New climate model suggests UK economic losses could be far larger

Climate damage is looking far larger than standard estimates capture, and in the UK that gap could already be affecting how much governments spend on resilience, insurance and infrastructure. A Nature Climate Change study by James Rising, R. Khurana, S. Dietz, J. Kikstra, T. M. Lenton, M. Linsenmeier, C. Smith and B. Ward estimated that current warming is already causing welfare losses equivalent to 2% of UK GDP, with damages rising to 10% by the end of the century in a baseline case.

The paper argues that the problem is not just temperature. Using an emulation framework that synthesised model outputs and expert elicitations, the authors broke impacts down across 406 local areas in the UK and included spillovers from other regions as well as missing risks that conventional models often leave out. Their abstract said current warming carries a 95% confidence interval of 1% to 4% of GDP, while end-century damages under the baseline scenario reach 10% of GDP, with a 95% interval of 2% to 20%.

The sharpest warning in the study is about what gets missed. The authors said half of expected total damages, and the greatest uncertainty, come from catastrophic and missing risks, including events such as destabilisation of the polar ice caps and rapid sea-level rise. The Grantham Research Institute on Climate Change and the Environment said the same framework implies damages could reach 20% of UK GDP by 2100 if warming reaches 4C, while a strong emissions-cutting path that keeps warming below 2C would reduce losses to 1% to 7% of GDP. The institute also said the central estimate rises to a 15% welfare-adjusted loss when higher human costs are counted.

The paper lands as the UK’s adaptation machinery is being reset. The Climate Change Committee refreshed its adaptation monitoring framework on May 20, 2026, drawing on evidence from the Fourth Climate Change Risk Assessment. The Met Office says that technical report synthesises the most up-to-date evidence on 41 climate risks and two opportunities across the UK, while the Third National Adaptation Programme covers 2023 to 2028 under duties set out in the Climate Change Act 2008.

Outside the academic debate, the economic stakes are already being framed in stark terms. WWF said more than 40% of UK business-critical infrastructure sits in flood-risk areas, extreme heat costs the economy about £1.2 billion a year in lost productivity, and agriculture businesses are losing around £1 billion annually from extreme weather. WWF also said the UK imports about 40% of its food, leaving supply chains exposed to climate shocks overseas. The new study strengthens the case that climate harm is not a single number, and that governments may be pricing national risk well below its real cost.