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The study “The Macroeconomic Impact of Climate Change: Global vs. Local Temperature” reveals that a 1°C increase in global temperature could reduce world GDP by 12%, much higher than previous estimates of 1-3%. Unlike local temperatures, global temperature rise is strongly linked to extreme weather events, leading to significant economic losses through declines in productivity, investment, and capital. This impact results in a Social Cost of Carbon (SCC) of $1,065 per ton, supporting the economic case for aggressive, unilateral decarbonization policies, especially for large economies like the U.S.
