Signal Climate models may understate Korea's nonlinear losses

Summary

The KDI report cites a 2021 CMCC model estimating that, under a high-carbon scenario, climate damage could reduce Korea's GDP by 3.73% by 2050. The report argues that this figure should be read as close to a lower bound. The model does not capture the cascading effects that follow when climate tipping points are crossed. Because damage grows sharply and irreversibly after thresholds are passed, rather than rising in proportion to temperature, standard macroeconomic models tend to underestimate it structurally. The implication is that Korea's real exposure to climate losses may be considerably larger than headline projections suggest.