The Institute for Sustainable Finance (ISF) has released a new report that indicated that the costs related to climate change could cost the Canadian economy trillions of dollars by the end of this century if global temperatures don’t stabilise soon.
The new report from the organization based out of the Smith School of Business at Queen’s University. In that study, researchers concluded that losses connected to the rising temperatures across the globe could result in around $2.8 trillion by the year 2100. These estimations fall under a 2 C warming scenario. That could reach $5.5 trillion under 5 C of warming, or what environment scientists are calling “business as usual.”
“Our research underscores that addressing climate change now more than pays for itself over the long term when we consider the costs of physical damage alone,” shared ISF chair Sean Cleary in a news release.
The study also details how that cost might unravel over the next few decades. According to ISF’s report, the cost will increase gradually until 2050. Then, the world could se a sudden rise and then an exponential one after 2070. Researchers also note that costs— estimated in 2020 dollars— could balloon to $45.4 billion greater than the amount of investment that should be made to reduce greenhouse gas emissions. This estimation doesn’t include the possible economic growth that a low-carbon economy could bring.
“These findings are important guidance for policymakers who need to consider that economic value is sacrificed every day that we don’t take action to mitigate climate change,” notes the report.
The model used by researchers in this study was developed by 2018 Nobel Prize winner William Nordhaus, entitled Dynamic Integrated Climate and Economy. Organizations that have used this approach include the U.S. Environmental Protection Agency. The ISF adds that the study’s estimated damages are like conservative and assumes that global temperature increases equally. But other reports show that some areas around Canada and the world are warming faster than others.
