Research Paper Climate Change Effects on GDP

The impacts of climate change on Gross Domestic Product (GDP) have been a topic of extensive research, revealing both direct and indirect effects on economies worldwide. A seminal study by Frankhauser and Tol (1996) in "Energy Policy" and a subsequent paper in "Mitigation and Adaptation Strategies for Global Change" (Fankhauser & Tol, 1997) indicated that climate change could cause aggregated monetized damage of 1.5 to 2.0% of world GDP, with the Organization for Economic Co-operation and Development (OECD) countries losing 1.0 to 1.5% and developing countries facing losses between 2.0 to 9.0%. This differential impact underscores the varying degrees of vulnerability and resilience among economies to climate-induced changes.

Further research has shed light on specific sectors and regional impacts. For instance, Costinot, Donaldson, and Smith (2014) in the "Journal of Political Economy" found that climate change's impact on agricultural markets could lead to a 0.26 percent reduction in global GDP when considering adjusted trade and production patterns. Similarly, a study by Raddatz (2009) in the "World Bank Policy Research Working Paper Series" highlighted that climate-related disasters could reduce real GDP per capita by at least 0.6 percent, with cumulative losses of 1 percent of GDP per capita, emphasizing the significant macroeconomic costs.

Moreover, projections by Dellink, Lanzi, Château, Bosello, Parrado, and Bruin (2014) suggest that climate change impacts could lead to a global GDP loss of 0.7% to 2.5% by 2060. This variability in projected impacts illustrates the complexity of forecasting economic outcomes under different climate scenarios.

Overall, the body of research consistently points to a significant negative impact of climate change on global economic output, with disproportionate effects on different regions and sectors, necessitating urgent and comprehensive mitigation strategies.

(Frankhauser & Tol, 1996); (Fankhauser & Tol, 1997); (Costinot, Donaldson, & Smith, 2014); (Raddatz, 2009); (Dellink, Lanzi, Château, Bosello, Parrado, & Bruin, 2014).