{"id":88570,"date":"2023-01-12T18:19:00","date_gmt":"2023-01-12T22:19:00","guid":{"rendered":"https:\/\/www.shortform.com\/blog\/?p=88570"},"modified":"2023-01-17T17:10:36","modified_gmt":"2023-01-17T21:10:36","slug":"economic-effects-of-climate-change","status":"publish","type":"post","link":"https:\/\/www.shortform.com\/blog\/economic-effects-of-climate-change\/","title":{"rendered":"Economic Effects of Climate Change: The Real Threat We Face"},"content":{"rendered":"\n<p>How does climate change impact the economy? Should this be a major concern?<\/p>\n\n\n\n<p>The real cost of climate change will be economic, argues Bjorn Lomborg. He contends that we should <a href=\"https:\/\/www.shortform.com\/blog\/how-to-not-catastrophize\/\">stop catastrophizing<\/a> about the weather, the planet, and our very existence and focus instead on what climate change will do to global GDP.<\/p>\n\n\n\n<p>Keep reading to learn about the anticipated economic <a href=\"https:\/\/www.shortform.com\/blog\/side-effects-of-global-warming\/\">effects of climate change<\/a>.<\/p>\n\n\n\n<!--more-->\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-economic-effects-of-climate-change\">Economic Effects of Climate Change<\/h2>\n\n\n\n<p>Lomborg believes that climate change won\u2019t lead to apocalyptic weather, and he tries to estimate what its cost will <em>really <\/em>be. Ultimately, he concludes that, on our current trajectory, <strong>climate change will cost about 4% of global GDP by 2100<\/strong>.<\/p>\n\n\n\n<p>To reach this estimate, Lomborg cites Nobel Laureate William Nordhaus, who developed the Dynamic Integrated Climate-Economy model (DICE) that predicts the economic effects of climate change. DICE predicts the impact of climate change on many areas, like agriculture, energy, and biodiversity. By taking various parameters into account, like CO<sub>2<\/sub> emissions and human adaptation, it calculates the net economic impact of predicted climate change.&nbsp;<\/p>\n\n\n\n<p>(Shortform note: Although DICE enjoys wide acclaim, some have argued that its assumptions are outdated, yielding faulty predictions. In particular, an influential 2020 paper concluded that DICE<a href=\"https:\/\/www.nature.com\/articles\/s41558-020-0833-x\" target=\"_blank\" rel=\"noreferrer noopener\"> underestimates the damage of climate change<\/a> because it uses inaccurate depictions of the carbon cycle. So, even though Lomborg adds 25% to the model\u2019s predictions to account for unexpected damages, his prediction might still be inaccurate.)<\/p>\n\n\n\n<p>Using the middle-of-the-road scenario from MAGICC (the Model for the Assessment of Greenhouse Gas Induced Climate Change), which sees the temperature rise 7.4\u00b0F by 2100, DICE predicts that our GDP will be 2.9% lower than it would\u2019ve been with no temperature rise. However, to allow for unexpected damages from climate change, Lomborg adds 25% to DICE\u2019s predicted decrease in GDP, yielding a final estimate of a 3.6% drop in GDP. In other words, we can expect climate change to have a significant\u2014but not catastrophic\u2014effect on global prosperity.<\/p>\n\n\n\n<p>(Shortform note: Different models yield different predictions about climate change\u2019s impact on global GDP. For example, in one 2022 study, researchers predicted that <a href=\"https:\/\/www.reuters.com\/world\/climate-change-putting-4-global-gdp-risk-new-study-estimates-2022-04-27\/\" target=\"_blank\" rel=\"noreferrer noopener\">climate change would cut 4% of global GDP by 2050<\/a>, a half-century earlier than Lomborg\u2019s prediction. Because of this variability between predictions, we should approach any individual prediction with caution.)<\/p>\n\n\n\n<p>Lomborg uses this 3.6% reduction in GDP as his benchmark for evaluating climate policies. If a climate policy reduces GDP by less than 3.6%, it\u2019s worth considering.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>How does climate change impact the economy? Should this be a major concern? The real cost of climate change will be economic, argues Bjorn Lomborg. He contends that we should stop catastrophizing about the weather, the planet, and our very existence and focus instead on what climate change will do to global GDP. Keep reading to learn about the anticipated economic effects of climate change.<\/p>\n","protected":false},"author":9,"featured_media":88574,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[81,160],"tags":[850],"class_list":["post-88570","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economics","category-science","tag-false-alarm","","tg-column-two"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v24.3 (Yoast SEO v24.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Economic Effects of Climate Change: The Real Threat We Face - Shortform Books<\/title>\n<meta name=\"description\" content=\"Stop catastrophizing about the weather, the planet, and our lives, and focus instead on the economic effects of climate change. Here&#039;s why.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.shortform.com\/blog\/economic-effects-of-climate-change\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Economic Effects of Climate Change: The Real Threat We Face\" \/>\n<meta property=\"og:description\" content=\"Stop catastrophizing about the weather, the planet, and our lives, and focus instead on the economic effects of climate change. 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