Climate action impact on GDP: ambitious policies today mean +3% by 2050 and +13% by 2100, says OECD and UNDP report.
An OECD and UNDP report examines the climate action impact on GDP: greater ambition today could mean +3% by 2050 and +13% by 2100.
By 2040, the global economy could grow an additional 0.2% if countries adopt stronger and more ambitious climate policies. Continuing along the current path, however, could cost the world economy up to one-third of its total GDP. This is the key finding of a new joint report by the OECD and UNDP that explores the climate action impact on GDP.
OECD climate scenarios show clear economic benefits
The report delivers a counterpoint to the waning appetite among many countries for bold climate action. The message is clear: accelerating the green transition pays off.
Well-structured climate action doesn’t hinder growth, it fuels it. The authors calculate that adopting ambitious emissions-reduction policies could lead to a net increase in global GDP of 0.2% by 2040.
While this figure may seem modest at first glance, it represents a meaningful contribution to global economic well-being. The numbers go further: the investments required to move toward a more ambitious trajectory could increase per capita GDP by 60% in advanced economies and by 124% in low-income countries by 2050. In practical terms, this transition could lift 175 million people out of extreme poverty.
When factoring in the benefits of mitigation and adaptation, especially in reducing the impact of extreme weather events, projections show that global GDP could rise by 3% by 2050 and by as much as 13% by 2100 compared to the current trajectory.
The cost of inaction: up to one-third of global GDP
The economic risk of inaction is staggering. If left unaddressed, the climate crisis could shrink the global economy by up to a third by the end of the century.
These projections, the OECD and UNDP argue, must be central to the next round of national climate commitments (NDCs) for the 2035 horizon. All countries are expected to submit updated NDCs by COP30, set to take place in Brazil in late 2025.
“The 2025 NDCs are an opportunity to harness the synergies between climate and growth. But to unlock their full potential, they must be ambitious, actionable, and investable—broadening ownership, mobilizing finance, and delivering benefits for economies and people,” the report emphasizes.
