What Ottawa can — and must — do about the weather
As scientists produce ever more evidence that climate change is disrupting the atmosphere, causing more floods, droughts, storm surges, wildfires, landslides, extreme cold snaps and deadly heat waves, Canada’s financiers are beginning to sound the alarm.
This week, the Toronto Dominion Bank released a stark report entitled Natural Catastrophes: A Canadian Perspective. It strongly advised government leaders and corporate decision-makers to take account of the accelerating pace of weather-related shocks in their investment decisions. “This is a major issue for Canada,” the bank warned. “With no sign that things are going to be getting any better, it’s prudent for businesses and policy-makers to start thinking of the long-term implications of inaction.”
The average number of natural catastrophes has doubled over the past 30 years, the bank pointed out. And the costs have ballooned. Last year’s two biggest weather-related disruptions — the June flood in southern Alberta and the July deluge in Toronto — left $2.7 billion worth of infrastructure damage. They were by far the two costliest natural catastrophes since 2000.
But dollars don’t begin to capture the real toll, Craig Alexander, the bank’s chief economist, emphasized. “These catastrophes can destroy homes, disrupt businesses and take lives.”
Last summer’s flood in Alberta left four people dead. Both emergencies triggered extensive power outages, interrupted air and ground transportation and turned people’s lives upside down.
For a long time, mainstream economists have shied away from the controversial issue of climate change. Part of the reason was a desire to steer clear of politics. The other part was purely practical. The tools of their profession don’t measure the harm done by cataclysmic events very well. Weather-related catastrophes barely register on the stock indexes. The principal yardstick of economic growth, the gross domestic product (GDP), goes up despite the devastation because of the economic activity the cleanup and rebuilding generate.
Regardless of these limitations, Alexander and his colleagues felt it was imperative to urge the bank’s clients and the Canadian public to prepare for an increase in violent and unpredictable weather. “Nobody is better off as a result of floods, in personal wellness or long-term economic well-being,” the report emphasizes. “The immense infrastructure damages and human tragedies caused by natural catastrophes have a devastating impact that popular economic accounts tend to overlook.”
The four-page report does not specifically mention fossil fuel emissions, greenhouse gases or unrestrained energy consumption, but all these factors are implicit in its bank’s analysis. “There is more to this spike (in natural catastrophes) than weather conditions,” it says. Its grim projections are based on the assumption that Canada will stay on the current trajectory. That would boost the cost (public and private) of natural catastrophes $5 billion a year by 2020 and $21 billion to $43 billion a year by 2050.
Unwittingly Canadians have increased the impact by natural catastrophes by congregating in major urban centres and building their homes on flood plains and vulnerable coastlines. Compounding the risk, city planners have promoted increased density, which means more people are affected by each adverse weather event. “Think of the economic ramifications of the severe cold snap that hit Toronto last December,” the bank says. “The freeze caused largescale power outages, shut down businesses and delayed air travel. Since Pearson Airport acts as a hub for many domestic and international flights, the economic impacts of the storm were also felt by other provinces and industries.”
The intent of the bank’s report is not to halt or even slow the advance of climate change. That is the work of scientists, environmentalists and international negotiators. What it aims to do is persuade policymakers, business leaders and individuals in Canada to mitigate the impact of the climate upheavals that are already happening or foreseeable.
Most of the provinces are already taking steps to limit the damage. Oil companies, automakers and homebuilders, likewise, are making adjustments. Only the federal government refuses to deviate from Prime Minister Stephen Harper’s full-steam-ahead approach to energy development.
This is not national leadership. It is a high-cost, high-risk economic strategy. Even bankers are worried.
Carol Goar’s column appears Monday, Wednesday and Friday.