Climate cost to Canada could be trillions of dollars by 2100: report

A new report estimates the total cost of climate change to the Canadian economy at trillions of dollars by the end of the current century if global temperatures continue to rise unabated.

The report comes from the Institute for Sustainable Finance (ISF) based out of the Smith School of Business at Queen's University in Kingston, Ont.

In the report, the researchers conclude that the losses from climate change could range between approximately $2.8 trillion by the year 2100, under a 2 C warming scenario, and about double that at approximately $5.5 trillion under 5 C of warming, or "business as usual."

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The costs increase gradually until 2050, at which they rise sharply and then exponentially after 2070.

The researchers say the costs, in 2020 dollars, are up to $45.4 billion greater than the amount of investment that would be required to reduce greenhouse gas emissions, not including the potential economic benefits of transitioning to a low-carbon economy.

"Our research underscores that addressing climate change now more than pays for itself over the long term when we consider the costs of physical damage alone," ISF chair Sean Cleary said in a news release.

"These findings are important guidance for policymakers who need to consider that economic value is sacrificed every day that we don't take action to mitigate climate change."

The figures are based on the financial challenges that Canada would face from events such as lost biodiversity, rising sea levels, and infrastructure damage from wildfires and floods resulting from climate change.

Citing a federal government report, they say this situation is particularly bad for Canada, given the country is warming twice as fast as the global average.

Under the Paris Climate Agreement, countries around the world, including Canada, have pledged to limit global average temperature increases to between 1.5 and 2 C.

The researchers used a model developed by 2018 Nobel Prize winner William Nordhaus called Dynamic Integrated Climate and Economy, which is used by organizations such as the U.S. Environmental Protection Agency to calculate economic costs over time based on greenhouse gas emissions.

The researchers say previous financial forecasts have only looked at the transitional costs, or the risks to businesses and investors, of moving to a low-carbon economy.

They add in their study that the damage estimates are likely conservative, given that the study assumes global temperature increases affect Canada equally, even though some areas of the country and around the world are warming faster than others are.

The Institute for Sustainable Finance out of Queen's University estimates the total cost of climate change to Canada could reach more than $5.5 trillion by the year 2100. (Institute for Sustainable Finance)