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Warming Cuts GDP Up to 40%; Insurers Exit Markets

5/28/2026

45 9 Full Breakdown

Summary

Story summary

NBER's 2024 paper finds each 1°C warming cuts GDP by over 20% long term.
MIT researchers say adding supply-chain effects raises 3°C warming loss estimates to 5%.
A 2025 Nature Climate Change study shows weather interactions lift GDP loss projections to nearly 40% from about 11%.
A January 2026 Stockholm Environment Institute report says catastrophe losses rose 5%–7% per year over decade, prompting insurers to raise premiums and exit markets.

History

Historical Context

The IPCC’s Fourth Assessment Report, released in 2007, warned that unchecked warming would cause significant economic impacts, citing a likely temperature rise of 1.8 °C under the low-emissions B1 scenario. Building on that warning, the European Union and insurers are now revising climate-risk frameworks, echoing the post-2007 push for stronger mitigation policies.

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Story summary

NBER's 2024 paper finds each 1°C warming cuts GDP by over 20% long term.
MIT researchers say adding supply-chain effects raises 3°C warming loss estimates to 5%.
A 2025 Nature Climate Change study shows weather interactions lift GDP loss projections to nearly 40% from about 11%.
A January 2026 Stockholm Environment Institute report says catastrophe losses rose 5%–7% per year over decade, prompting insurers to raise premiums and exit markets.

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