Supply chain disruptions will further exacerbate economic losses from climate change

Global GDP loss from climate change will increase exponentially the warmer the planet gets when its cascading impact on global supply chains is factored in, finds a new study led by UCL researchers. The study is the first to chart "indirect economic losses" from climate change on global supply chains that will affect regions that would have been less affected by projected warming temperatures. These previously unquantified disruptions in supply chains will further exacerbate projected economic losses due to climate change, bringing a projected net economic loss of between $3.75 trillion and $24.7 trillion in adjusted 2020 dollars by 2060, depending on how much carbon dioxide gets emitted. Senior author Professor Dabo Guan (UCL Bartlett School of Sustainable Construction) said: "These projected economic impacts are staggering. These losses get worse the more the planet warms, and when you factor in the effects on global supply chains it shows how everywhere is at economic risk." As the global economy has grown more interconnected, disruptions in one part of the world have knock-on effects elsewhere in the world, sometimes in unexpected ways. Crop failures, labour slowdowns and other economic disruptions in one region can affect the supplies of raw materials flowing to other parts of the world that depend on them, disrupting manufacturing and trade in faraway regions. This is the first study to analyse and quantify the propagation of these disruptions from climate change, as well as their economic impacts.