  The economic impacts of climate change are highly uncertain. Two of the most
important uncertainties are the sensitivity of the climate system and the
so-called damage functions, which relate climate change to economic damages and
benefits. Despite broad awareness of these uncertainties, it is unclear which
of them is most important, both on the global as well as the regional level.
Here we apply different damage functions to data from climate models with
vastly different climate sensitivities, and find that uncertainty in both
climate sensitivity and economic damage per degree of warming are of similar
importance for the global economic impact. Increasing the climate sensitivity
or the sensitivity of the damage function both increases the economic damages
globally. Yet, at the country-level the effect varies depending on the initial
temperature as well as how much the country warms. Our findings emphasise the
importance of including these uncertainties in estimates of future economic
impacts, as they both are vital for the resulting impacts and thus policy
implications.
