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World economy set to lose up to 18% GDP from climate change if no action taken, reveals Swiss Re Institute’s stress-test analysis

22 April 2021 Swiss Re

• New Climate Economics Index stress-tests how climate change will impact 48 countries, representing 90% of world economy, and
ranks their overall climate resilience
• Expected global GDP impact by 2050 under different scenarios compared to a world without climate change:
-18% if no mitigating actions are taken (3.2°C increase);
-14% if some mitigating actions are taken (2.6°C increase);
-11% if further mitigating actions are taken (2°C increase);
-4% if Paris Agreement targets are met (below 2°C increase)
• Economies in Asia would be hardest hit, with China at risk of losing nearly 24% of its GDP in a severe scenario, while the world’s
biggest economy, the US, stands to lose close to 10%, and Europe almost 11%

Climate change poses the biggest long-term threat to the global economy. If no mitigating action is taken, global temperatures could rise by more than 3°C and the world economy could shrink by 18% in the next 30 years. But the impact can be lessened if
decisive action is taken to meet the targets set in the Paris Agreement, Swiss Re Institute’s new Climate Economics Index shows. This will require more than what is pledged today; public and private sectors will play a crucial role in accelerating the transition to net zero.

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