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| 05/30/18

World a lot wealthier keeping warming to 1.5C rather than 2C


The world will be a lot wealthier by the end of this century if the international community manages to keep global warming to 1.5C above pre-industrial temperatures, the Paris Agreement’s aspirational climate change mitigation goal, rather than the formal target of 2C. However, not every country would benefit from this lower temperature. Canada is one of a handful of northern nations that would enjoy greater GDP growth at 2C compared to 1.5C.

These findings appearing in Nature last week, echoing those of a 2017 analysis by the International Monetary Fund, come with a number of caveats that militate against Canadians now being able to cheer on climate change.

The researchers found that if the temperature increase by 2100 is limited to 1.5C, global GDP would likely be roughly three percent higher than it would be at 2C, equivalent to about US$30 trillion, and about 5-10 percent higher than at 3C.

They calculated this by looking at the historical relationship between annual average temperatures and GDP growth per capita from 165 countries from 1960 to 2010, and isolating this relationship from other factors that might influence economic expansion.

In essence, they find that there is a ‘goldilocks’ temperature for GDP: if things get too hot or too cold, both human and agricultural productivity suffer. It turns out that the optimum temperature for GDP growth is 13.1C.

For 71 percent of countries representing 90 percent of the global population, the current temperature is already on the hotter side of this optimum, particularly in developing countries but also some of the world’s largest economies, including the US, China and Japan. So any temperature increases at all push them further away from the goldilocks temperature, with an accompanying negative impact on GDP.

But there are a small number of states that are on the other side of the temperature optimum. This club of countries where the average temperature is too cool are those high-latitude northern lands including Russia, Canada and the Nordic nations. For these states, 2C of warming gets them closer to the temperature optimum than 1.5C.

However, the study is intended not as a guide for individual nations, but to compare how much the global economy stands to gain even compared to the substantial costs of emissions mitigation. They conclude that the higher global GDP from a 1.5 scenario easily dwarfs the costs incurred to limit warming to that temperature, and that this temperature achieves greater reductions in global inequality.

In addition, the study concedes that GDP, which is simply a tallying of the total value of goods and services a country produces over the course of a year, can be a crude measure of progress. A flood actually can count as a boost to GDP because of the increased economic activity resulting from the clean up and reconstruction efforts. But was that flood genuinely an advance for the affected community?

There is also considerable uncertainty around the temperature optimum, largely due to uncertainty in economic parameters.

The researchers add that their analysis does not include so-called tipping point events, where there is a radical change in the Earth system such as large-scale loss of ice sheets and their associated substantial and rapid increase in sea levels.

But perhaps most important, the category of ‘country’ is a highly variable one, given that both tiny Luxembourg and continent-spanning Russia are countries. How this impacts the analysis can be seen most clearly comparing how Canada fares compared to Alaska in the paper. All of Canada appears to do better off under the 2C scenario, but because Alaska is part of the United States, it is described as worse off at that temperature, even though the American state straddles much of the same far north latitudes that Canada’s territories do.

And this then prompts another caveat: Canada also is a continent-straddling nation. While the country may overall be predicted to enjoy an economic benefit, the Canadian Arctic is already experiencing temperature increases well above 2C, and suffering from, amongst other impacts, a thawing of the permafrost, a process that results in buckling of roads and destabilization of buildings. Not all Canadians are equally likely to enjoy the same ‘benefit’ from warming.

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