Climate crisis cost world $1.5 trillion in 2022 — report

The climate crisis is already shaving billions off the world's economy, with developing countries hardest hit, according to a new report published ahead of COP28 climate negotiations.

The report by the University of Delaware on Tuesday estimated that impacts from climate crisis cut 6.3 percent from global economic output last year when weighted across populations.

The figures reflect both direct consequences of the climate crisis — such as disruptions to agriculture and manufacturing and reduced productivity from high heat — as well as spill-over impacts on global trade and investments.

"The world is trillions of dollars poorer because of climate change and most of that burden has fallen on poor countries," said lead author James Rising of the University of Delaware.

"I hope that this information can clarify the challenges that many countries already face today and the support they urgently need to address them," he added.

When calculated without taking into account impacts borne by the average person, the global GDP loss was 1.8 percent of GDP — or about $1.5 trillion dollars — in 2022.

"The difference between those two numbers reflects the uneven distribution of impacts, which concentrate in low-income countries and tropical regions that typically have more population and less GDP," the authors said in a statement.

Least developed countries experienced a higher population-weighted GDP loss of 8.3 percent, with Southeast Asia and Southern Africa particularly affected — losing 14.1 percent and 11.2 percent of their GDP respectively.

On the other hand, some developed countries benefited. Thanks to warmer winters Europe saw a nearly five percent net gain in GDP last year.

But such gains are "poised to erode" as hotter summers offset milder winters, warns the report.

Loss and damage

At last year's COP27 talks in Egypt, nations agreed to set up a dedicated fund to help vulnerable countries cope with "loss and damage" from climate disasters and extreme weather.

While some details were recently agreed upon, the fund — and in particular who contributes to it and how much — will be a key point of negotiation at this year's COP28 talks in Dubai, which begins on Thursday.

Low- and middle-income countries have experienced a combined loss in capital and GDP totalling $21 trillion, about half of the total 2023 GDP of the developing world, in the last 30 years, the report said.

The authors specify that losses are "conservative estimates" because the analysis does not account for non-market losses and impacts.