Research has been the foundation of climate related decision-making globally, but ‘substantial issues’ have been identified

by Ishika Mookerjee and Alastair Marsh

A widely-referenced study that calculated the impacts of climate change on the global economy has been retracted after criticism from peers.

Scientists from the Potsdam Institute for Climate Impact Research took down the paper — published in April 2024 in Nature — citing “substantial” issues.

The authors initially reviewed and amended the study in August this year after an article published in the same journal said its findings were exaggerated. But the amendments, which indicated a smaller economic impact than first suggested, were ultimately judged to be too fundamental to be addressed through a simple correction. What’s more, the corrected paper showed that the conclusions were prone to greater uncertainty than first indicated.

The original paper was cited by the World Bank and the Organisation for Economic Co-operation and Development, among others, and served as a foundation for climate scenarios used by policymakers across the globe. 

The decision to retract the paper will also have repercussions for the Network for Greening the Financial System, an influential global coalition of central banks and financial supervisors. When NGFS last year updated its scenarios for modeling the economic toll of climate risks, it used the Potsdam research for its new so-called damage function on which estimated economic impacts are based.

In an emailed comment, NGFS said the group had added a disclaimer to its website after the August correction noting that the Potsdam paper had been the subject of criticism. 

“NGFS scenarios are not forecasts, but are accessible tools intended to illustrate plausible pathways,” the group said. Users “should be aware of the ongoing uncertainty and academic debate” associated with the so-called damage function on which economic loss scenarios are based, it said.

The NGFS has around 150 members across close to 90 countries, including the People’s Bank of China, the European Central Bank and the Bank of England. Until earlier this year, the Federal Reserve was also part of the coalition.

Maximilian Kotz, lead author of the Potsdam paper, said the need to retract the study was regrettable but also noted in an interview that there’s still data pointing to “very substantial impacts of climate change on the economy.” Such data justify a “quite ambitious climate policy,” he said.

The Details:

The authors retracted the paper because the results were “found to be sensitive to the removal of one country, Uzbekistan, where inaccuracies were noted in the underlying economic data in the period 1995-1999,” Nature wrote in its explanation. “Furthermore, spatial auto-correlation was argued to be relevant for the uncertainty ranges.”

The corrected version then “led to discrepancies in the estimates for climate damages by mid-century with an increased uncertainty range (from 11-29% to 6-31%) and a lower probability of damages diverging across emission scenarios by 2050 (from 99% to 90%),” Nature said. 

The authors acknowledge that these changes “are too substantial for a correction,” leading to the retraction of the paper, Nature said. They intend to submit a revised version of the paper for peer review, it said. 

Leonie Wenz, a co-author of the now-retracted paper, said “there are more and more studies using different data and different methodological approaches that actually find pretty high economic damages and a very strong case for climate change mitigation.”

Kotz added that it’s still “important to remember what the broader field looks like already.” Other published studies aren’t arriving at “wildly different conclusions,” he said.

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