“Business as usual” could lead to 13% loss in growth for the Canadian economy.

According to a study published in August by both the National Bureau of Economic Research and by  U.K.’s Cambridge University Institute for New Economic Thinking,      the overall the global economy could shrink by 7% unless the world’s nations meet the Paris Agreement targets for GHG emissions reductions. Long-Term Macroeconomic Effects of Climate Change: A Cross-Country Analysis” analyses data from 174 countries over the years 1960 to 2014 to model changes in output growth related to temperature and precipitation. The result: “Our counterfactual analysis suggests that a persistent increase in average global temperature by 0.04°C per year, in the absence of mitigation policies, reduces world real GDP per capita by 7.22 percent by 2100. On the other hand, abiding by the Paris Agreement, thereby limiting the temperature increase to 0.01°C per annum, reduces the loss substantially to 1.07 percent.”

The effects differ widely across countries. For Canada, the analysis finds that a “business as usual” scenario could result in a 13% loss in growth for the Canadian economy.     A summary for non-economists from the Climate News Network  quotes one of the authors of the study: “The idea that rich, temperate nations are economically immune to climate change, or could even double or triple their wealth as a result, just seems implausible.”

 

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