Climate change will take a big bite out of Canada’s economy if measures aren’t taken to reduce emissions and adapt to the changing weather, according to a new report.
On Sept. 28 the Canadian Climate Institute released the report, Reducing the Costs of Climate Impacts in Canada, and Ryan Ness, the director of adaptation research for the institute, said if nothing is done to slow down the impact of climate change on the economy, there will be less growth in the national GDP.
The institute ran two scenarios as part of the study, with models starting in 2015. One scenario saw the climate continue to change with weather events, while heat waves and infrastructure damage gets worse; and a second scenario saw the weather stay the same as the 2015 conditions.
In the first scenario, results were calculated starting in 2025.
“In that 10 years of climate-change impact, we were already at a point where we [would] have 25 billion less GDP every year that we would have otherwise had if climate change hadn't continued,” Ness said
Household incomes were impacted, too, Ness said, with $800 less, annually, per household compared to if climate impacts had stopped in 2015.
“We're just validating the pain that we're all already feeling,” Ness said.
The impact of climate change has already started to happen, Ness said.
As the years go on, it will cost $78 billion and $101 billion annually by 2050 for each a low-emissions and high-emissions scenario, respectively. It will cost $391 billion and $865 billion annually, respectively, by the end of the century.
In addition to slowing GDP growth, climate impacts will cause significant job losses, as heat-induced productivity losses and premature deaths shrink the workforce, the report read.
Job losses could double to 500,000 by mid-century and hit 2.9 million by the end of the century, which will see impacts ripple through the economy by reducing productivity and raising prices.
Overall, the impacts will make life less affordable by reducing income and increasing expenses, the report said.
“It is low-income people that are getting hit the hardest,” Ness said.
“Usually, the people that get hurt the most from extreme weather are those who are lower income because they just have fewer resources to be able to protect themselves.”
The rising cost of living will make it more difficult for low-income people to get by, with the costs of food, rent, insurance, electricity, and gas set to increase drastically. Those expenses are a larger portion of low-income households, Ness said.
There will also be direct costs of climate change, including fixing and rebuilding after a disaster, as well as the impacts to the country’s inter-connectedness.
Big storms may wash out roads or make it difficult to move goods across the country after infrastructure damage, Ness said.
“When the phones and Internet don't work, you know, business can't run. All these impacts, big and small, caused by a more volatile and harsher climate under climate change add up,” Ness said.
But the good news, Ness said, is adapting to climate can save a lot of money in the long run. For every dollar spent on proactive adaptation, you get $15 back.
The Federation of Canadian Municipalities did a preliminary estimate that shows municipalities require around $5 billion annually to build infrastructure resilient to climate change. Ness said that money is not a lot when you compare it to money that would be lost from not adapting to climate change.
If Canada starts to reduce emissions and begins to proactively adapt to climate change, some 75 per cent of the economic damage of climate change in the country can be mitigated.
“It really is that tag team combination of reducing emissions and proactive adaptation that's going to allow us to persevere and prosper through climate change,” Ness said.