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Home Science & Environment Environmental Policies

Global Economy More Vulnerable to Warming Than Previously Thought

April 1, 2025
in Environmental Policies
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Global Economy More Vulnerable to Warming Than Previously Thought
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A new study finds warming could inflict far more damage to the global economy than previously assumed.

Typically, to understand how future droughts, heat waves, storms, and floods will impact the global economy, experts look at the cost of extreme weather in the past. Using that data, they build models showing that warming will lead to trillions of dollars in losses in the decades to come. 

But this method is actually too optimistic, Australian scientists say, because it looks only at the local impact of extreme weather. By rattling supply chains, future storms and heat waves will also send ripples throughout the global economy, inflicting costs far higher than models currently show. 

“Because these damages haven’t been taken into account, prior economic models have inadvertently concluded that even severe climate change wasn’t a big problem for the economy,” said lead author Timothy Neal, of the University of New South Wales in Australia. 

For the new study, scientists revised three popular models to account for the global impact of extreme weather. One model, for instance, had showed that if emissions went unchecked, warming would shrink the global economy by 11 percent by the end of this century. But when the model was updated to account for the impact of warming on supply chains, the losses rose to 40 percent. 

The findings, published in Environmental Research Letters, underscore that in an interconnected world every country is vulnerable to warming. “There’s an assumption that some colder countries, like Russia or Canada, will benefit from climate change,” Neal said, “but supply chain dependencies mean no country is immune.” 

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Tags: economyGlobalPreviouslyThoughtvulnerableWarming
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