Paris [France], January 28 (ANI/WAM): Adapting to climate change could lead to a “temporary and moderate economic slowdown” and cost France nearly one percent of its GDP by 2030, according to a report by the French Directorate General of the Treasury.
The report, based on studies conducted by experts at the directorate, analysed the economic impacts associated with the transition to carbon neutrality under various scenarios.
France aims to reduce its greenhouse gas emissions by 50 percent by 2030 compared to 1990 levels, alongside a significant reduction in reliance on fossil fuels during the same period.
Nathalie George, Head of Macroeconomic Policy and European Affairs at the directorate, explained, “A coordinated and orderly transition towards carbon neutrality will entail moderate and temporary economic costs.”
The report highlights a dual economic impact of increased carbon taxes and costs associated with greenhouse gas emissions, whether through taxation, subsidies, or legislation. On the demand side, consumers may face higher prices, reducing purchasing power, while on the supply side, businesses could encounter challenges due to rising production costs.
This dual effect is projected to result in an economic contraction costing France approximately 0.9 per cent of its GDP by 2030, compared to a scenario without additional emission reduction measures.
However, the report expects these economic losses to partially subside starting in 2040, with the impact potentially reducing to around 0.6 percent of GDP by 2050.
To mitigate the effects of climate change, France will require substantial public and private sector investments of up to Euro 110 billion by 2030, the report noted. While future costs will depend heavily on technological developments, the report emphasises that these investments are significantly lower than the potential damages if decisive actions are not taken.
According to the Network for Greening the Financial System, inaction could cost France and the European Union about 6 percent of their GDP by 2050, with the global figure reaching 9 percent.
The report underscores that transitioning to carbon neutrality presents an economic challenge but is a critical necessity to mitigate the long-term impacts of climate change. It stresses that taking well-planned action now can reduce the severity of future damages and pave the way for a more sustainable economy in the coming decades. (ANI/WAM)
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