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The Economic Costs Of Climate Change–Swiss Re

June 10, 2021

By Paul Homewood

As promised, my analysis of Swiss Re’s claims about the cost of climate change:




  • New Climate Economics Index stress-tests how climate change will impact 48 countries, representing 90% of world economy, and ranks their overall climate resilience
  • Expected global GDP impact by 2050 under different scenarios compared to a world without climate change:
    -18% if no mitigating actions are taken (3.2°C increase);
    -14% if some mitigating actions are taken (2.6°C increase);
    -11% if further mitigating actions are taken (2°C increase);
    -4% if Paris Agreement targets are met (below 2°C increase)
  • Economies in Asia would be hardest hit, with China at risk of losing nearly 24% of its GDP in a severe scenario, while the world’s biggest economy, the US, stands to lose close to 10%, and Europe almost 11%

Climate change poses the biggest long-term threat to the global economy. If no mitigating action is taken, global temperatures could rise by more than 3°C and the world economy could shrink by 18% in the next 30 years. But the impact can be lessened if decisive action is taken to meet the targets set in the Paris Agreement, Swiss Re Institute’s new Climate Economics Index shows. This will require more than what is pledged today; public and private sectors will play a crucial role in accelerating the transition to net zero.

Swiss Re Institute has conducted a stress test to examine how 48 economies would be impacted by the ongoing effects of climate change under four different temperature increase scenarios. As global warming makes the impact of weather-related natural disasters more severe, it can lead to substantial income and productivity losses over time. For example, rising sea levels result in loss of land that could have otherwise been used productively and heat stress can lead to crop failures. Emerging economies in equatorial regions would be most affected by rising temperatures.


The report offers various scenarios of warming, but even the 1.5C target would, according to Swiss Re, cost 4.2% of GDP:


The impact on poorer countries tends to be higher in percentage terms, but they suggest the cost to the UK would be 2.4%, something £50 billion a year. At 2.6C, this rises to 6.5%. Unsurprisingly the authors conclude that” no action on climate change is not an option” – which was no doubt the purpose of the report in the first place!

But where do their figures come from? For a start, the idea that there could be three degrees of warming by 2050 is utterly absurd.

Secondly it has been generally accepted that a small amount of warming could actually be beneficial.

The costings are inevitably derived from computer modelling (!), which attempts to quantify what the world’s economy would have looked like in a world without climate change. This is frankly silly, as a world without fossil fuels and economic growth generated by them would have been infinitely poorer than now. In any event, these sort of studies that try to guess what the world would be like without warming are worthless, and just a game for fools and charlatans.

It might have helped if they had used real world data to inform their guesses, but they don’t even appear to have done that. They focus on six areas:



It is unquestionable that the warming since the 19thC has been hugely beneficial for agriculture, thanks to longer growing seasons and the ability to cultivate areas previously too cold.

As for lazy assumptions that warmer weather will cut crop yields, it ignores the ability to adapt cultivation practices, such as time of planting, choice of crops and the availability of new, climate resilient strains of seeds.

There is also the implied risk of more extreme weather, such as droughts, heavy rain and storms. But there is no evidence whatsoever that any of this has happened so far.

Human Health

The study seems to ignore the fact that cold kills many more humans than heat. Meanwhile experts in the field have long ago dismissed the notion that malaria and dengue are related to climate change.

The Lancet have been peddling these falsehoods for a long while.

Labour Productivity

This is another favourite of The Lancet. But it ignores the fact that working practices have been changing out of all recognition. Increasingly, workers do not have to toil with their bare hands, as their forefathers did. Technology and mechanisation mean they no longer have to work such long hours, and can therefore take time out to rest at the hottest time of day. (Has Swiss Re never heard of siestas?)

Sea Levels

This is the only area where economic loss might be likely. But the tiny amounts of sea level rise in the last century mean that any further rise by 2050 will be imperceptible.


Talk about scraping the bottom of the barrel!

For years, “experts” have warned that tourists would stop visiting Spain and other countries, because it would be too hot.

But just suppose it really got too hot there in summer. What would people do? Simply visit at cooler times of the year.

Energy Demand

A warmer climate will unquestionably lead to reduced energy demand in the UK and others with a similar climate. But this is not just true of only the temperate latitudes. Countries like India and China, for instance, also need a lot of energy for heating.

There may be increased demand for air conditioning, but the reality is that most people in poorer countries already need but have no access to it.


Coming back to the UK, it is simply absurd to claim that we would be £50 billion better off with the climate of the Little Ice Age, Our agriculture would be severely hit, mortality higher, and energy demand greater.

If the Swiss Re study cannot even get that bit right, why should we trust any of it?

  1. Andrew Harding permalink
    June 10, 2021 3:23 pm

    An increase from 3 molecules of CO2 to 4 in every 10,000 is going to destroy the planet? I don’t think so!

    The Covid Pandemic started in March 2020. This was Spring and Summer in the Northern Hemisphere which has 88% of the world’s population. At the time I was living near Newcastle Airport, I was used to hearing and seeing planes taking off (and presumably landing in the same direction) every 10 minutes from 06:30 to 22:30, 7 days a week.

    This number fell to 3 flights, that I heard and/or saw up to the New Year, this was the same over the whole world. Electricity and gas consumption was reduced in the more populous Northern Hemisphere, because heating and lighting of homes was unchanged, but for factories and businesses which were closed the amount of energy consumed was much less.

    The NOAA regularly update their graph showing atmospheric CO2 rising and the rate was unchanged during lockdown. They have removed the graph from their website, but I have downloaded to my PC, I have tried to copy and paste to NALOPKT, but cannot do so, any help would be gratefully received?

  2. Gerald Ratzer permalink
    June 10, 2021 4:11 pm

    I have written a 100 line Op-Ed piece with seven main links available at
    Net Zero – What are the Costs & Benefits?

    We have a small group in Montreal that is active in trying to get the message out to as many people and politicians as possible.

    In the last month, there is a new paper by Doug Lightfoot – which clearly explains that the Sun, Sun angle, and humidity are the controlling factors of local temperature – while CO2 is at its asymptote and is not going to do much if any more warming. John Buchanan is leading a complaint to the CBC for unbalanced coverage of Climate Change.
    While I have put together the Net Zero argument that rising CO2 will be beneficial, while the cost of reducing it is prohibitive.

    Gerald Ratzer
    Professor Emeritus

    • June 10, 2021 4:26 pm

      Dear Gerald,
      Can I link to that and the other articles?

      David Tallboys

    • Up2snuff permalink
      June 11, 2021 7:52 pm

      Funny thing is – I have friends who constantly trot out the ’97/98% of scientists are agreed that CO2 causes Global Warming’ thing – many of those same scientists suddenly decided it wasn’t just CO2 but also methane that was the cause of Global Warming. Really weird and strange thing is that more recently those same agreeing scientists who were so certain now think it is not just CO2 and methane but also Nitrogen Dioxide or Nitrous Oxide (they cannot make their minds up between those two, nor can Roger Harrabin of the BBC) cause Global Warming.

      Every ten years or so, the scientists who are so agreed on one thing, appear to change their minds.

  3. Harry Passfield permalink
    June 10, 2021 4:26 pm

    Their numbers re GDP look odd – a kind of smell test: If nothing is done to ‘combat climate change’ then GDP will be -18%. Yet, if we plough tens of trillions (of GDP??) into implementing Paris to the letter then GDP will only suffer -4%. Guess I missed something.

  4. Crowcatcher permalink
    June 10, 2021 4:34 pm

    I can remember the BBC R4 science programme many years ago (when they did proper science with a presenter with a science qualification) in which they did an item about a university computer department which had created an economic “model” to predict the UK economy 25 years hence , so the programme presenter challenged them to test their model by running it backwards to the 1930s and see what happens!!!!.
    After this test they refused to tell him the result drawing the conclusion that the model was rubbish – plus ca change…………..

  5. June 10, 2021 4:39 pm

    Are these GDP figures per annum or at the end of 30 years? 2.6% looks very small – most people would probably say it was worth it – about the same as credit insurance. The fact they will have expensive heating lighting food and travel won’t register.

    Talking of insurance – cui bono – who gains/ Swiss Re are an re-insurance company – they have a financial interest in everybody over paying for insurance against things that won’t happen. If I were them I would scare the wits out of people – just think of the children etc .. 🙂

    PS to Paul Homewood and others – please post on papers and magazines to push back at some of this climate alarmism.

    • Harry Passfield permalink
      June 10, 2021 5:17 pm

      David, I’m a prolific correspondent to the DT but they rarely, if ever, publish anti-CC, letters. However, I’ve changed tack: I’ve just had a go about cultural (mis)appropriation:

      When a white man ‘blacks up’ and attempts to speak with a (say) Jamaican patois there is a justifiable outcry, more so if the intention was to deceive or profit from the venture.
      Why then, I wonder, do I and many others have to put up with a ham actor adopting an abysmal Austrian/German accent while pretending to be Albert Einstein selling smart meters? Is this not also cultural (mis)appropriation?

      Not holding my breath…

  6. tom0mason permalink
    June 10, 2021 10:55 pm

    Same old hubris and nonsense from more idiots who believe that if they keep averaging chaotic data they will see the trend. Utter dick’eds! Economic models are even more crap than climate models! Socio-ecomonic models with climate models’ effluvium added to it equals a chaotic circle jerk of nonsense!
    Atmospheric CO2 is not a problem and humans do NOT control it, nature does!
    The climate has many cycles, many interlinked components with many linked feedback systems, with some chaotic aspects and humans do NOT control it, nature does!

    Atmospheric CO2 levels at 415 parts per million (by volume) is no problem. Even 830 parts per million was not a problem when it last occurred and will not be if it occurs again.

  7. bobn permalink
    June 11, 2021 12:27 am

    Paul, i think you are too gentle in your criticisms. The report is utter madeup fantasy gibberish. Its just one long list of assumptions built on ignorance.
    Labour productivity for example. These morons have never poured concrete (try that below zero) or dug frozen ground, or worked with water below zero where frozen pipes stop play, or repaired metal below zero. How much more inefficient when wearing 2 pairs of gloves and multilayers of clothes and then the more frequent pauses to warm up. Those of us who do real work plan many jobs for the warmer weather since they are near impossible in mid winter.
    A report written by children who have never left their air conditioned, centrally heated offices. Swiss Re have just trashed any reputation for good judgement that they might have had.

  8. Phoenix44 permalink
    June 11, 2021 9:11 am

    It’s simply complete nonsense as it appears to take no account of adaptation.

    My bet is that the model also just assumes everywhere is always 3 degrees warmer all the time but that is not what happens.

    Another financial institution that has been leant on by World Bank, IMF etc.

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