Climate change is costing trillions — and low-income countries are paying the price

Analysis of the effects of extreme heat shows that low-income, tropical countries have suffered the greatest financial losses.

Miryam Naddaf

Nature | November 07, 2022

A dried-up lagoon in Colombia, which is in a part of the world disproportionately affected by the cost of heatwaves.Credit: Juan David Moreno Gallego/Anadolu Agency/Getty

Climate change has so far cost the global economy trillions of dollars, but low-income countries in tropical regions have borne the brunt of these losses, finds a study that analysed the economic consequences of heatwaves worldwide over a 20-year period.

The research, published on 28 October in Science Advances1, estimates that the global economy lost between US$5 trillion and $29 trillion from 1992 to 2013, as a result of human-driven global warming. But the effect was worst in low-income tropical nations, leading to a 6.7% reduction in their national income on average, whereas high-income countries experienced only a 1.5% average decrease.

UNEQUAL BURDEN. Graphic shows tropical and low-income countries suffer the largest economic impacts as a result of heatwaves.
Source: Ref. 1

The study also underlines the need for the introduction of climate policies that address environmental injustice. Its findings “will support the discussions on loss and damage which will be a key topic in [the United Nations summit] COP27”, says Kai Kornhuber, a climate scientist at Columbia University in New York City.

Climate inequality

The unequal consequences of global warming are “something that’s been talked about quite qualitatively before”, says Vikki Thompson, a climate scientist at the University of Bristol, UK, but this analysis has “managed to really quantify it”. It also includes parts of the world that are often excluded from studies on heatwaves owing to a lack of data, she says.

To estimate the extreme heat that was caused by greenhouse-gas emissions, the researchers combined data on countries’ average annual temperatures and the five hottest days of each year from 1992 to 2013 with computational climate models. “Days that are very, very hot are one of the most tangible ways that we feel climate change,” says co-author Christopher Callahan, a climate-modelling researcher at Dartmouth College in Hanover, New Hampshire. “We know that they destroy crops, they reduce labour productivity, they cause more workplace injuries.” Callahan and his colleagues looked at the links between heatwaves and economic trends, at global and national scales.

Their models found that low-income regions that tend to have warm weather suffer the most from increased temperatures, despite their emissions often being much lower than those of wealthier regions (see ‘Unequal burden’). Countries such as Brazil, Venezuela and Mali were among the worst hit, with per capita gross domestic product (GDP) reduced by around 5% annually compared with what it would have been without human-driven heatwaves. By contrast, the GDP reduction in countries such as Canada and Finland is only around 1%.

Targeted investments

The findings could inform the way in which strategies that help countries to adapt to extreme heat or heavy rainfall are implemented. “The fact that we were able to sort of pinpoint this effect of the five hottest days of the year on the whole year, as economic effects, implies that those few days have really outsized effects,” says Callahan. “So investments targeted at mitigating the effects of heat extremes in the hottest parts of the year could deliver major economic returns.”

The study also emphasizes the need for rich countries to pay their share, says Erich Fischer, a climate scientist at the Swiss Federal Institute of Technology in Zurich. “Given the unequal burden and the share of historical emissions … the global north needs to support the global south in terms of coping with these adverse effects.”



  1. Callahan, C. W. & Mankin, J. S. Sci. Adv. 8, eadd3726 (2022).



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