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Paying the Price – Media Backgrounder

Paying the Price: The Economic Impacts of Climate Change for Canada

BACKGROUND

• This report complements Degrees of Change: Climate Warming and the Stakes for Canada published in 2010 – available at www.nrt-trn.ca.  Paying the Price is the fourth report in the NRT’s Climate Prosperity Series. 
• It was undertaken to estimate how the economic costs of the physical impacts of climate change to Canada stack up over time.  The report will allow Canadians to learn more about the costs of inaction on reducing global emissions and undertaking domestic adaptation.
• The NRT adopted a consistent, comparable scenario approach throughout its analysis. Instead of estimating the costs of climate change for only one possible future, we applied scenarios representing four possible futures to our analysis – building from established international scenarios – to highlight uncertainty and illustrate a range of future economic outcomes.
• Rapid population and economic growth / high climate change
• Slow population and economic growth / high climate change
• Rapid population and economic growth / low climate change
• Slow population and economic growth / low climate change
• The NRT conducted original modeling with input from experts, nationally and internationally.
• The report presents the average future costs we could expect in a changing climate resulting from timber supply reductions, coastal flooding, and health impacts under each future scenario.
• The average costs we can expect only tell part of the economic story. Our Canada-wide modeling work generated average costs but also incorporated uncertainty to show the likelihood of costs being far higher (or far lower) than the average, highlighting the economic risks we face.  

OVERALL FINDINGS

• Climate change costs for Canada could escalate from roughly $5 billion per year in 2020 to between $21 billion and $43 billion per year by 2050.
• There is a 5 per cent chance that economic costs could reach up to $91 billion in 2050 in a future of rapid Canadian population and economic growth and high global climate change.
• Climate change presents a growing, long-term economic burden for Canada. We can expect average costs to be equivalent to roughly 0.8% to 1% of GDP by 2050.
• Canada contributes approximately 1.5 per cent of global emissions. Emissions from abroad – not just our own – represent an economic risk to Canada. Reducing economic impacts on Canada requires reducing global emissions while implementing sensible adaptation strategies here at home.
• The costs of climate change impacts and adaptation are uneven across the country because climate change affects people and places differently.
• Climate change adaptation can save money by reducing the physical and economic impacts of climate change.

TIMBER SUPPLY

•  Canada is home to almost 3.5 million km² of forests, representing 10% of global forest cover and 30% of the boreal forest. Canada’s Forest Industry drives 1.7% of our GDP.

• The NRT considered the effect of climate change on forest productivity, forest fires, and pest disturbance. The effect of climate change on timber quantities intensifies over time and varies regionally with western parts of the country faring worse than eastern parts. The decreases in timber quantity range from 1-5% in the 2020s to 2-23% in the 2080s, but these impacts are more noticeable for western Canada than for eastern Canada. 

• Climate change will have real consequences for Canada’s forest industry and cascading effects will impact other sectors. GDP could fall by 0.1% to 0.3% by mid-century. In British Columbia, GDP could fall by roughly 0.2% to 0.4% by the 2050s.