Abstract
Empirical evidence suggests that variations in climate affect economic growth across countries over time. However, little is known about the relative impacts of climate change on economic outcomes when global mean surface temperature (GMST) is stabilized at 1.5°C or 2°C warming relative to pre-industrial levels. Here we use a new set of climate simulations under 1.5°C and 2°C warming from the ‘Half a degree Additional warming, Prognosis and Projected Impacts' (HAPPI) project to assess changes in economic growth using empirical estimates of climate impacts in a global panel dataset. Panel estimation results that are robust to outliers and breaks suggest that within-year variability of monthly temperatures and precipitation has little effect on economic growth beyond global nonlinear temperature effects. While expected temperature changes under a GMST increase of 1.5°C lead to proportionally higher warming in the Northern Hemisphere, the projected impact on economic growth is larger in the Tropics and Southern Hemisphere. Accounting for econometric estimation and climate uncertainty, the projected impacts on economic growth of 1.5°C warming are close to indistinguishable from current climate conditions, while 2°C warming suggests statistically lower economic growth for a large set of countries (median projected annual growth up to 2% lower). Level projections of gross domestic product (GDP) per capita exhibit high uncertainties, with median projected global average GDP per capita approximately 5% lower at the end of the century under 2°C warming relative to 1.5°C. The correlation between climate-induced reductions in per capita GDP growth and national income levels is significant at the p < 0.001 level, with lower-income countries experiencing greater losses, which may increase economic inequality between countries and is relevant to discussions of loss and damage under the United Nations Framework Convention on Climate Change.This article is part of the theme issue ‘The Paris Agreement: understanding the physical and social challenges for a warming world of 1.5°C above pre-industrial levels'.
Highlights
The Paris Agreement proposed to pursue efforts to stabilize global mean surface temperature (GMST) at 1.5°C warming relative to pre-industrial levels
The correlation between additional reductions in per capita gross domestic product (GDP) growth between 1.5°C and 2.0°C and national income levels is significant at the p < 0.001 level, with lower-income countries experiencing greater reductions, which may lead to increased economic inequality across countries and is relevant to discussions of loss and damage under the United Nations Framework Convention on Climate Change (UNFCCC)
Using a set of dedicated climate simulations to project GMST increases of 1.5°C and 2°C, we find greater warming in population-weighted temperatures in the Northern Hemisphere than expected from a uniform increase in average temperatures, in line with established climate models
Summary
The Paris Agreement proposed to pursue efforts to stabilize global mean surface temperature (GMST) at 1.5°C warming relative to pre-industrial levels. We use a new set of climate simulations specified to lead to 1.5°C and 2°C warming relative to pre-industrial levels to project changes in economic growth using empirical estimates of climate impacts. We map gridded climate data for both the historical dataset and HAPPI projections to country levels by averaging over grid cells whose centroids lie within each country and weighting by population to match the socio-economic outcome data (figure 2) While some countries such as the United Kingdom or the Congo see a projected population-weighted warming close to the global average of 1.5°C, and some countries expect slightly below average warming (e.g. Australia and Argentina), most regions ( in the Northern Hemisphere) are expected to reach drastically higher temperatures (e.g. Greenland 2.2°C, Russia 2°C and Canada 2°C). (c) difference in temperature between 2°C and 1.5°C (d) difference in temperature between 1.5°C HAPPI and ‘Naive 1.5°C’
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