GHD says that climate change could cost Canada’s economy $139B by 2050
The report predicts manufacturing and distribution will take the biggest hit from water-related climate disasters between now and 2050.
Floods, droughts and major storms that wash out highways, damage buildings and affect power grids could cost Canada’s economy $139 billion over the next 30 years, a new climate-based analysis predicts.
The report, titled “Aquanomics,” was published on Aug. 29 by GHD, a global engineering and architecture services firm.
GHD’s Canadian water lead Don Holland said there are lots of reports that count up insured losses and physical damage after major events like last fall’s atmospheric river in British Columbia.
“What this report does is actually takes into account the loss of economic productivity, the shocks to the system when it comes to supply chain prices, and all of that,” Holland said in an interview.
He pointed to the 2021 B.C. floods, which for a time cut off rail and highway links between the country’s biggest port in Vancouver and the rest of Canada. The disruption stressed supply chains already hampered by COVID-19, raising prices, slowing production in factories that couldn’t get parts, and leaving some shelves empty in grocery stores and other retailers.
“It had huge knock-on effects,” said Holland.
The report predicts manufacturing and distribution will take the biggest hit from water-related climate disasters between now and 2050 — an estimated $64 billion in losses, or about 0.2 per cent of the total manufacturing economy a year.
While droughts can restrict industrial production, floods and storms cause direct damage to buildings and machinery, or take out power supplies, forcing factories into silence.
The derecho wind storm that ripped across southern and eastern Ontario in May damaged the power grid in Ottawa so badly, parts of the city were without electricity for more than two weeks.
Drought is often seen as only a real risk to agriculture, but extreme drought can be much wider-reaching. In Europe, near-record lows on the Rhine River might halt marine traffic along Europe’s most important shipping lane that links major ports in Belgium and the Netherlands to Germany and Switzerland.
Last week in China, a massive heat wave prompted the government to force some factories to close to ration power as low river levels cut power output at hydroelectric dams.
Energy and utilities will face an estimated $14 billion in losses, either through direct damage to power grids and production plants, or reductions in power output at hydro dams and nuclear plants because of low water levels.
Agriculture is the fifth sector analyzed, which in Canada is estimated to lose about $4 billion over the next 28 years, also threatening food security.
GHD’s report says taking advantage of data systems and sensors to help predict problems before they arise can make a big difference.