Taking no action on climate change will cost economies a mean $5.4 trillion a year by 2070 and $31 trillion by 2200.
Non-profit organization the CDP and University College London modeled the damage costs of different levels of action on climate change, finding that global GDP would also take a 25% hit by 2100 if no action is taken. The findings were published in a report Monday.
The "reference scenario," under which no action is taken, implies a temperature rise of 4.4 degrees Celsius by the end of this century.
However, under a 2 degrees Celsius scenario, which is aligned with the Paris Agreement on climate change, a global pact made in 2015, damage costs peak at $1.8 trillion a year by 2070, before stabilizing.
"The impact of climate change on GDP varies significantly between regions, with developing economies such as India suffering the most," Carole Ferguson, head of investor research at CDP, said in a news release accompanying the report.
"Given the potential scale of damage costs and the implications for disruption in the global system, economic actors cannot just wait for the right regulatory policies to be put into place," Ms. Ferguson said. "Policymakers, corporates and the financial system, which will be impacted, should be proactive in investing in mitigation and adaptation to avoid these high damage costs."