Did you know? Climate change is a thief of wages and retirement funds!

The latest research from the prestigious journal Nature estimates that by 2049, climate change is projected to cause annual economic losses of $38 trillion. By 2100, these losses could double.

The $38 trillion loss is significant. It's roughly more than twice the entire annual GDP of the European Union, 1.5 times the annual GDP of the United States, or nearly 30 times the GDP of Taiwan in 2023.

The paper studied the economic impacts of climate on over 1600 regions globally over the past 40 years, examining how changes in average temperatures affected economic growth rates. It then utilized computer simulations to predict future trends. The results revealed that compared to a scenario of "no warming," climate change is projected to lead to a 18.8% reduction in global per capita income within 26 years.

Despite nearly all countries facing economic losses, the greatest impacts are felt by those that are the poorest, with historically low carbon emissions, and least responsible for carbon emissions. The study estimates that the world's poorest countries experience income losses 61% higher than the wealthiest countries, while countries with the lowest historical carbon emissions suffer income losses 40% higher than those with the highest historical emissions.

"This underscores once again the pervasive injustice of climate impacts," the paper states.

Regionally, affluent North America and Europe experience the lightest losses, with per capita income expected to decline by 11%. Southeast and East Asia, including Taiwan, are projected to experience a 19% decrease, slightly higher than the global average. The hardest-hit regions are South Asia and Africa, where income is expected to decrease by over 22%.

Indeed, this assessment only considers income losses, but climate change also amplifies other costs of living.

Global consulting firm ICF estimates that if we continue business as usual without actively reducing emissions, leading to global warming exceeding 4°C by the end of this century, under this "high emissions" scenario, the "lifetime personal cost" for a baby born in the United States in 2024 could be as high as $500,000, approximately NT$16 million, by the time they reach 80 years old, due to climate change.

What exactly does this NT$16 million include?

*Housing: Frequent extreme weather events such as hurricanes and floods lead to increased costs for maintenance, repairs, and insurance of houses. The estimated lifelong housing cost is expected to increase by $125,000 (approximately NT$4.07 million).

*Food: Extreme weather impacts agriculture and supply chains, resulting in a lifetime increase in food prices of $33,000 (approximately NT$1.07 million).

*Energy and Transportation: Extreme weather threatens energy infrastructure and supply, leading to price hikes in electricity, oil, gas, and even car insurance. Additionally, heatwaves force people to use air conditioning more aggressively, with an estimated lifelong cost increase of $92,000 (approximately NT$2.99 million).

*Healthcare: Heatwaves contribute to conditions like heat cramps, heat exhaustion, and heatstroke, exacerbating the conditions and mortality rates of cardiovascular and respiratory diseases. This results in a lifetime increase in healthcare costs of $5,000 (approximately NT$160,000).

*Taxes: Extreme weather-induced economic losses erode tax revenues, requiring government relief and reconstruction efforts. With insufficient funds, tax increases are inevitable. Therefore, individuals born this year will have to pay an additional $200,000 in taxes over their lifetime (approximately NT$6.51 million).

Lastly, while all expenses increase, lifetime income decreases by $25,000 (approximately NT$880,000) due to reduced working hours caused by extreme weather and health risks.

Expenses rise, income dwindles, and people become poorer.

The ICF survey report states, 'Climate change will lead to a 9% increase in living expenses, forcing many Americans to make difficult decisions regarding food, housing, and other daily expenditures.'

However, according to ICF, these figures are still underestimated. When factoring in investment losses in retirement funds, the losses nearly double immediately. Additionally, the report did not include increased defense expenditures (the US Department of Defense is elevating climate change to a national security priority), federal mortgage risks (extreme weather leading to total or partial loss of mortgage collateral), and damage to federal buildings and facilities in estimating tax increases, otherwise the increases would be even higher. Moreover, this calculation is based on 2024 prices, and with inflation, the actual increase in living expenses could be even greater.

"We have the choice to spend the $38 trillion economic loss or invest $6 trillion—less than one-sixth of the loss—to keep the temperature rise within 2°C."

ICF's report also reaches a similar conclusion: in a low-emission scenario (carbon peaking in 2080, with a warming of 1.5°C), economic losses would be significantly lower, ranging from $500,000 to $1 million. The amount of additional taxes to be paid would also decrease from $200,000 to $5,200, representing a decrease of 97.4%. It may even turn losses into gains, as individuals born this year could potentially earn an additional $25,000 in "low-carbon transition premiums" instead of losses, particularly by investing in companies developing climate mitigation or adaptation technologies.

As the old saying goes, keeping within 2°C is crucial to control economic hemorrhage, maintain stable salaries, and protect savings.

※ This article is authorized for republication from "CSR@天下," with the original title "Climate Change Will Make Future Generations Poorer! Americans Born in 2024 Will Spend at Least $16 Million on Lifetime Housing, Food, and Healthcare Expenses." CC collaborative licensing terms do not apply.

Source:
Environmental Information Center