TALLYING THE HIDDEN COSTS
Discussions on the economic impacts of climate change naturally turn to things such as forestry, agriculture and fishing. But there are other, hidden, economic costs, says a Saint Mary’s University professor.
Kate Ervine of the university’s school of the environment says with climate trends and the increased levels of destructiveness from extreme weather events, “what they’re saying is coming is getting more certain every year. I think with that, we’re getting better data on what the economic impacts are going to be.”
She says the list of issues is wide-ranging, but there are many factors that don’t always come to mind in discussions on the economic costs of climate change.
“When we talk about the health impacts of extreme heat, it doesn’t necessarily have a climate change price tag on it,” she says.
Heat waves, like the one that killed more than 30,000 people in Europe in 2003, can put more people in the hospital, bogging down an already overwhelmed healthcare system.
“That’s one of those hidden costs. When you have public health-care systems that are already struggling because they’re not adequately funded, and then the numbers begin to increase because you have more of the extremes in heat, or you have disasters and the spread of epidemic disease or people who are injured in those kinds of disasters ... that puts a massive burden on the healthcare systems,” she said. “It’s another cost that we haven’t fully comprehended at this point.”
EXTREME WEATHER, EXTREME DAMAGE With wildfires, hurricanes and flooding happening on a global scale, Ervine says insurance companies “are beginning to see climate change as a major threat to their business model because they can’t afford the payouts that are coming with it.”
“We’re actually getting up into the trillions of dollars when we think about that cost that isn’t yet adequately quantified as climate change costs,” Ervine says.
The uptick in damage in recent years has been steep. “If you look at the 2017 Atlantic hurricane season in the United States, where you had hurricanes Harvey and Irma and Maria, it was absolutely devastating, and many studies now put the cost at roughly $300 billion for those three storms combined.”
She says a lot of insurance companies also provide agricultural insurance, and are taking hits because of payouts for crop insurance following extreme heat or snap freezes connected to climate change.
Damage to homes can be a hidden cost, she says, because “we often bear them individually. If there’s flooding in your home, or the high winds are taking down trees, we tend not to put the climate change price tag on it, but we know there is a connection there in terms of the increased frequency of these events.”
Economically, the cost of climate change is growing every year, “and it’s only going to get worse,” she says.
While scientists have set a target of limiting the global rise in temperatures to 1.5 C, research shows that the Paris Agreement targets for emissions reductions will leave warming of 2.5 C to 3 C. Global warming of 2.5 C will cause a 15 to 25 per cent reduction in per capita global economic output by the year 2100. If the increase is 4 C, the reduction is more than 30 per cent.
“We’re talking about trillions and trillions of dollars in economic damages,” Ervine said.