Economic models have consistently underestimated the impact of global warming on personal wealth, according to a new study indicating that a 4C temperature increase could reduce the average person’s income by 40%—nearly four times higher than some prior estimates.

Conducted by Australian scientists, the study suggests that even if global warming is limited to 2C above pre-industrial levels, per capita GDP worldwide would still decline by 16%, a steeper drop compared to earlier projections of just 1.4%. Current estimates predict global temperatures will rise by 2.1C even if nations meet their climate commitments in both the short and long term.

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For years, economic models known as integrated assessment models (IAMs), which guide government decisions on climate investment have been criticised for failing to incorporate key risks associated with climate change—especially extreme weather events.

The study, published in Environmental Research Letters, modified one of the most widely used economic models by integrating climate change forecasts to assess the broader consequences of extreme weather disruptions on global supply chains.

Last year, a study was published in the journal Nature by researchers at Germany’s Potsdam Institute for Climate Impact Research also stating that Climate change will reduce future global income by about 19% in the next 25 years compared to a fictional world that’s not warming, with the poorest areas and those least responsible for heating the atmosphere taking the biggest monetary hit. By 2100, the financial cost could hit twice what previous studies estimate, it said.

A German government-backed research last year also advocated damage to farming, infrastructure, productivity, and health from climate change will cost an estimated $38 trillion per year by 2050, a figure almost certain to rise as human activity emits more greenhouse gases.