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

Global emissions will have a price tag for Canada. Investing in adaptation and mitigation can help keep costs down. Climate inaction means a greater price to pay.

Climate Change Could be Expensive for Canada

Unless global greenhouse gas (GHG) emissions are brought down and Canada invests in adaptation, the economic impacts of climate change on Canada could climb to billions of dollars per year.

Paying the Price: the Economic Impacts of Climate Change for Canada – the fourth report in the NRT’s Climate Prosperity series – is the first national study to show what the economic consequences to Canada could be as a result of climate change, under four separate scenarios involving two factors: global GHG emissions and Canadian economic and population growth.

Although Canada contributes approximately 1.5% of global emissions, the report concludes that climate change impacts brought about by increased world-wide emissions have a real and growing economic cost to Canada. It also shows that adaptation – our capacity to manage the impacts to come – while not cost-free, is a cost-effective way to alleviate some of those impacts.

Based on NRT original economic modelling, the report finds that the economic impact on Canada could reach:

2020: $5 billion per year
2050: Between $21 and $43 billion per year

In the 2050s:

Timber supply impacts could range from $2 billion to $17 billion per year with high impacts in B.C.
Flooding damages to coastal dwellings, resulting from climate change-induced sea-level rise and storm surges, could cost between $1 billion to $8 billion per year with higher than average cost impacts in Atlantic Canada
Poorer air quality resulting from higher temperatures will lead to more hospital visits, resulting in millions of dollars in costs to local health care systems for four of Canada’s major cities – Toronto, Montréal, Vancouver and Calgary

Read the executive summary or download the full report

WHAT DID WE FIND?

Climate change is expensive
There is a risk that the costs could be far higher than we expect
Adaptation can save us money
Global mitigation reduces Canadian economic impacts and makes adaptation cheaper
The costs of climate change impacts and adaptation are uneven across the country

[Read our detailed findings]

WHAT DOES IT MEAN?

Ignoring climate change costs now will cost us more later
Adaptation isn ’t cost -free but often yields benefits
Adaptation policy and decision making can benefit from economic assessments

[Read more…]

WHAT DO WE RECOMMEND?

Canadians can and should use economic information to decide how to best prepare for, and respond to, the impacts of climate change. Our recommendations are as follows:

The Government of Canada invest in growing our country’s expertise in the economics of climate change impacts and adaptation so we have our own Canadian-focused, relevant data and analysis for public and private-sector decision makers.
The Government of Canada cost out and model climate impacts to inform internal decisions about adapting policies and operations to climate change and allocating scarce resources to programs that help Canadians adapt.
Governments at all levels continue investing in generating and disseminating research to inform adaptation decision making at the sectoral, regional, and community level. This research should, as a matter of routine, incorporate economic analysis of the costs and benefits of options to adapt to climate impacts because the current data is insufficient for decision makers and is not readily or consistently available.
The Government of Canada forge a new data- and analysis-sharing partnership with universities, the private sector, governments, and other expert bodies to leverage unique and available nongovernmental resources for climate change adaptation.

[Read our recommendations]

WHERE DO WE GO FROM HERE?

Paying the Price highlights areas where additional research and analysis on climate change impacts and adaptation are needed for Canada. Having clearly identified economic risks associated with a changing climate, we need to turn our attention to exploring the economic opportunities of adaptation — to both cope and prosper through inevitable degrees of climate change.

[Read more…]