2019-02 The cost of climate change

The course does not cover climate change (perhaps it should?) so to fill out the gap, here is a recent paper (Long-Term Macroeconomic
Effects of Climate Change: A Cross-Country Analysis) that estimates the effect of climate change on GDP. The paper is very comprehensive, and you would have to read it yourselves to get the full picture (and see what a good economics paper looks like). So here is the basic info.
Figure 1 shows the projected increase in temperature, in degrees Celsius, if 1. nothing is done and 2. under the Paris accord. 
1. If nothing is done by 2100 the temperature will increase by 4 degrees Celsius.
2. The Paris accord, if successful, limits the temperature increase to one degree Celsius.

The rise in temperature, of course, differs across countries. We will not do too well: the temperature increase in Canada is in the top 20 out of 174 countries

So what is the effect? If nothing is done, in 2100, because of global warming, the world GDP will be 7% lower; with Paris accord, it would be only 1% lower.

Canada is a northern country, so maybe you expect to have beachy holidays in Iqualut, or go to the beach on Lake Ontario during the winter break. But, actually, global warming will have a particularly big impact on Canada. if nothing is done, our GDP will be 13% lower. This is the fourth biggest reduction among the 174 countries (after Bhutan, Montenegro and Kazakhstan).

If the Paris accord holds, Canadian GDP would be only 1.7% lower. This is a gain of 11.4% of GDP: the highest of the 174 countries in the study. We actually benefit the most from keeping global warming to 1 degree.