Global economic exposure to climate change amplified by spatially compounding climate extremes

Abstract

Abstract Despite growing evidence that climate extreme events can significantly affect local economies, the implications of cross-regional and planetary-scale dependencies in climate extremes remain inadequately understood. We demonstrate a crucial link between the projected increase in spatially compounding hot, wet, and dry extremes and the amplification of global economic exposure. Based on Earth System Model projections from the 6th phase of the Coupled Model Intercomparison Project, we analyze how planetary-scale and cross-regional dependencies can exacerbate regional disparities in economic exposure. Our findings reveal that regions with lower present-day economic wealth are more likely to face extreme events simultaneously with other areas, amplifying the potential threats to their economic stability. This study highlights the necessity of considering economic exposure to climate extremes beyond local scales, emphasizing the need for assessing cross-regional exposures and understanding the connections between localized exposures and global economic dynamics.