the 21st century. By rigorously quantifying the economic fallout from successive degrees of warming, Mohaddes and Raissi provide an urgently needed empirical foundation to guide international climate negotiations and national policy formulations. Their evidence-based insights are poised to galvanize public discourse, emphasizing that climate change mitigation and adaptation are not abstract environmental issues but crucial economic imperatives with tangible outcomes for billions worldwide.
As global warming accelerates, the study illuminates a stark economic reality: the planet’s climate trajectory will decisively shape future living standards and economic prosperity. The researchers conclude emphatically that the window for effective intervention narrows rapidly. The choices made today in cutting emissions and investing in resilient infrastructure will determine whether economies thrive or falter alongside a warming planet. No delay is prudent; urgent action is paramount.
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Subject of Research: People
Article Title: Rising temperatures, melting incomes: Country-specific macroeconomic effects of climate scenarios
News Publication Date: 24-Sep-2025
Web References:
- https://climatraces.com/
- https://www.ipcc.ch/
- https://unfccc.int/process-and-meetings/the-paris-agreement
- https://journals.plos.org/plosclimate/article?id=10.1371/journal.pclm.0000621
References:
Mohaddes K, Raissi M (2025) Rising temperatures, melting incomes: Country-specific macroeconomic effects of climate scenarios. PLoS Clim 4(9): e0000621. https://doi.org/10.1371/journal.pclm.0000621
Image Credits: Mohaddes et al., 2025, PLOS Climate, CC-BY 4.0
Keywords: Climate change economics, Global GDP loss, Temperature projections, Macroeconomic modeling, Climate mitigation, Paris Agreement, Economic vulnerability, Climate adaptation, Inequality, Country-specific effects
