A pseudo-scary headline from Global News tells us “Climate change could hit Canada’s GDP by 6% over long term, new report warns”. To which we would add “inability to understand very basic mathematics could hit Canada’s public debate at once” because even if it were plausible that the Parliamentary Budget Officer knows what the weather will be like in 2100, which it’s not, this report isn’t warning us of anything… except that all government policies proposed or implemented in the name of fighting climate change are a terrible idea. The exact opposite of what the news story claimed.
The funny thing, or one of them anyway, is that the PBO says up front that his report is rubbish nobody should believe including journalists. As this reporter did write:
“the report acknowledged the data leaves several open questions, and that ‘not fully captured in our analysis are some complex issues such as adaptation, international economic spillovers, transition within industries and regions, as well as exceptional increases in extreme weather events.’ The projection by the budget watchdog is ‘a means to focus on climate policy, even if uncertainty in a broad range of areas (such as emissions, climate impacts and GDP impacts) makes this analysis highly conditional,’ Giroux noted in the report.”
Yeah. We assumed no adaptation. And quelle surprise, bad things happen in a hundred years. Though if people are too dumb to adapt then we needn’t wait 80 years because bad things will happen every year when winter arrives if we don’t turn on the furnace and put on a coat and snow tires. As for uncertainty as to climate impacts, yes, it could be an issue when costing climate impacts, especially eight decades out. Particularly if emissions and GDP impacts are also uncertain. Better add more toe of frog.
Or brain of hare. Especially if “Already last year, the effects of rising temperatures and precipitation reduced the country’s real GDP by 0.8 per cent, the PBO report said, and warned ‘severe climate events’ are expected by scientists to continue to rise as the climate changes.” Since groups like the IPCC do not actually claim Canada is already suffering an increase in severe climate events, one wonders what else PBO and reporter alike don’t know.
What the reporter didn’t understand is front and centre. When the story leads off “As world leaders gather for a United Nations climate conference, a new report is warning that climate change could cost the Canadian economy billions of dollars over the coming decades” the big problem isn’t that 2100 isn’t “coming decades” in normal language, although it does make you wonder about the person’s math instincts. No, the big issue, which buries those math instincts many fathoms deep, is that the Canadian economy is currently $1.991 trillion dollars, aka one thousand, nine hundred and ninety-one billion dollars.
More or less, and of course the figure is an estimate. But when it’s that big, mere billions of dollars is a rounding error. Even more serious, when someone says climate change will cost us 6% of GDP in 78 years, or more spuriously precisely 5.8%, they don’t mean we will be poorer. They don’t mean GDP in 2100 will be down to $1.875 trillion. They mean it will be veeery slightly smaller than it would otherwise have been, but still far larger than it is today. More precisely, if the economy grows at 2% per year for 78 years it will have grown by 369 percent overall. The PBO warns that it might only grow by 363% instead. Which isn’t scary.
Lots of people don’t get it. Thus an obtuse press release from Canada’s federal NDP said “Liberals continue to prop up big oil and gas CEOs instead of fighting the climate crisis and creating good jobs in our communities/ NDP Environment and Climate Change Critic Laurel Collins made the following statement: ‘Today, a parliamentary report found that the climate crisis will cause the GDP to fall…”. And it’s not just obtuse because the NDP is currently propping up the Liberal parliamentary minority that it claims is doing all this evil stuff. It’s obtuse because they really seem to think it means the economy will be noticeably smaller in the end not just way bigger but not by quite as much.
Now, for some real fear, suppose that panicked by this burst of innumerate vagueness we do some dumb thing like impose a big carbon tax and drive our fossil fuel industry into a coma and that this suite of policy blunders cuts the average growth rate by 5.8%, from 2% to 1.884. Thanks to the magic of compound interest, that approach would mean GDP grows by 345% rather than 382%, which is a 37% difference.
Money might still buy happiness at that level. But in terms of a sensible choice between alternatives, what the PBO is telling us is that even if very punitive climate policies turn out to be less damaging than they look, and even if putting them in place somehow changes global climate even though Canada’s share of man-made GHGs is trivial, the cost of implementing them will massively exceed the cost of doing nothing and taking it on the chin. It being a very soft tap.
“Do not implement climate policies, new report warns”, we say. And “Do not let journalists do math without first passing a basic test.” Even if they seem to have studied math and economics in college. Something clearly went wrong afterward.