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Journal Article

New damage curves and multimodel analysis suggest lower optimal temperature


van der Wijst,  Kaj-Ivar
External Organizations;

Bosello,  Francesco
External Organizations;

Dasgupta,  Shouro
External Organizations;

Drouet,  Laurent
External Organizations;

Emmerling,  Johannes
External Organizations;

Hof,  Andries
External Organizations;


Leimbach,  Marian
Potsdam Institute for Climate Impact Research;

Parrado,  Ramiro
External Organizations;


Piontek,  Franziska
Potsdam Institute for Climate Impact Research;

Standardi,  Gabriele
External Organizations;

van Vuuren,  Detlef
External Organizations;

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van der Wijst, K.-I., Bosello, F., Dasgupta, S., Drouet, L., Emmerling, J., Hof, A., Leimbach, M., Parrado, R., Piontek, F., Standardi, G., van Vuuren, D. (2023): New damage curves and multimodel analysis suggest lower optimal temperature. - Nature Climate Change, 13, 434-441.

Cite as: https://publications.pik-potsdam.de/pubman/item/item_28394
Economic analyses of global climate change have been criticized for their poor representation of climate change damages. Here we develop and apply aggregate damage functions in three economic Integrated Assessment Models (IAMs) with different degrees of complexity. The damage functions encompass a wide but still incomplete set of climate change impacts based on physical impact models. We show that with medium estimates for damage functions, global damages are in the range of 10% to 12% of GDP by 2100 in a baseline scenario with 3 °C temperature change, and about 2% in a well-below 2 °C scenario. These damages are much higher than previous estimates in benefit-cost studies, resulting in optimal temperatures below 2 °C with central estimates of damages and discount rates. Moreover, we find a benefit-cost ratio of 1.5 to 3.9, even without considering damages that could not be accounted for, such as biodiversity losses, health and tipping points.