Canada’s governments are developing a climate plan capable of meeting or beating their national climate goals. The reality is that there are no zero-cost options available—an effective plan to hit their targets will require new investment. Clean Energy Canada has compiled a backgrounder in an attempt to put into context the cost clean growth policies will have on the country.
The current data on extreme weather events is already showing a rapid increase in the financial impact to Canada. The Commissioner of the Environment and Sustainable Development reported that over the past six fiscal years, the government spent more on large-scale natural disaster recovery than in the previous 39 fiscal years combined. Since its inception in 1970, the annual average payouts to provinces and territories by the Disaster Financial Assistance Arrangements program has risen from $12 million to $373 million. Private insurance industry costs due to catastrophic events show a similar pattern of growth.
Climate change is having negative impacts across various sectors of Canada’s economy. Off-season heat waves and early warming have ruined millions of dollars in crops, have led to the growth of invasive species in forest areas, and have decreased access to winter trucking routes. As sea levels rise and marine ecosystems are destroyed, regional climate change impacts will only become more severe.
A 2011 economic modeling estimate from the National Roundtable on the Economy and the Environment found that the future cost of climate change for Canada could grow from approximately $5 billion per year in 2020 to between $21 billion and $43 billion per year by the 2050s—roughly 1% of GDP that year. Of particular concern are climate change’s impacts on the timber sector, on flooding, and on health. Looking forward, the report finds that while some costs are unavoidable, well-designed policies to cut carbon pollution offer an excellent return on investment for Canada.
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