Vancouver endured its longest cold snap in more than 30 years this winter, with heavy snowfall and temperatures that stayed below 5 C for weeks.
The city’s plight may have attracted ridicule from the rest of Canada, where snow and freezing temperatures are hardly something to bat an eye at. But the episode raises important questions about the cost of climate change, and of extreme weather in particular.
In early January, CBC reported that the City of Vancouver had spent $2.5 million on snow and ice removal that year, up from a budget of $750,000. The city was also criticized for not using tax dollars efficiently to salt and clear roads.
In recent years, Canada has been no stranger to costly natural disasters. The Fort McMurray wildfires in May 2016 were reported to cost insurers $3.6 billion, while the southern Alberta floods in 2013 produced an estimated insurance loss of $1.8 billion.
In general, insurance industry costs have increased dramatically in the last decade. Between 1983 and 2004, insured losses averaged $373 million a year. From 2005 to 2015, that number more than tripled to $1.2 billion a year, according to a Clean Energy Canada report from November 2016.
The report also found that Canada’s Disaster Financial Assistance Arrangements program, created in 1970, had provided more recovery funding in the previous six years than in its first 39 years.
These trends are mirrored around the world. A 2010 Swiss Re report found that annual insured losses from weather-related disasters had jumped from US $5.1 billion between 1970 and 1989 to US$27 billion in the 1990s and 2000s.
Of course, climate change costs aren’t just limited to the insurance industry. Recent UBC research also found that global fisheries could lose about $10 billion in annual revenue by 2050, largely from warmer temperatures and changes in ocean salinity, acidity and oxygen.
In 2011, Canada’s National Round Table on the Environment and the Economy (NRTEE) estimated that the country’s climate change-related costs could rise from $5 billion a year in 2020 to between $21 billion and $43 billion a year in the 2050s. That analysis included costs to human health and ecosystems.
But there are a lot of unknowns when it comes to climate change costs in Canada. The NRTEE was shut down by the former Harper government in 2013, and there have been few regional studies that provide more detailed cost estimates for different parts of the country.
“I think we’re at the early stages of tackling economic impacts of climate change challenges,” Al Douglas, director of the Ontario Centre for Climate Impacts and Adaptation Resources, told Arctic Deeply. “Maybe one could say that there just needs to be more interest in this.”
Still, a lack of information didn’t stop Bank of Canada deputy governor Timothy Lane from issuing a warning during a speech in Montreal earlier this month.
“Climate change itself and actions to address it will have material and pervasive effects on Canada’s economy and financial system,” he said.
Lane made a strong case for putting a price on carbon, arguing that “setting the right price for carbon is at the core of Canada’s strategy to tackle climate change.” The federal government announced last fall that a national floor price on carbon will be applied across the country in 2018.
Lane also advocated for green finance—directing private-sector investment toward sustainable initiatives.
Though he acknowledged that the shift to a low-carbon economy does present challenges, Lane said Canada’s economy is adaptable.
“The same factors that have made Canada resilient to the oil shock should serve us well as this adjustment proceeds,” he said. “We also will rely on the innovative capacity of Canadians to recognize the many opportunities to develop new products and technologies for a lower-carbon world.”
By Maura Forrest, 23 March 2017
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This article was written for Clean Capital News a free bi-weekly publication dedicated to producing topical articles on sustainability and clean technology that advance our understanding of issues like climate change and help generate solutions for a more sustainable future.
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