There has been a lot of discussion about this in Canada lately financial costs of meeting the country’s climate targets. And rightly so. The situation is acute and we need to act now.
Combating climate change will require a concerted effort that will affect all sectors of the economy. And at the same time there will be great economic opportunities and many new jobs green economythere will be significant disruptions in the workforce, serious economic problems and significant investment.
However, we in the financial business love to look at the book from both sides. And given the damage done Canadian economy We can expect from fires, floods, melting ice caps and biodiversity loss due to climate change, investments in reducing greenhouse gas emissions are starting to look very profitable.
Climate change is affecting economic prosperity
У new study we recently published with the Institute of Sustainable Finance, we claim economic value every day is sacrificed by the fact that no measures are taken to mitigate the economic and environmental risks associated with climate change. Existing economic models agree that losses are inevitable without change and investment. But questions remained as to how much value would be lost and how quickly.
Our study simulated the physical risk for Canada, or how much capital production could be lost in different warming scenarios between the present and the end of the century. We found that under the usual scenario, without taking new international measures to reduce the impact of greenhouse gases that would allow the climate to warm up to 5 degrees Celsius by 2100, Canada’s total cost would be $ 5.5 trillion.
That’s a big number. And that’s a lot higher than the damage we see in the script global warming remains at 2 C, which we estimate is about 2.8 trillion.
Of course, these are only financial costs and do not take into account the suffering of those who lose their livelihoods, homes and businesses, or even their lives due to climate disasters.
Our study also shows that the associated costs of physical harm are greater than the investment required to reduce greenhouse gas emissions. In fact, the difference of $ 45.4 billion exceeds the required investment. And it doesn’t even take into account the potential economic benefits of transitioning to a low-carbon economy.
Yes, it is true that Canada cannot fight climate change on its own, and that it is a global effort. But for a rich, developed industrialized country such as Canada, a clear incentive to take the lead in the world and meet our own zero goals.
Prompt action is crucial
There is also a great incentive to act now, as in the coming decades we will face some turning points that will greatly complicate the task.
Our study found that the cost of damage from climate change is expected to rise gradually by 2050, around this time there is a sharp increase in all scenarios. By 2070, there is an exponential increase in damage. These dates correspond to the two significant target dates for achieving the net zero marked The Intergovernmental Panel on Climate Change in its reports.
Despite recent increased attention to tackling climate change, progress is too slow. It becomes clear that we are not in pace limit the rise in global temperature to 1.5 degrees above pre-industrial levels by 2100. IPCC estimates and others believe that with the current progress and if the world fulfills its existing commitments, we are more tuned to the 3 C warming scenario. There is a very real risk that warming will be even higher.
All of this is bad news for Canada, which is highly exposed to climate change and warming twice as much as the world average. But so far we have not had an effective assessment of the physical risks and potential cost of capital for Canada.
Citation: Canada faces huge physical costs from climate change, making zero account big investment (2022, May 19) received May 19, 2022 from https://phys.org/news/2022-05-canada-huge-physical-climate -net .html
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