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OBR: Global 3C climate warming will hurt UK economy more than predicted

The Office for Budget Responsibility estimated on Tuesday that a rise in global temperature to nearly 3 degrees Celsius (5.4 degree Fahrenheit), above pre-industrial levels, would hurt Britain's economic growth by much more than was previously thought.

In its Fiscal Risks and Sustainability Report, the OBR stated that the combined fiscal impact of climate damage and mitigating it could add up to 74% of the GDP in government debt in early 2070, compared to the latest long-term forecast.

According to a United Nations report released in October of last year, current climate policies will result in global warming exceeding 3 degrees Celsius in the next century.

The OBR has reduced its estimate of the cost to transition to a net-zero economy from 30% to 21% in 2021. However, they have increased their estimates of the impact of climate change on output.

OBR estimates that a scenario with an increase of almost 3 degrees in global temperatures will reduce GDP levels by 8% early in 2070, as opposed to the previous estimate of only 5%.

This would increase the primary government borrowing, which excludes interest payments on debt, by around 2% compared to a previous estimate that was 1.3%. (Reporting and editing by William Schomberg, Susan Fenton, and Andy Bruce)

(source: Reuters)