TORONTO -- The economies of G7 countries, including Canada, will shrink twice as much as they did during the COVID-19 pandemic if they don鈥檛 address climate change, .
The research, conducted by Oxfam and the Swiss Re Institute, showed that the world鈥檚 biggest industrial economies are projected to lose 8.5 per cent of GDP annually, or nearly $5 trillion, by 2050 if their leaders don鈥檛 enact a more ambitious plan to tackle climate change.
According to the findings, the economies of G7 nations 鈥� Canada, the U.K., the U.S., Japan, France, Germany, Italy 鈥� contracted by an average of 4.2 per cent during the pandemic, which resulted in staggering job losses and large stimulus packages.
In a press release, Oxfam said that economies are expected to bounce back from these short-term effects of the pandemic, while the impact from climate change will be seen every year.
Canada, along with the U.S. and the U.K., would lose around 6 to 7 per cent of GDP by 2050 if there is a 2 to 2.6C global temperature increase, and up to 9 per cent of GDP if the temperature rises 3.2C, and they don鈥檛 change their current climate policies, according to the study.
To make these projections, researchers at the Swiss Re Institute modelled how climate change is likely to affect economies through gradual, chronic climate risks such as heat stress, impacts on health, sea level rise, and agricultural productivity.
While all 48 countries examined in the research are expected to see a contraction in their economies, some will be hit far worse than others, Oxfam said.
For example, India is projected to lose 27 per cent from its economy and the Philippines is expected to lose even more at 35 per cent.
On the other hand, Canada, the U.S., and Germany are among the top 10 least vulnerable to climate change because they鈥檙e less exposed to the associated risks and have better resources to cope.
鈥淭hey are all located at higher latitude, suggesting less stress on productivity from rising temperatures. They also have more robust mitigation infrastructure,鈥� the study said.
For low-income countries, however, Oxfam researchers warned the consequences of climate change could be much greater, citing by the World Bank that suggested between 32 million and 132 million more people will face extreme poverty by 2030 because of climate change.
鈥淭he climate crisis is already devastating lives in poorer countries but the world鈥檚 most developed economies are not immune,鈥� Danny Sriskandarajah, CEO of Oxfam Great Britain, said in a press release on Monday.
Further, Sriskandarajah urged the U.K. government to take a leading role in developing a plan to reduce greenhouse gas emissions when the leaders of the G7 countries meet for a summit in Cambridge, U.K. at the end of the week. In addition to hosting the G7 Summit, the U.K. will hold UN climate talks, called COP26, in Glasgow in November.
鈥淭he UK Government has a once-in-a-generation opportunity to lead the world towards a safer, more liveable planet for all of us,鈥� Sriskandarajah said.
鈥淚t should strain every diplomatic sinew to secure the strongest possible outcome at the G7 and COP26, and lead by example by turning promises into action.鈥�
And while G7 governments have already unveiled new climate targets ahead of the COP26 summit, Oxfam said most fall short of what is required to limit global warming to below 1.5C.
鈥淎s some of the world鈥檚 largest historical emitters 鈥時esponsible for a third of all CO2 emissions since 1990鈥� they should be leading by example in this crucial year,鈥� the charitable organization said.
