Integrated perspective on translating biophysical to economic impacts of climate change

Uncertainty in estimates of the economic impacts of climate change makes it difficult to evaluate the benefits of mitigation. This Perspective reviews methods for determining economic damages from biophysical impacts, highlights critical gaps and suggests priorities moving forward. Estimates of climate change's economic impacts vary widely, depending on the applied methodology. This uncertainty is a barrier for policymakers seeking to quantify the benefits of mitigation. In this Perspective, we provide a comprehensive overview and categorization of the pathways and methods translating biophysical impacts into economic damages. We highlight the open question of the persistence of impacts as well as key methodological gaps, in particular the effect of including inequality and adaptation in the assessments. We discuss the need for intensifying interdisciplinary research, focusing on the uncertainty of econometric estimates of damages as well as identification of the most socioeconomically relevant types of impact. A structured model intercomparison related to economic impacts is noted as a crucial next step.