MANCHESTER, England (Reuters) -A rise in global temperatures to almost 3 degrees Celsius (5.4 degrees Fahrenheit) above pre-industrial levels would likely hurt Britain’s economy by much more than previously assumed, the Office for Budget Responsibility projected on Tuesday.
“Taken together, in the 3 degrees central scenario the combined fiscal impacts of climate damage and mitigation could add 74% of GDP to government debt by the early 2070s, relative to our latest long-term projection,” the OBR said in its annual Fiscal Risks and Sustainability Report.
A United Nations report published in October last year said current climate policies would result in global warming of more than 3 degrees Celsius by the end of the century.
While the OBR reduced its estimate for the cost of transitioning to a net zero economy to 21% of economic output, from 30% in 2021, it bumped up its estimates of the hit to output from climate change.
The scenario of an almost 3 degrees increase in global temperatures would reduce the level of GDP by 8% in the early 2070s, the OBR said, compared with a previous estimate of 5%.
It would also increase primary government borrowing – which excludes debt interest payments – by around 2% of GDP, compared with a previous estimate of 1.3%.
(Reporting by Andy Bruce; Editing by William Schomberg and Susan Fenton)
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