Climate change depletes Bangladesh's GDP by 9.4% in 2022

Bangladesh experienced a 9.4% decrease in its total GDP in 2022, with potential fluctuations within a range of 7% to 12%, due to climate change, according to a new study.

The loss resulting from adverse impact of climate change equally affected capital, primarily due to setbacks in human-produced capital, while renewable (natural) capital remained relatively stable, said a press release regarding the study outcome. 

The report published yesterday by the University of Delaware's Gerard J Mangone Climate Change Science and Policy Hub coincides with the start of COP28. 

At the climate summit, countries are expected to adopt a framework for the new UN fund to help nations recover from the "loss and damage" caused by climate change as decided at COP27.

Globally, climate change has led to a population-weighted GDP loss of 6.3% in 2022. The unweighted percentage of global GDP lost is estimated at 1.8%, or about $1.5 trillion, said the report. 

The difference between those two numbers reflects the uneven distribution of impacts, which concentrate in low-income countries and tropical regions that typically have more population and less GDP.

Indeed, least developed countries are exposed to an average population-weighted GDP loss of 8.3%, and Southeast Asia and Southern Africa are particularly affected, with countries losing an average 14.1% and 11.2% of their GDP, respectively.

"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 clarify the challenges that many countries already face today and the support they urgently need to address them," says Dr James Rising, author of the study and assistant professor at the University of Delaware.

As per the report, "Loss and Damage Today: How climate change is impacting output and capital", climate change is also worsening existing global inequalities, with many high-income countries currently experiencing net GDP gains. 

These benefits mostly arise from reduced winter chill, which lowers energy consumption and mortality rates.

Yet as the planet continues to warm, these benefits are poised to erode and eventually turn negative, with the energy and health effects of hotter summers gradually offsetting the benefits from mild winters.

"Our analysis draws on 58 economic models and employs machine learning to produce a best-estimate of the current GDP and capital wealth losses from climate change," says the author.

"The last ten years have seen a revolution in how we understand macroeconomic risks, and this report builds a synthesis of all of their insights," he added.