Global greenhouse gas emissions and Canadian GDP

Highlights

• Our analysis indicates that the 0.9-degree Celsius average increase in surface temperature and 2.5 per cent increase in average precipitation observed for Canada over 1981 to 2021 (relative to 1961-1990 reference levels), have lowered the level of Canadian real GDP in 2021 by 0.8 per cent (or $20 billion in 2021 dollars).

• Under our benchmark global greenhouse gas emissions scenario in which countries across the world fully meet their climate commitments, we estimate that higher temperatures and precipitation will reduce Canada’s real GDP by 5.8 per cent in 2100, compared to a counterfactual scenario where climate variables remain at their average levels observed over 1961 to 1990. For perspective, in 2021, 5.8 per cent of GDP amounts to $145 billion (in 2021 dollars). In 2100, the economy will be substantially larger and therefore the estimated impact in dollar terms would be correspondingly larger.

• We estimate that 2.4 percentage points of the 5.8 per cent impact in 2100 stems from the continuation of recent changes in weather patterns due to climate change while the remaining 3.6-percentage point impact is from future changes to weather patterns.

• If instead global policies remain closer to current settings—and global climate commitments are not met—we estimate that the level of Canadian real GDP in 2100 would be approximately three-quarters of a percentage point lower compared to our benchmark global emissions scenario.

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Communications

Quotes

• Our analysis shows that climate change has—and will continue—to negatively impact the Canadian economy. 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.

• 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.

News Release

{"id":41,"created_at":"2022-11-04T10:55:58-04:00","updated_at":"2022-11-08T09:57:03-05:00","slug":"rising-temperatures-and-precipitation-due-to-climate-change-will-continue-to-negatively-impact-the-canadian-economy-says-pbo-la-hausse-des-temperatures-et-des-precipitations-attribuable-au-changement-climatique-continuera-daffecter-leconomie-canadienne-selon-le-dpb","title_en":"Rising temperatures and precipitation due to climate change will continue to negatively impact the Canadian economy, says PBO","title_fr":"La hausse des temp\u00e9ratures et des pr\u00e9cipitations attribuable au changement climatique continuera d\u2019affecter l\u2019\u00e9conomie canadienne, selon le DPB","body_en":"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.\n\nIn 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. \n\nPBO estimates that rising temperatures and precipitation due to climate change since the early 1980s have reduced Canada\u2019s real GDP by 0.8 per cent in 2021. Continuing changes to weather patterns from past and future emissions are projected to reduce Canada\u2019s 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.\n\n\u201cOur analysis shows that climate change has\u2014and will continue\u2014to negatively impact the Canadian economy,\u201d adds Mr. Giroux. \u201cWe estimate that recent increases in temperature and precipitation combined with future changes in weather patterns will reduce Canada\u2019s real GDP by 5.8 per cent in 2100.\u201d\n\nPBO\u2019s 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.\n\nAccording to Mr. Giroux, \u201cOur 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.\u201d","body_fr":"Le directeur parlementaire du budget (DPB) a publi\u00e9 aujourd\u2019hui son \u00e9valuation de l\u2019incidence \u00e0 long terme sur l\u2019\u00e9conomie canadienne de la modification des tendances m\u00e9t\u00e9orologiques li\u00e9e aux changements climatiques.\n\nDans son rapport Les \u00e9missions mondiales de gaz \u00e0 effet de serre et le PIB canadien, le DPB pr\u00e9sente un sc\u00e9nario climatique de r\u00e9f\u00e9rence pour le Canada fond\u00e9 sur les \u00e9missions mondiales projet\u00e9es par l\u2019Agence internationale de l\u2019\u00e9nergie. \n\nLe DPB estime que la hausse des temp\u00e9ratures et des pr\u00e9cipitations attribuables aux changements climatiques depuis le d\u00e9but des ann\u00e9es 1980 a r\u00e9duit le PIB r\u00e9el canadien de 0,8 % en 2021. Les changements aux tendances m\u00e9t\u00e9orologiques attribuables aux \u00e9missions pass\u00e9es et futures devraient r\u00e9duire le PIB r\u00e9el canadien d\u2019encore 5 % d\u2019ici 2100. Ce pourcentage estim\u00e9 est calcul\u00e9 par rapport \u00e0 un sc\u00e9nario climatique o\u00f9 les variables climatiques restent aux niveaux moyens observ\u00e9s entre 1961 et 1990.\n\n\u00ab Notre analyse d\u00e9montre que les changements climatiques a d\u00e9j\u00e0 eu et continue d\u2019avoir des r\u00e9percussions n\u00e9gatives sur l\u2019\u00e9conomie canadienne, a ajout\u00e9 M. Giroux. Nous estimons que les hausses r\u00e9centes des temp\u00e9ratures et des pr\u00e9cipitations, combin\u00e9es aux changements des tendances m\u00e9t\u00e9orologiques futures, vont r\u00e9duire le PIB r\u00e9el canadien de 5,8 % d\u2019ici 2100. \u00bb\n\nLe sc\u00e9nario climatique de r\u00e9f\u00e9rence du DPB suppose que les pays respectent leurs engagements climatiques, ce qui comprend les cibles de carboneutralit\u00e9 que de nombreux pays se sont fix\u00e9es. En revanche, si les politiques mondiales restent \u00e0 peu pr\u00e8s ce qu\u2019elles sont \u00e0 l\u2019heure actuelle et que les engagements climatiques mondiaux ne sont pas respect\u00e9s, nous estimons que le PIB r\u00e9el canadien en 2100 serait d\u2019au moins trois quarts de point de pourcentage inf\u00e9rieur \u00e0 notre sc\u00e9nario de r\u00e9f\u00e9rence. Cependant, notre calcul ne tient pas compte des augmentations exceptionnelles du nombre d\u2019\u00e9v\u00e9nements climatiques graves qui, selon les mises en garde des scientifiques, se produiront lorsque les temp\u00e9ratures mondiales augmenteront consid\u00e9rablement au-dessus des seuils cl\u00e9s.\n\nSelon M. Giroux, \u00ab Notre sc\u00e9nario climatique de r\u00e9f\u00e9rence part du point de vue que les pays respecteront leurs engagements climatiques. Si les politiques climatiques demeurent pr\u00e8s du statu quo, l\u2019incidence \u00e0 long terme des changements climatiques sur l\u2019\u00e9conomie canadienne sera plus importante. \u00bb","release_date":"2022-11-08T10:00:00-05:00","is_published":"2022-11-08T09:57:03-05:00","internal_id":"COM-2223-041","permalinks":{"en":{"website":"https:\/\/www.pbo-dpb.ca\/en\/blog\/news-releases--communiques-de-presse\/rising-temperatures-and-precipitation-due-to-climate-change-will-continue-to-negatively-impact-the-canadian-economy-says-pbo-la-hausse-des-temperatures-et-des-precipitations-attribuable-au-changement-climatique-continuera-daffecter-leconomie-canadienne-selon-le-dpb"},"fr":{"website":"https:\/\/www.pbo-dpb.ca\/fr\/blog\/news-releases--communiques-de-presse\/rising-temperatures-and-precipitation-due-to-climate-change-will-continue-to-negatively-impact-the-canadian-economy-says-pbo-la-hausse-des-temperatures-et-des-precipitations-attribuable-au-changement-climatique-continuera-daffecter-leconomie-canadienne-selon-le-dpb"}},"pivot":{"publication_id":710,"news_release_id":41}}