Failing to limit global warming under 1.5 degree Celsius could cost the world economy tens of trillions of dollars over the next century, Stanford scientists warn.
The UN Paris Agreement commits 195 countries to the goal of holding this century's average temperature to two degrees Celsius above levels in the pre-industrial era.
It also includes an aspirational goal of pursuing an even more stringent target of limiting temperature rise to 1.5 degrees. To date, the economic benefits of achieving these temperature targets have not been well understood.
The three largest economies in the world and almost 90 per cent of the global population benefit economically from limiting global warming to 1.5 degrees instead of two degrees, researchers said.
"Over the past century we have already experienced a one-degree increase in global temperature, so achieving the ambitious targets laid out in the Paris Agreement will not be easy or cheap," said Marshall Burke, assistant professor at Stanford University in the US.
"We need a clear understanding of how much economic benefit we're going to get from meeting these different targets," said Burke, lead author of the study published in the journal Nature.
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The researchers calculated that the overall global benefits of keeping future temperature increases to 1.5 degrees are likely in the tens of trillions of dollars, with substantial likely benefits in the US as well.
They note that these benefits are more than 30 times greater than the most recent estimates of what it will cost to achieve the more ambitious 1.5 degrees goal.
Researchers studied how economic performance over the past half-century correlated with changes in temperature around the world.
Then, using climate model projections of how temperatures could change in the future, they calculated how overall economic output is likely to change as temperatures warm to different levels.
They found a large majority of countries - containing close to 90 per cent of the world's population - benefit economically from limiting global warming to 1.5 degrees instead of two degrees.
This includes the US, China and Japan - the three largest economies in the world. It is also true in some of the world's poorest regions, where even small reductions in future warming generate a notable increase in per capita gross domestic product.
"The countries likely to benefit the most are already relatively hot today," said Burke.
"The historical record tells us that additional warming will be very harmful to these countries' economies, and so even small reductions in future warming could have large benefits for most countries," he said.
The projected costs from higher temperatures come from factors such as increases in spending to deal with extreme events, lower agricultural productivity and worse health, the scientists said.
Previous research has shown that the actual climate commitments each country has made as part of the Paris Agreement add up to close to three degrees of global warming, instead of the 1.5-2 degrees warming goals.
Given this discrepancy, researchers also calculated the economic consequences of countries meeting their individual Paris commitments, but failing to meet the overall global warming goals of 1.5-2 degrees.
They found that failing to achieve the 1.5-2 degrees goals is likely to substantially reduce global economic growth.
"It is clear from our analysis that achieving the more ambitious Paris goals is highly likely to benefit most countries - and the global economy overall - by avoiding more severe economic damages," said Noah Diffenbaugh, professor at Stanford.