(file image) Photo: RNZ / Marika Khabazi
Carbon emissions could reduce average incomes by 19 percent across the global economy by 2049, a study suggests.
The report, published in Nature on Thursday, stated this would outweigh the costs associated with limiting warming to 1.5C in accordance with the Paris Climate Agreement by six times.
"Projections of the economic damage of climate change are crucial to the adaptation and planning procedures of both public and private entities. However, models are often limited by the daunting and variable nature of long-term climate outcomes.
"These damages are primarily attributed to temperature variation; however, the authors posit that the consideration of additional climate variables raises estimates by a further 50 percent."
Researchers used local temperature and rainfall data from more than 1600 regions around the world and combined it with climate and income data for the last 40 years to model likely outcomes.
It shows New Zealand's income could be 2-10 percent lower and Australia's income 10-25 percent lower than if there was no climate change, with much of the impacts arising from changes to average temperatures and annual rainfall.
However, the researchers predict countries with the lowest income and lowest historical emissions are predicted to suffer income loss which is 61 percent greater than the higher-income countries and 40 percent greater than higher-emission countries.
"These figures suggest that the world economy is on course to suffer significant damage from human-caused climate change, with the lowest-income countries the most vulnerable to income loss."
Under the Paris Agreement, New Zealand has committed to reduce net greenhouse gas emissions in 2030 by 50 percent below gross emission levels in 2005.
A government report, published last year, estimated the country might have to pay billions to achieve its goal, if it kept up its greenhouse gas emissions and carbon credit prices remained high.
Victoria University of Wellington economics of disasters and climate change chairperson Ilan Noy said the paper showed the transition to sustainable energy sources was less expensive than the cost already New Zealand already 'committed' to bearing by its past greenhouse emissions.
"Overall, however, this kind of modelling approach is not suitable to conclude much about the costs of climate change at the local level for us in Aotearoa. This approach does not account for the local peculiarities of our economic activities (in our case, for example, that the Waikato region is much more exposed to changes in heat and rainfall than Auckland because of its different set of economic activities).
"But, the fact we cannot conclude much from this work about the local impact does not detract from the main message, that we should rapidly converge to a net-zero world.
"After all, the argument for us, and for everyone else around the world, to work toward net zero is not that our actions matter locally, but that it is their global impact that is the reason for the urgency we need to adopt."
The research was funded by the Volkswagen Foundation and the Deutsche Gesellschaft für Internationale Zusammenarbeit on behalf of the Government of the Federal Republic of Germany and Federal Ministry for Economic Cooperation and Development.