By treating climate action and economic growth as if they belong on opposite ends of a scale, policymakers risk missing the bigger — and far more expensive — picture. As highlighted in a new Bloomberg analysis, three studies released this week reinforce a reality that’s becoming harder to ignore: unchecked global heating is already dragging down the world economy, and the bill is rising fast. At today’s pace, climate impacts are set to shave 2.9% off global GDP by 2050 — more than $3 trillion a year in lost output. Productivity declines, crop failures and intensifying disasters are driving those costs, and they’re accelerating. A world on track for 3.1°C of warming will hit every region differently, but the pattern is clear. In the US, the economic hit would reach 2.1% by mid-century. With a faster shift away from fossil fuels, that damage could be nearly cut in half. For China, the difference is even sharper, with a 3.1% economic loss shrinking by roughly 50% under a quicker transition.

The financial system is already feeling the tremors. Researchers at MSCI examined the portfolios of 18 major global money managers overseeing a combined $4 trillion. Over half of their listed-stock holdings are exposed to extreme weather risks, covering about a quarter of total assets. Natural disasters caused $318 billion in global damage last year — but the bulk of the economic pain wasn’t the broken infrastructure. It came from shutdowns, worker disruptions and supply-chain failures. In the next year alone, these operational breakdowns are projected to cost companies in the study $1 trillion. Markets seem to know what’s coming. Firms hit by tropical cyclones between 2022 and 2024 underperformed the wider market starting five days before storms made landfall and continued lagging for 30 trading days afterward.

Geography is no safe harbor. Roughly half of the business activity tied to companies in the study takes place outside their home country, meaning a company headquartered in a seemingly insulated city can still suffer from a disaster thousands of miles away. Most of the companies reviewed faced at least two types of climate hazards; two-thirds faced three or more. As temperatures rise, disasters are stacking — heat following hurricanes, drought amplifying wildfire seasons — creating risks that overlap and compound. A separate analysis this week by First Street found that 52% of the world’s GDP is generated in cities with relatively high climate risk, from Miami to Sydney. Many of these cities remain economically strong enough to offset their losses, but others, including Amsterdam and New Orleans, are already watching businesses and residents leave. Without major investment in adaptation, productivity losses in vulnerable cities could swell to $2.5 trillion a year by 2100.

If there’s a silver lining, it’s that resilience pays. Strengthening infrastructure, homes and communities can reduce the economic shock of disasters. But avoiding future damage pays even more. Many of the highest-risk regions are also the least capable of financing adaptation on their own. That gap widens the longer the world delays action. The new research echoes previous findings: climate disasters have cost the US economy $6.6 trillion over the past 12 years — double the economic blow of the Great Depression — and each degree of additional warming carries increasingly steep economic penalties. A recent NBER study attributed $244 billion in annual US losses to wildfire smoke alone.