Putting a Price on the Impacts of Climate Change in Canada
September 30, 2011
A report released yesterday by the National Round Table on the Environment and the Economy (NRT) estimates that the financial impacts of climate change for Canada could reach billions of dollars by 2020. The report entitled Paying the Price: The Economic Impacts of Climate Change for Canada is the first report to assess the economic consequences of the physical impacts of climate change nationally. It is the fourth report in the NRT’s Climate Prosperity series examining the economic risks and opportunities of climate change in Canada.
The study estimates that costs could reach a staggering $5 billion per year in 2020 and could rise to up to $43 billion annually by 2050.
To highlight the uncertainty at play, the study applied four scenarios using population increases, the pace of economic growth and the severity of climate change to establish a range for the looming crisis’ cost. In the extreme case, a high climate change–rapid growth situation, these costs could be at least $91 billion per year. Under the four scenarios the report goes on to probe specific concerns for Canada including timber supply reductions, coastal flooding, and human health issues for our prosperity, place and people. Prominent findings of the report:
- Timber supplies are predicted to decrease from 1 to 5% in the 2020s to up to 23% in the 2080s, with extreme impacts in western Canada. A possible 0.4% reduction in GDP by the 2050s is predicted.
- Sea-level rise and storm surges will put coastal communities at risk exposing up to 13,000 homes to flooding by 2050 with an overall cost of up to 0.3% of Canada’s GDP annually
- Poorer air quality caused by climate change will lead to increased deaths and illnesses – by 2050 roughly 1% of deaths in Canada will be climate change related
So what should we do to minimize these costly impacts?
The report suggests that adaptation measures such as: forest fire prevention, pest control, planting climate-resilient tree species, prohibiting flood prone areas, abandoning dwellings once flooded and installing pollution control technologies to limit ozone formation will be key to reducing the costs to Canadians over time.
Predictably the report recommends that the Government of Canada invest in more research into the economic effect of climate change on specific regions and sectors to inform public policy and adaptation measures moving forward.
With 2020 less than 10 years away, inaction will be expensive; we will feel the economic burden in our lifetimes. These groundbreaking findings dramatize the need for a range of international, national and local measures to reduce emissions and adapt to prepare Canadians for the effects of climate change.
By ZACL Business Strategy Consultant, Georgia Campbell