Canada’s economy already hurt by climate change, households hit hardest

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New report shows climate damage is already affecting Canada’s economy and will halve growth by 2025

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OTTAWA, Sept. 28, 2022 (GLOBE NEWSWIRE) — A report released today by the Canadian Climate Institute shows that the rising costs of a volatile climate are already dragging Canada’s economy down, with those costs set to rise rapidly in the coming years. The Report – Mitigation: Reducing the Cost of Climate Impacts in Canadaexamines the macroeconomic costs of climate change and assesses them in both low and high emission scenarios compared to a stable climate scenario. Analysis shows that climate impacts will cost Canada billions, making life less and less affordable for households as economic growth slows, governments hike taxes to pay for climate-related disasters, job losses increase and goods become more expensive due to disrupted supply chains.

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The report, which is the culmination of a series of five reports and is Canada’s most comprehensive macroeconomic analysis of climate change to date, also presents solutions. Proactive adaptation policies and policies can limit climate change damage, cut projected costs in half, save billions of dollars, and make life more affordable for households. According to the report, one dollar invested in proactive adaptation can yield $13 to $15 in direct and indirect benefits. And when adaptation action is combined with global emission reductions, future costs could be cut by three quarters, putting Canada on the path to a more stable and affordable future.

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Important insights damage control:

  • Climate-related damage is already here and they‘concerning sum up. By 2025, climate impacts will slow Canada’s economic growth by $25 billion annually, or 50 percent of projected GDP growth.
  • All households will lose income, and low-income households will suffer the most. Low-income households could see income losses of 12 percent in a low-emissions scenario and 23 percent in a high-emissions scenario by the end of the century.
  • Climate change is a job killer. Job losses could double by mid-century and rise to 2.9 million by the end of the century.
  • Customization pays off. Every dollar spent on adaptation saves $13 to $15, including direct and indirect macroeconomic benefits.
  • Limiting further heating while adjusting to the already burned-in heating pays more. Proactive adaptation measures halve the climate costs, combined with global mitigation measures even three quarters.
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QUOTES

“The results couldn’t be clearer: Canada is right in the crosshairs of a changing climate. The economy is very sensitive to this threat, and we are already paying the cost: by 2025, damage will have cut Canada’s growth rate in half. We have to reckon with these massive costs and do everything we can to limit the damage.”
– Dave Sawyer, Chief Economist, Canadian Climate Institute

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“The costs of inaction on climate change are measurable and growing. We must take adaptation and mitigation actions now to avoid severe damage to our economy, society, health and well-being.”
—Rick Smith, President, Canadian Climate Institute

“The economic impact of climate change is only now beginning to come into view, and this report provides thoughtful insight into how climate change could affect Canada’s economy. The threat is real, but fortunately much can be done to limit the damage. Investing in adaptation and resilience today will help protect Canada’s economy and could save lives. Proactive adaptation actions can reduce the cost of climate change impacts and provide a strong return on investment, saving money in the long run while paving the way for a more sustainable and prosperous future for Canadians.”
– Susan McGeachie, Director of the BMO Climate Institute, BMO Financial Group