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Large potential reduction in economic damages under UN mitigation targets

Nature volume 557, pages 549–553 (2018)Cite this article

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Abstract

International climate change agreements typically specify global warming thresholds as policy targets1, but the relative economic benefits of achieving these temperature targets remain poorly understood2,3. Uncertainties include the spatial pattern of temperature change, how global and regional economic output will respond to these changes in temperature, and the willingness of societies to trade present for future consumption. Here we combine historical evidence4 with national-level climate5 and socioeconomic6 projections to quantify the economic damages associated with the United Nations (UN) targets of 1.5 °C and 2 °C global warming, and those associated with current UN national-level mitigation commitments (which together approach 3 °C warming7). We find that by the end of this century, there is a more than 75% chance that limiting warming to 1.5 °C would reduce economic damages relative to 2 °C, and a more than 60% chance that the accumulated global benefits will exceed US$20 trillion under a 3% discount rate (2010 US dollars). We also estimate that 71% of countries—representing 90% of the global population—have a more than 75% chance of experiencing reduced economic damages at 1.5 °C, with poorer countries benefiting most. Our results could understate the benefits of limiting warming to 1.5 °C if unprecedented extreme outcomes, such as large-scale sea level rise8, occur for warming of 2 °C but not for warming of 1.5 °C. Inclusion of other unquantified sources of uncertainty, such as uncertainty in secular growth rates beyond that contained in existing socioeconomic scenarios, could also result in less precise impact estimates. We find considerably greater reductions in global economic output beyond 2 °C. Relative to a world that did not warm beyond 2000–2010 levels, we project 15%–25% reductions in per capita output by 2100 for the 2.5–3 °C of global warming implied by current national commitments7, and reductions of more than 30% for 4 °C warming. Our results therefore suggest that achieving the 1.5 °C target is likely to reduce aggregate damages and lessen global inequality, and that failing to meet the 2 °C target is likely to increase economic damages substantially.

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Fig. 1: Deriving impact projections.
Fig. 2: Global impact of limiting global warming to 1.5 °C relative to 2 °C.
Fig. 3: Country-level impact of limiting global warming to 1.5 °C relative to 2 °C.
Fig. 4: The impact of global warming on global GDP per capita, relative to a world without warming, for different forcing levels.
Extended Data Fig. 1: Discount rate scenarios used in calculation of cumulative discounted impacts of future warming.
Extended Data Fig. 2: Global GDP impacts can be negative at +1 °C but positive at +2 °C for some high-temperature-optimum bootstrap runs.
Extended Data Fig. 3: Change in cumulative global GDP under 1.5 °C versus 2 °C global warming by the end of the century under different discounting schemes.
Extended Data Fig. 4: Robustness of results to alternative specifications.
Extended Data Fig. 5: Robustness under alternative warming paths.
Extended Data Fig. 6: Projected change in global GDP (%) under global warming by the end of the century, for each SSP.

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Acknowledgements

We thank L. Goulder, S. Hsiang and D. Lobell for comments. We thank the Erol Foundation for funding.

Reviewer information

Nature thanks R. Kopp and the other anonymous reviewer(s) for their contribution to the peer review of this work.

Author information

Authors and Affiliations

  1. Department of Earth System Science, Stanford University, Stanford, CA, USA

    Marshall Burke & Noah S. Diffenbaugh

  2. Center on Food Security and the Environment, Stanford University, Stanford, CA, USA

    Marshall Burke & W. Matthew Alampay Davis

  3. National Bureau of Economic Research, Cambridge, MA, USA

    Marshall Burke

  4. Woods Institute for the Environment, Stanford University, Stanford, CA, USA

    Noah S. Diffenbaugh

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  1. Marshall Burke
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Author contributions: M.B. and N.S.D. designed the research. M.B., W.M.D. and N.S.D. analysed data, interpreted results and wrote the paper.

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Correspondence to Marshall Burke.

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Burke, M., Alampay Davis, W.M. & Diffenbaugh, N.S. Large potential reduction in economic damages under UN mitigation targets. Nature 557, 549–553 (2018). https://doi.org/10.1038/s41586-018-0071-9

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