Adapt to climate change to reduce the bill

Soon, half of the benefits of economic growth will go to repairing the damage caused by climate change, estimates a Canadian study. After that the situation will deteriorate rapidly, unless we succeed in slowing down the warming of the climate, but also that we deploy the necessary efforts to adapt to it.

Climate change will cost the economy more and more over the next few years, warns the Climate Institute of Canada (CCI) in a report officially released on Wednesday and titled Limit the damage. The damage they are already inflicting in terms of destruction of property, accelerated depreciation of infrastructure, and preventable disease and loss of life is expected to amount to $25 billion in Canada in 2025, or the equivalent of half the increase in gross domestic product (GDP) for that year. And if nothing changes, the bill will only increase thereafter, to reach between 78 and 101 billion in 2050, then between 391 and 865 billion at the end of the century.

The bill promises to be even higher for households, and particularly those who have less financial leeway, continue the authors of the report. Affected, among other things, by the consequences of the accelerated destruction of infrastructure on production costs and by the reduction in work due to heat and disease, the average annual income of each Canadian will have been reduced by $720 within three years compared to what it would have been without climate change. This amount will be $1900 to $2300 in 2050, and could exceed $10,500 per year in 2095.

Part of this impoverishment will come from the growing needs of governments struggling with roads, buildings and urban infrastructure that will require increasingly frequent and costly repairs and reconstruction, not to mention the increase in health costs due to the pollution.

All more or less losers

And all of these estimates are probably conservative, say ICC experts. Like an iceberg of which only the tip can be seen, many very real but difficult to estimate economic risks will also probably be felt, such as the increase in mental health problems, the increase in the number of climate refugees and the deterioration of ecosystems providing vital ecological services.

Quebec would be one of the places where these negative economic repercussions would be the weakest in Canada, far behind the northern territories and Alberta, among other things because climate warming should bring more water to its hydroelectric dams. The agricultural sector could also see its yields increase and the construction sector could benefit from all this infrastructure to be rebuilt, but the losses suffered by all the other sectors would more than erase these gains.

Reduce and adapt

Honoring promises to reduce greenhouse gases (GHGs) would obviously help limit this growth in costs attributable to climate change. But it would be even better if we took note of the changes underway, and if the public authorities and private companies committed themselves without further delay to “proactive adaptation” to the new climate reality.

Taken in isolation, these two types of action have the power to reduce the economic cost of climate change by 50%, but carried out in parallel, they could reduce the bill by 75%.

Adaptation measures alone have the power to turn a dollar of investment into $5 of direct damage cost reductions, in addition to another $10 of broader economic benefits, for a $15 total.

The upcoming unveiling of a first Canadian strategy for adapting to climate change may help governments and businesses do better in this area, hope the ICC experts. But at the moment, Canada is even further behind than when it comes to reducing GHGs.

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