There is prosperity in Europe, we have no idea what awaits us

Not only geopolitical tensions, the energy crisis or inflation, but climate change is increasingly threatening the global economyt, which as a whole may shrink by a fifth by the middle of the century – points out a recent study, summarizing the economic effects of extreme weather experienced so far. Based on this, it was determined: welfare may decline mostly in Europe in the coming periodn.

According to the calculations of the Potsdam Institute for Climate Impact Research (PIK), the world economy faces losses as a result of global warming even if emissions of climate-damaging gases are drastically reduced in the future and if global warming is managed to be reduced to two degrees per year. And without it more than 38 trillion dollars in economic damage can be expected every year – this is an amount six times larger than the global climate protection measures.

Due to extreme weather, storms and forest fires the losses show up spectacularly in agricultural yields, labor productivity and changes in infrastructure.

The economy collapses, the damages increase

According to the prognosis, the expected damage may vary greatly from region to region, but the poorest countries and the countries least responsible for climate change will be hit hardest. High revenue losses are expected in most regions, including North America and Europe, while the climate crisis hits South Asia and Africa the hardest.

In the case of Germany – as in the USA – researchers predict that within thirty years the economy will shrink by 11 percent compared to a scenario without climate effects, but for this, global warming must be limited to below two degrees, otherwise the loss of production will be even greater.

However, according to the UN, the current climate protection plans are not yet sufficient to minimize the expected losses.

The climate crisis was not an empty joke

The adjustment measures are necessary because the damages forecasted now will occur in the future as a consequence of the greenhouse gases that have already been emitted.

And this means that in industrialized countries, such as the Germans CO₂ emissions must be drastically and immediately reducedotherwise the losses in Europe’s largest economy will reach the global average, as much as 60 percent, by the end of the century.

The current calculations of the Potsdam researchers are surprisingly close to the predictions known as the Stern Report, which were prepared almost twenty years ago by the economist Nicholas Stern on behalf of the British government. In 2006, it stated: climate change threatens the international economy with a decline of around 20 percent, which prediction seems to be coming true for now.

It cannot be emphasized enough that we must act urgently. The longer we delay, the more difficult and costly the climate and environmental crisis will be, said Matthias Kopp, an employee of WWF Germany’s environmental protection association, to the dpa news agency.