Global Economic Damages from Climate Change and the Gains from Complying with the Paris Accord
Economists have largely underestimated the global economic damages from climate change. Our work develops a large dimensional global trade model to account for various effects of global warming on national incomes for 139 countries, showing considerable global economic damages from climate change and relative gains from complying with the Paris Accord. Global economic damages, for example, range from $9.5 to $23 trillion per year in 2100, depending on temperature increase, and gains from complying with a 2-degree target relative to ‘business as usual’ are US$17+ trillion per year, even with limited damage functions. Model outcomes also show that South Asia, Southeast Asia and Africa are severely impacted at all temperature increases, underscoring the point that many poorer countries are the ones most impacted by climate change. The framework is extended to account for cumulative global damages which range from $271 to $604 trillion from now to 2100.
om Kompas is a Professor of Environmental Economics and Biosecurity in the School of Biosciences and the School of Ecosystem and Forest Sciences at the University of Melbourne. He is also one of three Chief Investigators in the Centre of Excellence for Biosecurity Risk Analysis (CEBRA), Research Group Director of the Centre for Environmental and Economic Research (CEER) at the University of Melbourne, and the Foundation Director of the Australian Centre for Biosecurity and Environmental Economics at the Australian National University (ANU). Tom is a Fellow of the Academy of Social Sciences Australia and a recipient of the Eureka Prize in Science. He was Director of the Crawford School of Public Policy at the ANU from 2009 to 2015.