Economy
What happened in the economy in 2020 – Yahoo Canada Finance
Bloomberg
Stocks Fluctuate Near Record Highs; Dollar Slumps: Markets Wrap
(Bloomberg) — U.S. stocks churned near record highs as traders weighed optimism that government aid will bolster economic growth with concerns about how fast vaccines can be distributed. The dollar slumped with Treasuries.Health companies were among the best performers on the S&P 500 Index, which fluctuated after closing at a record high to start the week in the wake of a Covid-19 relief package. Gyrations in megacap stocks set the market’s direction in thin trading. A gauge of global equities touched an all-time high as the U.S. House backed President Donald Trump’s proposal to boost aid checks for individuals to $2,000 from $600, even though the effort is likely to fail in the Senate.In Europe, the Stoxx 600 rose as the FTSE 100 Index climbed about 2% in the first session since the U.K.’s Christmas Eve trade deal with the European Union. Uncertainty about what accord will be struck on financial services weighed on Lloyds Banking Group Plc, NatWest Group Plc and Barclays Plc.Elsewhere, crude oil rose as support from a weakening dollar helped offset a worsening short-term demand outlook. The pound recouped some of Monday’s decline.Investors are striking an upbeat attitude as 2020 comes to a close, with risk assets such as stocks, corporate bonds and Bitcoin near record highs even as the pandemic drags on and the pace of U.S. vaccine distribution comes under criticism. The S&P 500 is set to end the year more than 15% higher, with the Nasdaq Composite’s gains exceeding 40%.“Strong markets finish strong,” Tom Lee, co-founder and head of research at Fundstrat Global Advisors, wrote in a note. “We see positive risk/reward for equities into YE and with strong follow through continuing through much of” next year’s first quarter.On the coronavirus front, more restrictions are being imposed to fight the spread of the new, more infectious strain. Covid-19 hospitalizations in the U.S. reached new highs, while Southern California plans to extend a regional stay-at-home order. South Korea’s daily toll of fatalities rose to a record, while Thailand reported its first virus death since November.Here are some key events coming up:U.S. pending home sales and goods trade balance data are due Wednesday.U.S. initial jobless claims figures are published Thursday.Most global stock markets are closed Friday for New Year’s Day.These are the main moves in markets:StocksThe S&P 500 Index climbed 0.1% as of 10:55 a.m. New York time.The Stoxx Europe 600 Index gained 0.8%.The MSCI Asia Pacific Index jumped 1.4%.The MSCI Emerging Market Index increased 1%.CurrenciesThe Bloomberg Dollar Spot Index sank 0.4%.The euro increased 0.3% to $1.2256.The British pound gained 0.3% to $1.3492.The Japanese yen strengthened 0.3% to 103.55 per dollar.BondsThe yield on 10-year Treasuries rose one basis point to 0.93%.Germany’s 10-year yield dipped less than one basis point to -0.58%.Britain’s 10-year yield fell four basis points to 0.21%.CommoditiesWest Texas Intermediate crude gained 1.1% to $48.13 a barrel.Gold strengthened 0.3% to $1,879.90 an ounce.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Economy
Climate Change Will Cost Global Economy $38 Trillion Every Year Within 25 Years, Scientists Warn – Forbes
Topline
Climate change is on track to cost the global economy $38 trillion a year in damages within the next 25 years, researchers warned on Wednesday, a baseline that underscores the mounting economic costs of climate change and continued inaction as nations bicker over who will pick up the tab.
Key Facts
Damages from climate change will set the global economy back an estimated $38 trillion a year by 2049, with a likely range of between $19 trillion and $59 trillion, warned a trio of researchers from Potsdam and Berlin in Germany in a peer reviewed study published in the journal Nature.
To obtain the figure, researchers analyzed data on how climate change impacted the economy in more than 1,600 regions around the world over the past 40 years, using this to build a model to project future damages compared to a baseline world economy where there are no damages from human-driven climate change.
The model primarily considers the climate damages stemming from changes in temperature and rainfall, the researchers said, with first author Maximilian Kotz, a researcher at the Potsdam Institute for Climate Impact Research, noting these can impact numerous areas relevant to economic growth like “agricultural yields, labor productivity or infrastructure.”
Importantly, as the model only factored in data from previous emissions, these costs can be considered something of a floor and the researchers noted the world economy is already “committed to an income reduction of 19% within the next 26 years,” regardless of what society now does to address the climate crisis.
Global costs are likely to rise even further once other costly extremes like weather disasters, storms and wildfires that are exacerbated by climate change are considered, Kotz said.
The researchers said their findings underscore the need for swift and drastic action to mitigate climate change and avoid even higher costs in the future, stressing that a failure to adapt could lead to average global economic losses as high as 60% by 2100.
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How Do The Costs Of Inaction Compare To Taking Action?
Cost is a major sticking point when it comes to concrete action on climate change and money has become a key lever in making climate a “culture war” issue. The costs and logistics involved in transitioning towards a greener, more sustainable economy and moving to net zero are immense and there are significant vested interests such as the fossil fuel industry, which is keen to retain as much of the profitable status quo for as long as possible. The researchers acknowledged the sizable costs of adapting to climate change but said inaction comes with a cost as well. The damages estimated already dwarf the costs associated with the money needed to keep climate change in line with the limits set out in the 2015 Paris Climate Agreement, the researchers said, referencing the globally agreed upon goalpost set to minimize damage and slash emissions. The $38 trillion estimate for damages is already six times the $6 trillion thought needed to meet that threshold, the researchers said.
Crucial Quote
“We find damages almost everywhere, but countries in the tropics will suffer the most because they are already warmer,” said study author Anders Levermann. The researcher, also of the Potsdam Institute, explained there is a “considerable inequity of climate impacts” around the world and that “further temperature increases will therefore be most harmful” in tropical countries. “The countries least responsible for climate change” are expected to suffer greater losses, Levermann added, and they are “also the ones with the least resources to adapt to its impacts.”
What To Watch For
The fundamental inequality over who is impacted most by climate change and who has benefited most from the polluting practices responsible for the climate crisis—who also have more resources to mitigate future damages—has become one of the most difficult political sticking points when it comes to negotiating global action to reduce emissions. Less affluent countries bearing the brunt of climate change argue wealthy nations like the U.S. and Western Europe have already reaped the benefits from fossil fuels and should pay more to cover the losses and damages poorer countries face, as well as to help them with the costs of adapting to greener sources of energy. Other countries, notably big polluters India and China, stymie negotiations by arguing they should have longer to wean themselves off of fossil fuels as their emissions actually pale in comparison to those of more developed countries when considered in historical context and on a per capita basis. Climate financing is expected to be key to upcoming negotiations at the United Nations’s next climate summit in November. The COP29 summit will be held in Baku, the capital city of oil-rich Azerbaijan.
Further Reading
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Growth in gross domestic product (GDP), the total value of all goods and services produced in the economy annually, is one of the most frequently cited indicators of economic performance. To assess Canadian living standards and the current health of the economy, journalists, politicians and analysts often compare Canada’s GDP growth to growth in other countries or in Canada’s past. But GDP is misleading as a measure of living standards when population growth rates vary greatly across countries or over time.
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Federal Finance Minister Chrystia Freeland recently boasted that Canada had experienced the “strongest economic growth in the G7” in 2022. In this she echoes then-prime minister Stephen Harper, who said in 2015 that Canada’s GDP growth was “head and shoulders above all our G7 partners over the long term.”
Article content
Unfortunately, such statements do more to obscure public understanding of Canada’s economic performance than enlighten it. Lately, our aggregate GDP growth has been driven primarily by population and labour force growth, not productivity improvements. It is not mainly the result of Canadians becoming better at producing goods and services and thus generating more real income for their families. Instead, it is a result of there simply being more people working. That increases the total amount of goods and services produced but doesn’t translate into increased living standards.
Let’s look at the numbers. From 2000 to 2023 Canada’s annual average growth in real (i.e., inflation-adjusted) GDP growth was the second highest in the G7 at 1.8 per cent, just behind the United States at 1.9 per cent. That sounds good — until you adjust for population. Then a completely different story emerges.
Article content
Over the same period, the growth rate of Canada’s real per person GDP (0.7 per cent) was meaningfully worse than the G7 average (1.0 per cent). The gap with the U.S. (1.2 per cent) was even larger. Only Italy performed worse than Canada.
Why the inversion of results from good to bad? Because Canada has had by far the fastest population growth rate in the G7, an average of 1.1 per cent per year — more than twice the 0.5 per cent experienced in the G7 as a whole. In aggregate, Canada’s population increased by 29.8 per cent during this period, compared to just 11.5 per cent in the entire G7.
Starting in 2016, sharply higher rates of immigration have led to a pronounced increase in Canada’s population growth. This increase has obscured historically weak economic growth per person over the same period. From 2015 to 2023, under the Trudeau government, real per person economic growth averaged just 0.3 per cent. That compares with 0.8 per cent annually under Brian Mulroney, 2.4 per cent under Jean Chrétien and 2.0 per cent under Paul Martin.
Recommended from Editorial
Canada is neither leading the G7 nor doing well in historical terms when it comes to economic growth measures that make simple adjustments for our rapidly growing population. In reality, we’ve become a growth laggard and our living standards have largely stagnated for the better part of a decade.
Ben Eisen, Milagros Palacios and Lawrence Schembri are analysts at the Fraser Institute.
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