Climate Change and Mental Health: Assessing the Hidden Economic Costs

Abstract

Climate change is increasingly recognised as more than an environmental crisis; it is also a profound public health and economic challenge. While research has widely documented its physical health consequences, the psychological impacts remain underexplored, particularly their economic dimensions. This paper examines the intersection of climate change, mental health, and economic outcomes, presenting the hidden costs that extend beyond immediate physical damage. Evidence from a systematic review reveals that mental disorders linked to climate change contribute to reduced productivity, absenteeism, and presenteeism in the workforce, particularly in climate-sensitive sectors such as agriculture and construction. Furthermore, climate-induced psychological distress exacerbates poverty cycles, increases reliance on social safety nets, and undermines long-term economic stability. The paper argues for the urgent integration of mental health into climate adaptation and economic planning. Policy solutions include strengthening mental health systems, advancing climate-resilient infrastructure, promoting workplace wellness programmes, and enhancing global financing mechanisms. By situating mental health at the centre of climate discourse, this study underscores that protecting psychological well-being is not only a moral imperative but also an economic necessity for building resilient and sustainable societies in the era of climate change.