Climate hit could halve GDP
What happened
Adrien Bilal’s new economic model — winner of the 2026 Best Young Economist Award — estimates unchecked climate change could shrink global GDP by up to 50% by 2100, far above prior forecasts. The projection adds fuel to calls for more ambitious mitigation and for a climate movement that ties emissions policy to job security and inequality. (lemonde.fr) (anarchistfederation.net)
Why it matters
The authors released a revised NBER working paper (No. 32450) in January 2026 that reports a permanent 1°C rise in global mean temperature lowers world GDP “by over 20%” in the long run. (nber.org) (nber.org) An earlier March–May 2024 version of the draft estimated a smaller peak effect — a 1°C rise cutting world GDP by about 12% and implied a present‑value welfare loss near 32% with a Social Cost of Carbon of roughly $772/tCO2. (cowles.yale.edu) (cowles.yale.edu; harvardmagazine.com) Bilal and co‑author Diego R. Känzig base their results on a time‑series “local projection” approach that exploits natural variability in global mean temperature and links it to economic output across 173 countries using weather‑and‑economic records stretching roughly 120 years. (nber.org) (nber.org; news.harvard.edu) In the revised paper the implied Social Cost of Carbon rises into four figures — the NBER abstract reports a SCC in excess of $1,200 per ton — and the authors argue those magnitudes make unilateral decarbonization cost‑effective for large economies such as the United States. (nber.org) (nber.org; siepr.stanford.edu) The study’s methodological pivot — using global rather than country‑level temperature shocks because they correlate more strongly with extreme events — has prompted formal discussion in scholarly fora, including a CEPR/EAERE webinar and a published discussant note by Simon Dietz raising questions about identification and robustness. (siepr.stanford.edu) (siepr.stanford.edu; cepr.org) The prize that highlighted the work, created in 2000 by Le Monde and Le Cercle des économistes, is awarded annually to a French economist under 41 and this year’s jury singled out research that links climate damages to macroeconomic risk and policy debate. (lecercledeseconomistes.fr) (lecercledeseconomistes.fr; lecercledeseconomistes.fr)
Key numbers
- Adrien Bilal’s new economic model — winner of the 2026 Best Young Economist Award — estimates unchecked climate change could shrink global GDP by up to 50% by 2100, far above prior forecasts.
- 32450) in January 2026 that reports a permanent 1°C rise in global mean temperature lowers world GDP “by over 20%” in the long run.
- (nber.org) (nber.org) An earlier March–May 2024 version of the draft estimated a smaller peak effect — a 1°C rise cutting world GDP by about 12% and implied a present‑value welfare loss near 32% with a Social Cost of Carbon of roughly $772/tCO2.
- Känzig base their results on a time‑series “local projection” approach that exploits natural variability in global mean temperature and links it to economic output across 173 countries using weather‑and‑economic records stretching roughly 120 years.
What happens next
- (nber.org) (nber.org) An earlier March–May 2024 version of the draft estimated a smaller peak effect — a 1°C rise cutting world GDP by about 12% and implied a present‑value welfare loss near 32% with a Social Cost of Carbon of roughly $772/tCO2.
Quick answers
What happened in Climate hit could halve GDP?
Adrien Bilal’s new economic model — winner of the 2026 Best Young Economist Award — estimates unchecked climate change could shrink global GDP by up to 50% by 2100, far above prior forecasts. The projection adds fuel to calls for more ambitious mitigation and for a climate movement that ties emissions policy to job security and inequality. (lemonde.fr) (anarchistfederation.net)
Why does Climate hit could halve GDP matter?
The authors released a revised NBER working paper (No. 32450) in January 2026 that reports a permanent 1°C rise in global mean temperature lowers world GDP “by over 20%” in the long run. (nber.org) (nber.org) An earlier March–May 2024 version of the draft estimated a smaller peak effect — a 1°C rise cutting world GDP by about 12% and implied a present‑value welfare loss near 32% with a Social Cost of Carbon of roughly $772/tCO2. (cowles.yale.edu) (cowles.yale.edu; harvardmagazine.com) Bilal and co‑author Diego R. Känzig base their results on a time‑series “local projection” approach that exploits natural variability in global mean temperature and links it to economic output across 173 countries using weather‑and‑economic records stretching roughly 120 years. (nber.org) (nber.org; news.harvard.edu) In the revised paper the implied Social Cost of Carbon rises into four figures — the NBER abstract reports a SCC in excess of $1,200 per ton — and the authors argue those magnitudes make unilateral decarbonization cost‑effective for large economies such as the United States. (nber.org) (nber.org; siepr.stanford.edu) The study’s methodological pivot — using global rather than country‑level temperature shocks because they correlate more strongly with extreme events — has prompted formal discussion in scholarly fora, including a CEPR/EAERE webinar and a published discussant note by Simon Dietz raising questions about identification and robustness. (siepr.stanford.edu) (siepr.stanford.edu; cepr.org) The prize that highlighted the work, created in 2000 by Le Monde and Le Cercle des économistes, is awarded annually to a French economist under 41 and this year’s jury singled out research that links climate damages to macroeconomic risk and policy debate. (lecercledeseconomistes.fr) (lecercledeseconomistes.fr; lecercledeseconomistes.fr)
