Will climate change cut business growth?
The effects of climate change since 2000 will slow economic growth slightly over the next 30 years.. ...
In a new research paper, the Congressional Budget Office (CBO) studied both positive and negative contributions to gross domestic product, from longer growing seasons in colder climates to drought to damage to factories from more intense storms.
The nonpartisan budget referee agency have also recently stated that “the effects of climate change since 2000 will slow U.S. economic growth slightly over the next 30 years, adding another drag on an economy that will struggle to rebound from the coronavirus pandemic”.
It is projected that on net, climate change will reduce real U.S. GDP by an average of 0.03% annually from 2020 to 2050, in comparison to what U.S. growth would have been if global climate conditions remained the same as they were in 2000.
That reduction in the growth rate, accumulated over 30 years, lowers the CBO’s projected level of real GDP output in 2050 by 1%, the finding showed.
The paper was incorporated into the CBO’s long-term budget outlook released on Monday, which projected that U.S. federal government debt now is expected to reach nearly double the country’s GDP output in 2050 as interest costs from increased borrowing run annual budget deficits higher.
CBO researchers said that some aspects of climate change are incorporated quickly and directly, while others are more indirect and could take longer to manifest themselves. For example, extreme heat that lowers a farmer’s crop yield would immediately reduce that farmer’s contribution to GDP. A farmer in a cold-weather location might experience a longer growing season, increasing contributions to GDP.
A hurricane that destroys $50 million worth of factory equipment would affect GDP in several ways, including reduced production immediately, and money spent to replace the equipment. However, the overall capital stock would be smaller in the future, as a result of foregone investments to pay for the replacement costs, leading to less GDP output in the future, the CBO said.
The CBO said the research comes with a high degree of uncertainty and the projections represent the middle of a range of outcomes.
Reported by David Lawder
Sourced Reuters
For more Business & Leadership news follow i-invest Online
- Magic your team’s performance
Through a coaching culture that brings together the present and future, your team’s goals will come sharply into focus, says Rosie Nice As we emerge into a post-Covid world, the cultures of our organisations matter more than ever. Individuals are increasingly making career decisions based on… - Normalising disruption in a world of chaos
Brands and marketers must invest in real-time information and make decisions based on what works for consumers now, not what worked months or years ago, says Ben Leet, CEO at Delineate The last three years have been defined by change. From the Covid-19 pandemic to the revolving… - UK ranks second in G7 economies for economic impact of entrepreneurship
The beta launch of the Shopify Entrepreneurship Index shows that British entrepreneurs generated over £28 billion worth of business activity in 2022. According to the index, entrepreneurs on Shopify in the UK grew their exports by 8% in the last year – valued at over… - How businesses can futureproof their AI strategies
Getting ahead of the UK Government’s AI whitepaper On the 29th March 2023, the UK Government released its plans to balance AI risks with innovation, taking its first step to harnessing the true potential of the technology. The AI regulation whitepaper follows growing concerns around the… - The trading partner you can trust
Whether you’re just starting out, or moving to the next level, award-winning broker FairMarkets provides a safe, fair, and transparent trading environment Offering a whole range of products available across the biggest financial markets, including CFDs on forex, commodities, indices, stocks, and cryptocurrencies, FairMarkets International…