Achieving Paris Agreement Goals Could Create $605 Trillion in Net Global Benefits
New modeling from scholars at Resources for the Future examines the benefits of upholding global Paris Agreement commitments—and finds that limiting global average temperature rise results in trillions of dollars of present-value benefits over the next few centuries.
💡 What’s the story?
Holding global temperature rise to 1.5°C would produce roughly $605 trillion in present-value benefits through 2300, according to a new issue brief by researchers at Resources for the Future (RFF). These benefits, which are in effect $6.8 trillion per year, are equivalent to 2 percent of projected global GDP between 2020 and 2300.
The benefits come from reducing the economic toll of climate change. RFF analysis projects that the world is on track to limit global temperature rise to about 2.5°C, a scenario that would cost society approximately $918 trillion by 2300. Limiting global temperature rise to even 2°C would cut those projected climate damages in half.
These findings are particularly relevant in light of this year’s Conference of the Parties (COP28), which will also mark the conclusion of the world’s first global stocktake. The stocktake measures the progress of nations toward emissions-reduction goals in the Paris Agreement and considers what further actions will be needed to meet these goals.
“There are meaningful—and perhaps painful—economic impacts associated with releasing greenhouse gases into the atmosphere. Addressing climate change by upholding the promises that the world made in the Paris Agreement will not only serve to protect the environment, but to protect the global economy as well.”
— Jordan Wingenroth, Research Associate
📉 How do we know?
To estimate the costs associated with climate change, the research team used the Greenhouse Gas Impact Value Estimator (GIVE) model, which RFF and the University of California, Berkeley, developed to estimate the social cost of carbon. The team ran the GIVE model for three warming scenarios: the “best guess” trajectory based on expert opinion, which expects 2.5°C of warming; and alternative scenarios in which the world limits average global temperature rise to 1.5°C and 2°C. The team estimated the benefits of meeting climate goals by measuring the differences in damages between the three different pathways.
One of the strengths of the GIVE model is that it integrates uncertainty about future population, economic growth, and greenhouse gas emissions into its results. This helped the research team come up with plausible estimates for the long-term costs of climate change and the benefits of emissions reductions.
Notably, the benefits and costs laid out in this paper may be conservative estimates; the GIVE model does not consider the costs of climate change associated with biodiversity loss, decreased worker productivity, and wildfires. The model also does not fully capture the benefits of progress made toward the Paris Agreement goals before 2021.
Estimated Benefits of Meeting Paris Agreement Goals
“Adapting to and mitigating climate change will entail costs, but our modeling shows that there are substantial costs to ignoring the problem and substantial benefits to action. As the world prepares for COP28, it’s worth considering the trillions of dollars of frequently unquantified impacts.”
— Brian C. Prest, Fellow
☀️ What do the 1.5°C and 2°C emissions pathways entail?
COP28 in December will shed new light on the likelihood of meeting global climate goals, but the research team shows that we are not on track to meet the global goal of keeping global average temperature rise to “well below” 2°C. Reducing emissions—and avoiding the costs laid out in the issue brief—will require significant policy changes.
Even in the most ambitious modeled scenario, the research team projects that temperature rise will likely overshoot 1.5°C for some time, but negative-emissions technologies could be deployed to return temperature rise below that threshold.
Both pathways that limit average global temperature rise involve rapid decreases in carbon dioxide emissions and substantial—but slower—declines in methane and nitrous oxide emissions.
Annual Global Net Emissions
“Greenhouse gases, especially carbon dioxide, linger in the atmosphere and continue to affect the climate for a long time—that is partly the reason why we studied such a large time frame in this paper. The damages to the climate from actions that we take today will still be acutely felt decades from now, so it’s critically important that we don’t push the conversation about meeting our climate goals down the road.”
— Kevin Rennert, Fellow
📚 Where can I read more?
Read the issue brief, “The Economic Benefits of Achieving the Paris Agreement Goals,” by RFF Research Associate Jordan Wingenroth, Fellow Brian C. Prest, and Fellow Kevin Rennert.
For the authors’ commentary on the findings, read the related blog post, “Achieving the Paris Agreement Temperature Targets Would Yield Major Global Economic Benefits.”
For more research in this space, read the team’s related March 2023 issue brief, “Will Nations Meet the Paris Agreement’s Emissions and Temperature Goals?”
Resources for the Future (RFF) is an independent, nonprofit research institution in Washington, DC. Its mission is to improve environmental, energy, and natural resource decisions through impartial economic research and policy engagement. RFF is committed to being the most widely trusted source of research insights and policy solutions leading to a healthy environment and a thriving economy.
Unless otherwise stated, the views expressed here are those of the individual authors and may differ from those of other RFF experts, its officers, or its directors. RFF does not take positions on specific legislative proposals.
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