TD Bank says weather disasters will cost Canada up to $43 Billion a year by 2050, but GDP and other measures ignore the economic impact
A new report on the financial implications of climate change notes that while natural catastrophes are estimated to cost Canadians $21-$43 billion per year by 2050, popular economic measures like GDP fail to capture the escalation, discouraging preventative investment.
The TD report follows a recent and alarming warning by the United Nations Intergovernmental Panel on Climate Change that governments are ill-prepared for a warming world. If action is not immediately taken, the UN report projected risks could become unmanageable.
Monday’s report detailed the Canadian perspective on increasingly frequent natural catastrophes — the average number per year has doubled over the past three decades — and how by 2020 they will sap an estimated $5 billion from the economy.
“The reality is that the frequency of weather events has increased,” said lead author and TD economist Craig Alexander. “Storms that used to occur every forty years are now occurring every six years. And because of the composition of Canadian economy and society, we’re ending up with more damaging events.” …
“Many Canadian cities are located in places that are vulnerable to severe weather events. So, for example, we have cities near river mouths and coasts, like Vancouver and Montreal,” said Alexander. “We saw a lot of damage to the city of Calgary due to flooding of the river that runs through Calgary. You also have cities in the prairies that are vulnerable to drought.”
In light of the exponential costs the Canadian economy could face, the TD report notes that financial indicators and markets may not accurately reflect the disruption caused by frequent disasters.