Climate Change – Quick Cost/Benefit Analysis
PSS-6 First and foremost, Happy belated April Fool’s Day! A fitting time to be writing this post given that we are currently in a Canadian Federal Election (last day, April 28th, 2025) and we (Canada) are in a trade war with the US. There is no shortage of fools on either side of the border and no shortage of fools regardless of political party. This post will focus on the cost/benefit analyses of the Paris Accord and Net Zero. Some might look at Net Zero as a political topic (and in general, it is). So, to be clear any statements made in this post are my opinion and mine alone.
#climatechange #delaythegreen #globalwarming #showusthedata
But the 2025 Canadian Federal election presents a conundrum. Net Zero itself is apolitical, since all the major parties have committed to Net Zero. Their approach to Net Zero does vary significantly, but the underlying principle applies to all the parties. Based on the Federal Government’s own Parliamentary Budget Office (PBO), the potential economic savings (as measured by GDP) are significantly lower than the proposed capital spending required to fight ‘climate change’ (under both the Paris Accord and Net Zero scenarios). Details to follow. But to get a flavour, we, Canada will be spending $9.5 trillion dollars for every 1/100th of a degree Celsius of temperature rise averted based on the Paris Accord scenario. The Net Zero case is a bit higher at $13.0 trillion dollars for every 1/100th of a degree Celsius of temperature rise averted., but that does not include post-2050 costs to keep us at Net Zero. In what economic reality does that make sense? That question is for both sides of the political spectrum!
The detailed discussion starts with the Parliamentary Budget Office’s November 8th, 2022, report, “Global Greenhouse Gas Emissions and Canadian GDP”. The PBO sums up the situation quite succinctly, “While the impact on Canadian GDP is from global GHG emissions, Canada’s own emissions are not large enough to materially impact climate change”. The PBO laid out three scenarios. 1. GDP growth unencumbered by ‘climate change’, 2. GDP growth adjusted for ‘climate change’, and 3. GDP growth with full global compliance with the Paris Accord commitments. Climate change damages would reduce GDP growth by just 6.6% by the year 2102. That means instead of growing our GDP by 378% (assuming a 2%/year growth rate), we would only grow our GDP by 371.4%. The ‘climate change’ cost (Scenario 1 – Scenario 2) in 2102 would be $140 billion dollars. The cumulative 80-year cost would be $3.64 trillion, but just $696 billion discounted at 3%. Sounds like a lot, but we have not yet looked at expenditures (neither magnitude nor timing).
The Paris Accord benefits can be calculated by subtracting Scenario 3 from Scenario 2. Full global compliance to the Paris Accord commitments will reduce Canada’s GDP losses by 0.8% (6.6% to 5.8%). The value of that improvement is just $17.1 billion. The cumulative 80-year improvement is just $0.44 trillion, $85 billion discounted at 3%. A more optimistic case (based on an expenditure increase ($20 to $30 billion/year), and a proportional GDP improvement) would bump the improvement to $0.66 trillion, $127 billion discounted at 3%. Now we can compare those savings to the capital requirements. The Paris Accord cost/benefit analysis will use the higher savings ($0.66 trillion, which may or may not materialize).
So, based on our own government’s PBO, the Paris Accord commitments will only improve our GDP by $0.66 trillion ($127 billion) over 80 years. Unfortunately, we will be spending ±$30 billion/year (±$2.4 trillion ($909 billion discounted at 3%)) to achieve those GDP improvements. The story on climate improvements (i.e.: temperature rise averted) is also dismal. Full Global Paris Accord compliance will only reduce the temperature rise in 2100 by 0.17 °C (using the IPCC science and the implausibly high RCP 8.5 emission scenario, Bjorn Lomborg 2015). Canada’s share based on our 1.5% share of global emissions is just 0.00255 °C. We are being asked to spend $9.5 trillion for each 1/100th of a degree Celsius! That temperature change is unmeasurable, totally negligible, and indistinguishable from natural changes. Pure stupidity! Our Paris Accord spending will be wasting $1.77 trillion ($780 billion discounted at 3%) that could be dedicated to adapting to climate change (warming or more likely, cooling) and/or fixing real problems.
The same evaluation for Net Zero yields similar (but worse) results. Our government’s PBO, set the ‘climate change’ damage to Canada’s GDP at $3.64 trillion ($696 billion) over 80 years. Unfortunately, we will be spending up to ±$208 billion/year until 2050 (±$5.2 trillion ($3.62 trillion discounted at 3%)) to achieve those GDP improvements. Like the Paris Accord scenario, the story on climate improvements (i.e.: temperature rise averted) is also dismal. Full Net Zero compliance will only reduce the temperature rise in 2050 by 0.28 °C (using the IPCC science, unsubstantiated positive water vapour feedback, Lindzen, Happer, van Wijngaarden 2024). Canada’s share based on our 1.5% share of global emissions is just 0.004 °C. With Net Zero, we are being asked to spend $13.1 trillion for each 1/100th of a degree Celsius! That temperature change is unmeasurable, totally negligible, and indistinguishable from natural changes. Again, PURE STUPIDITY! Our Net Zero spending will be wasting $1.56 trillion ($2.92 trillion discounted at 3%) that could be, again dedicated to fixing real problems and/or adapting to climate change (warming or more likely, cooling).
Neither the Paris Accord nor the Net Zero paths make any economic sense. And remember those temperature improvements (too small to be meaningful) are the best possible improvement since the analysis is based on the IPCC science and the unrealistically high emission RCP8.5 scenario used by the IPCC and Canada’s PBO. The IPCC models have been self-acknowledged (by the modelers) to “run way too hot”, meaning CO2’s influence is less than what has been presented here, and the wasted taxpayer money is higher. The Net Zero evaluation does not include any Net Zero maintenance costs post-2050. Those costs will be high and will also add to the waste totals. Note, every dollar spent on the Paris Accord and/or Net Zero initiatives will go directly to debt. Piling on to the already devastating debt we are leaving our children and grandchildren.
To this point, I have limited the discussion to the cost/benefit analysis of the Paris Accord and Net Zero initiatives. Given that the two main parties (Liberal and Progressive Conservatives) in the upcoming Canadian election both support Net Zero, this post has effectively been apolitical. Both parties should be abandoning Net Zero immediately and focusing on our myriad economic issues (high deficits, inflation, oppressive debt levels, supply chain disruptions, declining business investment, excessive regulation, etc.). We cannot afford Net Zero in a good economic environment. How do we afford Net Zero based on our current dismal economic outlook?
Canada needs change and the two main parties are both running on change. Personally, I have serious concerns that the party in control for the last decade (the Liberals with the help of the NDP) can actually initiate the changes required. Historically, Canada (through both Liberal and Conservative governments) has held its own against the US. In 2015 (the year the Trudeau government was elected) that changed dramatically. Both real GDP/capita and Business Investment/capita diverged almost immediately. Both parameters continued to rise in the US while Canada faltered with business investment declining sharply and GDP stagnating. Over the last 10 years, Canada’s GDP/capita total growth was just 0.5%, the US growth was a strong 20.7% (based on the IMF, October 2024). The OECD looked at the member country performances over the 2014 to 2022) period. Canada finished third last (at 0.6%/year) over that period, out of 30 OECD countries. The OECD’s future expectations put Canada in last place at 0.78%/year growth rate. So yes, Canada needs change, but that will not happen with a Liberal Government (unless you consider blowing up Confederation change).
Those GDP results could easily be greatly improved by dumping our excessively expensive, unnecessary Net Zero goals. Will that happen (election or otherwise)? We shall see. The Liberal Party has made some cosmetic changes to their “team”, but the bulk of the participants (both elected and behind the scenes) have not changed. That implies that the same ideologies that drove Canada’s economic policy over the last decade are still there. Unfortunately, ideologies have a strong tendency to resist change. With Justin Trudeau stepping down and Mark Carney’s subsequent selection, the ideology at the Prime Minister’s level has been solidified, not opened up for change. Mark Carney has dedicated a significant portion of his life to Net Zero (including stints as the UN’s Special Envoy on Climate Change and a Foundation Board Member at the WEF). He was also Trudeau’s key economic advisor over the last five years and could have initiated that change. A more in-depth analysis can be found in my OPPS-31 – Political Change in Canada post.
Justin Trudeau and Mark Carney are cut from the same cloth. They are both tied closely to the UN and WEF. The Trudeau Liberal policies have been aligned with the UN and WEF goals to, in my opinion, the detriment of Canada and its citizens. Mark Carney has not abandoned those goals, despite expressing a willingness to change. And despite dropping the Carbon Tax to zero (an obvious political ploy), Carney has not repealed the legislation that implemented the current Carbon Tax regime. On April 29th, 2025, the Carbon Tax can be simply jacked back up to current levels (or higher). He has already indicated that he will not be repealing Bill C-69 (the no pipeline or any other major project bill) and has told Quebec that there will be no pipeline built through their province (despite overwhelming support from Quebec citizens). We do not need a future based on the totalitarian UN/WEF/EU goals. That will be Mark Carney’s legacy were he to be elected as our next Prime Minister.
Net Zero Summary
Spending Trillions to Save Billions!
All Pain, No Gain!
Wasted Trillions with Unmeasurable Climate Impact!
Unimaginably Higher Debt for Our Children and Grandchildren!
Lost Freedoms and Lower Standards of Living!
There is no economic, climatological, or environmental justification for either the Paris Accord commitments or Net Zero (even if we, Canada, could afford to fund them). The US (our largest trading partner) has made the smart, realistic choice to move away from the simplistic, totally unnecessary, unscientific All CO2, All the Time alarmist narrative. We need to do the same. We should and could be one of the richest countries on this planet. But that will not happen under UN/WEF leadership.
OPPS-22 – Parliamentary Budget Office – GDP & Climate Change
OPPS-23 – PBO – Trudeau’s Business Acumen
PSS-4 – Who is Justin Trudeau Listening To?
More discussion and additional detail can be found at the links below (including an interesting dissertation from Jordan Peterson on the Liberal leadership and policy).
Energy & Climate at a Glance – Canadian Edition 2024 – R.J. Davison, H.S. Burnett et al
Global Greenhouse Gas Emissions and Canadian GDP – Parliamentary Budget Office
https://publications.gc.ca/site/eng/9.918002/publication.html
Impact of Current Climate Proposals – Bjorn Lomborg 2015
https://onlinelibrary.wiley.com/doi/full/10.1111/1758-5899.12295
Net Zero Averted Temperature Increase (Lindzen, Happer, Wijngaarden (June 2024)
https://arxiv.org/abs/2406.07392
Canada Must Offer Alberta More Than Trump Could – National Post Article
Jordan Peterson on Mark Carney (10:39 to 13.37)
Energy Transition Investment Trends 2025 – BloombergNEF
Climate Short Stories (CSS)
CSS-53 – CO2’s Moneyball Moment
One Page Political Summary (OPPS)
OPPS-1 – Lies or Incompetence (My first look at Liberal Budgeting)
OPPS-8 – Canadian Deficits – November 2020 Update (Relooking Liberal Budgeting)
OPPS-22 – Parliamentary Budget Office – GDP & Climate Change
OPPS-23 – PBO – Trudeau’s Business Acumen
OPPS-31 – Political Change in Canada
PSS-4 – Who is Justin Trudeau Listening To?
https://climatechangeandmusic.com/who-is-justin-listening-to/
One Page Summary (OPS)
OPS-55 – The State of Climate Science
