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
- The AI revolution is here
The AI revolution is here – how can businesses prepare? By Vanessa Anness, Head of Consultancy, Ricoh Europe The advent of accessible AI tools – such as ChatGPT – has led to a growing number of people experimenting with and adopting these technologies in their… - JPMorgan, Bpifrance to invest $60M in French female-led funds
By Mathieu Rosemain PARIS, Nov 8 (Reuters)–JPMorganJPM.Non Wednesday said it is teaming up with Bpifrance to invest around $60 million in private investment firms led by women in France, where the bank has its biggest European trading and investment banking hub after London. The partnership… - KKR raises $2.8 billion for second global impact fund
SOURCE: REUTERS By Greg Roumeliotis NEW YORK, Nov 5 (Reuters) – Private equity firm KKR & Co Inc KKR.N has completed the raise of its second global impact fund dedicated to investments that advance sustainability and social equity, amassing $2.8 billion. Ken Mehlman and Robert Antablin, the fund’s co-heads, told Reuters in… - CGIUKI Issues Warning To UK Corporate Boards
CGIUKI warns that UK corporate boards need to step up their governance approach to be ready for artificial intelligence The Prime Minister’s announcement yesterday of a new AI Safety Institute to explore the risks of AI developments is a very welcome step forward, as is… - Mastercard forecasts weaker revenue growth on economic slowdown fears
SOURCE: REUTERS Oct 26 (Reuters) – Mastercard MA.N on Thursday forecast a weaker-than-expected growth in net revenue for the fourth quarter, signaling a potential moderation in spending volumes as an uncertain economic environment prompts caution among consumers. Hawkish signals from the U.S. Federal Reserve,…