PIK study: Losers from climate action produce only 6% of global output
An analysis of 169 countries in Nature Sustainability shows 19 fossil-dependent states face losses, while many countries in the Global South would benefit most.
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Phasing out oil, gas and coal is beneficial for the global economy on balance, according to a study by the Potsdam Institute for Climate Impact Research (PIK) published in the journal Nature Sustainability and presented on Oct. 15. The team led by first author Guanna Pan and PIK Director Ottmar Edenhofer assessed four asset categories for 169 countries: revenue losses from falling demand for oil, gas and coal, avoided climate damage, the potential for wind and solar power, and the capacity to store carbon in forests and managed natural land.
The countries fall into five groups. Nineteen fossil-dependent states would face considerable losses; they account for around 6% of global economic output. Three groups of winners together account for about 13%: 51 countries mainly in the Global South that benefit especially from avoided climate damage, 13 countries with large renewable power potential, mostly in Africa, and 17 with high carbon storage capacity. Sixty-nine economies with moderate effects, including the United States, China and the EU, generate about 81%.
The results are based on model calculations for moderate and ambitious climate action scenarios to the middle and end of the century, expressed as a share of discounted cumulative GDP; the press release does not give uncertainty ranges. Gains from renewables and carbon storage are monetary valuations, not realized earnings; resistance from the losing countries is a possible, not an observed, consequence. The authors propose package deals, such as trade or research commitments or compensation payments for hesitant states. Climate policy does not merely devalue assets but revalues the capital stock of economies "anew and sustainably," Edenhofer said.