Editing IPCC:AR6/WGII/Chapter-11 (section)

==== 11.5.2.2 Projected Impacts ====

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The economic long-run impact increases with higher levels of warming ( ''high confidence'' ), but there is a wide range in projections. Conservative estimates for the long-run impacts of a 1°C, 2°C or 3°C global warming (relative to 1986–2005) on Australian GDP are −0.3, −0.6 and −1.1%/year, respectively, while for New Zealand the estimates are −0.1, −0.4 and −0.8%/year respectively ( [[#Kompas--2018|Kompas et al., 2018]] ). More detailed modelling indicates a loss in Australia’s GDP of 6% by 2070 for 3°C global warming, while a 2.6% GDP rise by 2070 is possible for 1.5°C global warming ( [[#Deloitte--2020|Deloitte, 2020]] ). The potential for much more severe effects on GDP is shown in recent estimates, which attempt to account for the increased severity of uncertain effects (e.g., up to 18.5% reduction in Australia’s GDP by mid-century) ( [[#Swiss%20Re--2021|Swiss Re, 2021]] ).

In Australia, the total annual cost of damage due to floods, coastal inundation, forest fires, subsidence and wind (excluding cyclones) is estimated to increase 55% between 2020 and 2100 for RCP8.5 ( [[#Mallon--2019|Mallon et al., 2019]] ). National damage costs and impacts on asset values could be significant (Table 11.13). The macroeconomic shocks induced from climate change, including reduced agricultural yields, damage to property and infrastructure and commodity price increases, could lead to significant market corrections and potential financial instability ( [[#Steffen--2019|Steffen et al., 2019]] ). Under a ‘slow decline’ scenario by 2060 where Australia fails to adequately address climate change and sustainability challenges, GDP is projected to grow at 0.7% less per year and real wages would be 50% lower than under an ‘outlook scenario’ where Australia meets climate change and sustainability challenges ( [[#CSIRO--2019|CSIRO, 2019]] ).

In New Zealand, the value of buildings exposed to coastal inundation could increase by NZD$2.55 billion for every 0.1-m increment in sea level, that is, NZD$25.5 billion for a 1.0-m sea level rise (SLR) ( [[#Paulik--2020|Paulik et al., 2020]] ). Greater understanding is required of the distributional impacts, the rate of change of costs over time and the economic implications of delayed action ( [[#Warner--2020|Warner et al., 2020]] ).

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