The economic risks of global warming will increase most rapidly for the rich

While it is well established that the world’s poorest are those who suffer the most from the impact of climate change —a view confirmed by the German institute’s researchers—they also found that threats to the consumption of the wealthy will become more amplified over the next two decades in places like the United States and the European Union.

“The risk increases more for the rich, also because it was lower at the beginning, but we know that changes are something that people feel,” said Anders Levermann, one of the authors of the report. This could lead to substantial macroeconomic losses due to generally higher levels of consumption among higher income groups.

Levermann explained that as global warming affects production, goods become more expensive, which hits poor consumers hard, who tend to buy necessities that they cannot avoid or replace. The rich, on the other hand, are affected because everything becomes more expensive and they are bigger consumers and more integrated into global trade networks.

The report also notes that transition economies such as Brazil and China are highly vulnerable to severe impacts from volatile weather conditions and potential trade disruptions. It added that countries with diverse trading partners could be better protected against risks, especially when imports come from regions less affected by climate change. extreme weather events.

While the report highlights that impacts on higher-income consumers may harm the broader global economy, policymakers must continue to pay attention to alleviating the burdens of climate change on the poorest groups. Poverty alleviation to reduce the vulnerability of lower-income groups “must remain a priority, as risk levels remain by far the highest,” the report says.