Editing IPCC:AR6/SR15/Chapter-3 (section)

=== 3.5.3 Regional Economic Benefit Analysis for the 1.5°C versus 2°C Global Goals ===

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This section reviews recent literature that has estimated the economic benefits of constraining global warming to 1.5°C compared to 2°C. The focus here is on evidence pertaining to specific regions, rather than on global aggregated benefits (Section 3.5.2.4). At 2°C of global warming, lower economic growth is projected for many countries than at 1.5C of global warming, with low-income countries projected to experience the greatest losses ( ''low to medium confidence'' ) (M. Burke et al., 2018; Pretis et al., 2018) <sup>[[#fn:r1153|1153]]</sup> . A critical issue for developing countries in particular is that advantages in some sectors are projected to be offset by increasing mitigation costs (Rogelj et al., 2013; M. Burke et al., 2018) <sup>[[#fn:r1154|1154]]</sup> , with food production being a key factor. That is, although restraining the global temperature increase to 2°C is projected to reduce crop losses under climate change relative to higher levels of warming, the associated mitigation costs may increase the risk of hunger in low-income countries ( ''low confidence'' ) (Hasegawa et al., 2016) <sup>[[#fn:r1155|1155]]</sup> . It is ''likely'' that the even more stringent mitigation measures required to restrict global warming to 1.5°C (Rogelj et al., 2013) <sup>[[#fn:r1156|1156]]</sup> will further increase these mitigation costs and impacts. International trade in food might be a key response measure for alleviating hunger in developing countries under 1.5°C and 2°C stabilization scenarios (IFPRI, 2018) <sup>[[#fn:r1157|1157]]</sup> .

Although warming is projected to be the highest in the Northern Hemisphere under 1.5°C or 2°C of global warming, regions in the tropics and Southern Hemisphere subtropics are projected to experience the largest impacts on economic growth ( ''low to medium confidence'' ) (Gallup et al., 1999; M. Burke et al., 2018; Pretis et al., 2018) <sup>[[#fn:r1158|1158]]</sup> . Despite the uncertainties associated with climate change projections and econometrics (e.g., M. Burke et al., 2018) <sup>[[#fn:r1159|1159]]</sup> , it is ''more likely than not'' that there will be large differences in economic growth under 1.5°C and 2°C of global warming for developing versus developed countries (M. Burke et al., 2018; Pretis et al., 2018) <sup>[[#fn:r1160|1160]]</sup> . Statistically significant reductions in gross domestic product (GDP) per capita growth are projected across much of the African continent, Southeast Asia, India, Brazil and Mexico ( ''low to medium confidence'' ). Countries in the western parts of tropical Africa are projected to benefit most from restricting global warming to 1.5°C, as opposed to 2°C, in terms of future economic growth (Pretis et al., 2018) <sup>[[#fn:r1161|1161]]</sup> . An important reason why developed countries in the tropics and subtropics are projected to benefit substantially from restricting global warming to 1.5°C is that present-day temperatures in these regions are above the threshold thought to be optimal for economic production (M. Burke et al., 2015b, 2018) <sup>[[#fn:r1162|1162]]</sup> .

The world’s largest economies are also projected to benefit from restricting warming to 1.5°C as opposed to 2°C ( ''medium confidence'' ), with the likelihood of such benefits being realized estimated at 76%, 85% and 81% for the USA, China and Japan, respectively (M. Burke et al., 2018) <sup>[[#fn:r1163|1163]]</sup> . Two studies focusing only on the USA found that economic damages are projected to be higher by 2100 if warming reaches 2°C than if it is constrained to 1.5°C. Yohe (2017) <sup>[[#fn:r1164|1164]]</sup> found a mean difference of 0.35% GDP (range 0.2–0.65%), while Hsiang et al. (2017) <sup>[[#fn:r1165|1165]]</sup> identified a GDP loss of 1.2% per degree of warming, hence approximately 0.6% for half a degree. Overall, no statistically significant changes in GDP are projected to occur over most of the developed world under 1.5°C of global warming in comparison to present-day conditions, but under 2°C of global warming impacts on GDP are projected to be generally negative ( ''low confidence'' ) (Pretis et al., 2018) <sup>[[#fn:r1166|1166]]</sup> .

A caveat to the analyses of Pretis et al. (2018) <sup>[[#fn:r1167|1167]]</sup> and M. Burke et al. (2018) <sup>[[#fn:r1168|1168]]</sup> is that the effects of sea level rise were not included in the estimations of damages or future economic growth, implying a potential underestimation of the benefits of limiting warming to 1.5°C for the case where significant sea level rise is avoided at 1.5°C but not at 2°C.

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