3. Climate Change

Climate change is real and man-made, but one of the more startling findings is that it is expected to have a net positive benefit through mid-century, as shown on the graph above. (A negative cost is a benefit.)

But why would climate change be beneficial? Increased levels of carbon dioxide work as fertilizer, boosting agriculture. This makes up the biggest positive impact at 0.8 percent of global GDP. Moderate warming also avoids more deaths from cold than it incurs additional deaths from heat. Finally, it reduces the demand for heating more than it increases the costs of cooling, totaling about 0.4 percent of GDP.

In total, warming is a net benefit for almost all years between 1900 and 2050. Since 1900, the benefits have increased, reaching a maximum of about 1.5 percent of global GDP in 2025. However, after the year 2070, as temperatures rise, global warming will become a net cost to the world, justifying cost-effective climate action now and in the decades to come.

4. Ecosystems & Biodiversity

Loss of biodiversity in the 20th century probably cost about 1 percent of GDP per year, though some regions of the world have lost much more. The economists involved in this study measured the major biomes in the world—from tundra to tropical forests and deserts—in 1900, 2000, and 2050.

The economists estimated biodiversity in a number of ways. Biomes are beneficial as places for recreation, but they also prove valuable by producing raw materials for use in everything from wood products to traditional medicine, and by storing carbon to help tackle global warming. Going forward to 2050, the economists estimate we will see an annual net benefit of about 0.25 percent of GDP because we’re now cutting less forest and employing better agricultural practices.

5. Education

In order to compare educational attainment across 150 years, the economists looked at the costs of illiteracy. Today, 20 percent of the world population is still illiterate. Yet in 1900 that number was perhaps closer to 70 percent, and the problem cost 12.3 percent of GDP. Today, the loss is closer to 7 percent of GDP. By 2050, it is estimated global illiteracy will fall to only 12 percent, and the cost will have dwindled to just 3.8 percent of GDP.

Education is hugely important, as the skills developed in school lead to higher productivity and thus higher incomes. Compare Pakistan and South Korea, for example. They started with about the same level of education and income in 1950. Today, Koreans have an average of 12 years of education, whereas Pakistanis have not yet reached an average of six years. Korea’s per-capita income has grown 23-fold versus Pakistan’s three-fold growth.

6. Gender Inequality

In 2012, women's lower salaries and exclusion from the workplace cost the global economy 7 percent of GDP, the difference between boom and bust. How did we get that figure? We looked at how much more women could have contributed to GDP if they had worked as much as men and with the same pay. Today, women earn only 60 percent as much as men and make up just 40 percent of the workforce—a significant improvement from 15 percent in 1900, but still a ways off from gender parity. Even by 2050 the gender ratio will not yet be even, and women will still earn 30 percent less than men.