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Climate Change Report Unveils Stark Economic Toll on Developing Nations Ahead of COP28

In a striking revelation just ahead of COP28, a report emanating from the Gerard J. Mangone Climate Change Science and Policy Hub at the University of Delaware lays bare the tangible economic toll exacted by climate change, with developing nations shouldering the predominant brunt. Titled "Loss and Damage Today: How Climate Change is impacting output and capital," the report delves into the intricate tapestry of global economic losses wrought by the pernicious effects of climate change.

Globally, the insidious footprint of climate change has left in its wake a population-weighted GDP loss of 6.3% in 2022. The unweighted percentage of global GDP lost is estimated at 1.8%, amounting to an approximate $1.5 trillion. This disconcerting asymmetry underscores the disproportionate impact, concentrated in low-income countries and tropical regions, where populations are dense, and GDP is scarce.

The report singles out India, exposing an 8% GDP loss in 2022 compared to a hypothetical world untouched by climate change. Over the same temporal expanse, India has borne witness to a cumulative decrease of 7.9% in capital wealth, predominantly attributed to climate-induced impacts on human-produced capital, such as infrastructure. The cumulative economic hemorrhage over the three decades since the Rio Convention is staggering, quantified at a colossal $3555 billion.

Dr. James Rising, the maestro behind the study and Assistant Professor at the University of Delaware, accentuates the urgent need for support to grapple with the challenges thrust upon countries contending with the economic aftershocks of climate change. He asserts, "The world is trillions of dollars poorer because of climate change, and most of that burden has fallen on poor countries. I hope that this information can elucidate the challenges that many countries already face today and the support they urgently need to address them."

The report also underscores the exacerbation of global inequalities, with high-income countries currently reaping net GDP gains, largely attributable to reduced winter chill. However, as the planet continues its inexorable warming trajectory, these benefits are poised to dwindle, with the deleterious effects of hotter summers nullifying the advantages of milder winters.

The analysis, drawing upon 58 economic models and leveraging machine learning, proffers a "best estimate" of the prevailing GDP and capital wealth losses incurred due to climate change. It casts light upon the intricate interplay between climate change, economic outcomes, and capital investments. Low and middle-income countries grapple with substantial capital losses, reaching a staggering $2.1 trillion, posing formidable long-term challenges to their economic resilience and growth.

When amalgamating GDP and capital losses, the analysis lays bare the staggering reality that low and middle-income countries have weathered a total loss of $21 trillion since the inception of the Rio Convention in 1992. Notably, all UNFCCC party groupings, except for the EU, find themselves submerged in total losses, with the G-77 bearing the heaviest burden at $29 trillion. The report, cognizant of its limitations, acknowledges these estimates as conservative, as certain impact channels and non-market losses are excluded from the analytical purview. As the world converges for COP28, the report stands as a stark reminder of the imperative for global collaboration to redress the economic repercussions wrought by climate change.

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