Economic assessment of the damage change on climate: Climate change and game theory

Abstract

Climate change poses a very serious threat not only to the planet's population and biodiversity but also to the global economy, which is causing enormous economic damage. Therefore, the purpose of the article is to analyze and assess the extent of the damage caused to the economy in the context of climate change, using various expert assessments as well as the method of game theory. Combining various expert assessments shows that climate change has a long-term negative impact on global economic growth, labor productivity, and mass migration. The article analyzes several forecasting models. The results show that the planet is dangerously close to a turning point in climate change, and the models' consensus is that they agree that the economic damage from warming to 2°C will be negligible, but a 4°C warming would be disastrous for the economy. Additionally, the issue of achieving global cooperation to reduce greenhouse gas emissions was presented in game theory. The results show that the players did not choose the Nash equilibrium point but decided to what extent they would reduce their emissions.