Traditionally, estimates of how climate change will affect global economies have focused on the effects of annual temperature changes. However, the additional impacts of variability and extremes in rainfall and temperature have remained largely unexplored, until now.
Global warming of 3ºC also increases the risk of extreme rainfall worldwide, which reduces global GDP, on average, by 0.2 percent -- which, at the current size of the global economy, would equal US$ 200 billion. Much of these costs occur in the US and in China, which, unlike warmer tropical regions, are less used to extreme rainfall. However, among the extreme events considered, heatwaves are the most impactful.