Global warming will lead to a 20% decrease in median incomes by 2050

According to a study, median incomes are forecasted to decrease by approximately one-fifth over the next 26 years due to the climate crisis.

This estimate comes in the context where anticipated damages are evaluated to be six times larger than the costs associated with limiting global warming to 2°C, according to an analysis published in the journal Nature, the most detailed one conducted in this field to date.

According to the research, extreme weather events such as rising temperatures, increased rainfall, and intense meteorological phenomena will lead to annual material damages of around $38 billion (equivalent to £30 billion) by mid-century. This immense sum is already integrated into the global economy due to substantial greenhouse gas emissions from fossil fuel burning and deforestation.

The impact of these disruptions will be severely felt in almost all regions of the world, disproportionately affecting communities less responsible for climate change, exacerbating social and economic inequalities.

According to the analysis, the projected global average income reduction will reach 19% by 2049. In the United States and Europe, the estimated decline will be around 11%, while in Africa and South Asia, it will reach 22%, with even higher percentages in some countries.

Leonie Wenz, a researcher at the Potsdam Institute for Climate Impact Research and one of the study’s authors, characterized these findings as “devastating,” expressing surprise at the extent of the losses and the inequalities highlighted.

The study also examined prospects for the second half of the current century, highlighting that actions taken now can significantly influence future outcomes. In the absence of adequate measures, projections show that average income losses could exceed 60% by 2100. However, if greenhouse gas emissions are reduced to zero by mid-century, income decline could be limited to around 20% during the same period.

Previous estimates, which anticipated continued economic growth in most economies of the northern hemisphere, are contradicted by this new document, which predicts significant losses even in countries like Germany (-11%), France (-13%), USA (-11%), and the United Kingdom (-7%) by mid-century. The most affected will be countries in regions already exposed to high temperatures, such as Botswana (-25%), Mali (-25%), Iraq (-30%), Qatar (-31%), Pakistan (-26%), and Brazil (-21%).