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Wednesday, 21 May 2014 15:04

Climate change must be real if bankers are getting worried

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Most Canadians still find it difficult to relate concerns over climate change to their daily lives, but a recent report by a Canadian bank makes a clear link between the economic impacts of a growing number of natural catastrophes.

It is easy to get overwhelmed by all the scientific data about climate change. The Intergovernmental Panel on Climate Change (IPCC) has released three working group reports between September 2013 and April 2014 that reflect the current state of scientific knowledge about climate change.
Just the initial report on the physical scientific basis for climate change is more than 1,500 pages long, reflecting the work of 259 authors from 39 countries. The second report on climate change impacts, adaptations and vulnerability involved 309 authors from 70 countries and the third report on the mitigation of climate change was the result of inputs from 235 authors from 57 countries.
All this work indicates that global emissions of greenhouse gases have increased at a faster pace between 2000 and 2010 than during each of the previous three decades. According to the IPCC reports it will require significant effort from all countries, involving technological measures and a change in behaviour, to stabilize greenhouse gas emissions and to limit the increase in global mean temperature to two degrees Celsius.
Does this mean anything to people beyond images of melting glaciers and warnings about a gradual increase in sea levels? That was the case last week, when the results from a NASA study showed the gradual collapse of a huge West Antarctica ice sheet will increase sea levels with 1.2 to 3.6 metres over the next few centuries.
Some have argued that climate change can even have positive economic benefits for arctic regions, for example the opening of new shipping routes, easier access to oil and minerals and an increase in tourism.
The United States government’s Third National Climate Assessment, which was released on May 6, attempts to create a realization among citizens that climate change is not something that will happen in the distant future, but that it is already a reality.
The report, Climate change impacts in the United States, states that “Climate change, once considered an issue for a distant future, has moved firmly into the present.”
It indicates the past decade has been the warmest on record in the United States since record keeping began in 1895 and that extreme weather and climate events have increased in recent decades.
The report mentions that the observed and projected impacts of climate change will vary across the country and it provides a breakdown of impacts across the different regions.
For example, the northeast United States will experience more heat waves and extreme precipitation as well as coastal flooding due to storm surges and rising sea levels.
In the case of the Great Plains region, the rising temperatures will have an impact on agriculture and higher demands for water and energy. In Alaska the thawing permafrost will cause damage to infrastructure and the changing ecosystem will impact native communities.
A recent special report by TD Bank provides a Canadian perspective on the impact of natural catastrophes on the economy. According to the report, which was released April 14, the average number of natural catastrophes has doubled over the past three decades.
“There is some evidence that severe weather is becoming more common in Canada, with storms that used to occur once every forty years now occurring once every six, in some regions of the country,” the report notes.
It adds the impacts of these severe weather events are made worse by population growth and urbanization, and that infrastructure should be upgraded to withstand more extreme weather conditions.
The report estimates an increase in the long-term financial impact of natural catastrophes in Canada from $5 billion per year in 2020 to between $21 billion and $43 billion by 2050. These figures on the economic impact of climate change in Canada were originally published in a 2011 report by the National Round Table on the Environment and the Economy (NRTEE).
The NRTEE was created in 1988 as an independent agency to advise the Canadian government on ways to meet the often competing challenges of economic development and environmental conservation.
The Harper government announced the termination of the NRTEE as part of various environmental cutbacks in the 2012 budget and the organization closed its doors March 31, 2013. In one of its final reports the NRTEE noted Canada will not achieve its 2020 greenhouse gas emission reductions target.
The NRTEE’s final report made a case for a greater focus on investment in renewable and clean energy sources in Canada instead of relying on traditional energy sources such as oil and coal. It suggested this move towards a low-carbon economy can be achieved if the federal government provides a policy framework that stimulates innovation by the private sector.
The TD Bank report indicates that one of Canada’s largest banks, with significant investment interests in the United States, is aware that climate change can have a real and lasting economic impact. Hopefully the report’s call on businesses and policymakers to start thinking about the long-term implications of natural catastrophes will not go unheeded.
Matthew Liebenberg is a reporter with the Prairie Post. Contact him with your comments about this opinion piece at This email address is being protected from spambots. You need JavaScript enabled to view it. .

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Matthew Liebenberg