Climate-driven health risks may cost USD 1.5 trn to global economy by 2050: WEF

New Delhi, Sep 18 (PTI) Climate-related health risks can cost the global economy at least USD 1.5 trillion (over Rs 131 lakh crore) in lost productivity in the next 25 years due to rising illness and labour shortages across key sectors, a new study showed on Thursday.

The World Economic Forum report, developed in collaboration with Boston Consulting Group, assessed climate-driven health impacts in four of the most affected economic sectors: food and agriculture; the built environment; health and healthcare; and insurance.

The USD 1.5 trillion estimate reflects losses in only the first three sectors, under a mid-range scenario, suggesting the burden on the global economy could be far higher, it said.

The study encourages companies to act now to protect workforce health, build operational resilience and safeguard productivity before the costs of climate adaptation become unmanageable.

The findings highlighted that adapting to extreme heat, infectious diseases and other health risks accelerating due to climate change is now a strategic business imperative.

"We are entering an era in which protecting worker health is proving essential to business continuity and long-term resilience," said Eric White, Head of Climate Resilience, World Economic Forum.

"Every year we delay embedding resilience into business decisions, the risks to human health and productivity climb and the costs of adaptation rise," White added.

Alongside shared disruptions, the analysis also outlined sector-specific vulnerabilities. In food and agriculture, climate health impacts could lead to USD 740 billion in lost output, triggering serious consequences for global food security, according to the WEF, a Geneva-based international organisation for public-private partnership.

In the built environment sector, climate health impacts are projected to result in productivity losses of USD 570 billion.

The health and healthcare sector stands to lose USD 200 billion in productivity due to workforce climate health issues, while rising climate-driven disease rates among the wider population could compound demand pressures. The insurance industry, meanwhile, is projected to experience a sharp rise in climate health claims.

"As temperatures rise, millions of jobs become more dangerous – or disappear entirely – pushing families deeper into poverty and changing where and how people can live and thrive," said Naveen Rao, Vice-President for Health, Rockefeller Foundation, which supported this research.

However, the report also indicated that companies investing early in climate health adaptation can benefit beyond risk mitigation, unlocking new opportunities for innovation and growth while meeting emerging market needs.

Each sector is uniquely positioned to develop and scale solutions to emerging climate health challenges. From climate-resilient crops that protect food systems, heat-stable medications that expand medicine availability, cooling technologies that keep construction workers safe and new insurance models protecting communities against climate health shocks, examples of innovation are already taking shape.

"Momentum on health adaptation is building, but financing and implementation are still far below what's needed," said Elia Tziambazis, Managing Director and Partner, BCG.

The report sourced health data from scientific literature and employment data, and economic cost from the International Labour Organisation and World Bank data.

The report pointed out that a global shift to health resilience must be underpinned by supportive policies, interoperable climate health data systems and innovative financing to mobilise capital.

The findings, published ahead of the World Economic Forum's Sustainable Development Impact Meetings 2025, come as preparations intensify for COP30 in Belem, Brazil.

This year's climate negotiations are set to bring health adaptation to the forefront of the global climate agenda, signalling a unique opportunity to align private sector innovation with policy action. PTI BJ DRR