The Parliamentary Budget Officer (PBO) today released his assessment of the long-term impact on the Canadian economy of changing weather patterns due to climate change.
In his report, Global greenhouse gas emissions and Canadian GDP, the PBO provides a baseline climate scenario for Canada based on global emissions projections by the International Energy Agency.
PBO estimates that rising temperatures and precipitation due to climate change since the early 1980s have reduced Canada’s real GDP by 0.8 per cent in 2021. Continuing changes to weather patterns from past and future emissions are projected to reduce Canada’s real GDP by an additional 5.0 per cent by 2100. This impact is estimated relative to a climate scenario where climate variables remain at their average levels observed over 1961 to 1990.
“Our analysis shows that climate change has—and will continue—to negatively impact the Canadian economy,” adds Mr. Giroux. “We estimate that recent increases in temperature and precipitation combined with future changes in weather patterns will reduce Canada’s real GDP by 5.8 per cent in 2100.”
PBO’s baseline climate scenario is based on countries following through on their climate commitments, which include net-zero targets that numerous countries have set. If global policies remain closer to current settings and those global climate commitments are not met, we estimate that Canadian real GDP in 2100 would be at least three quarters of a percentage point lower than our baseline scenario. However, this estimate does not capture exceptional increases in severe climate events that scientists warn would occur as global temperatures rise significantly above key thresholds.
According to Mr. Giroux, “Our baseline climate scenario is predicated on countries following through on their global climate commitments. If climate polices remain closer to the status quo, the long-term impact of climate change on the Canadian economy will be larger.”