OTTAWA, October 21, 2021— Canada’s economy faces a “sink-or-swim” decade, according to the first study to assess Canada’s economic prospects in the face of accelerating global market shifts responding to climate change. 

Sink or Swim: Transforming Canada’s economy for a global low-carbon future is a major new report from the Canadian Climate Institute, Canada’s independent climate policy research institute. The report assesses Canada’s economic prospects in response to the global low-carbon transition and offers recommendations for successfully navigating that transition.

Countries responsible for over 70 per cent of global GDP and over 70 per cent of global oil demand have committed to reaching net zero emissions by mid-century. Trillions of dollars in global investment will move away from high-carbon sectors. The impact of these global shifts will be profound, shifting trade patterns, reshaping demand, and upending businesses that are too slow to adapt.

To better understand the risks and opportunities of this transition for Canada, Sink or Swim stress tests publicly traded companies under different scenarios. Without major investment, the report finds, many exporters and multinationals will see significant profit loss in the coming decades. The stakes are high for Canada, with almost 70 per cent of goods exports and over 800,000 jobs in transition-vulnerable sectors, including oil and gas, mining, heavy industry, and auto manufacturing. 

To succeed in this global transition, the report concludes, Canada must use climate policy, company disclosure, and targeted public investment to mobilize private finance and improve the resilience of Canada’s workforce and impacted communities. 

QUOTES

“Our analysis shows that global policy and market changes will have a profound impact on Canada’s economy and workforce. To stay competitive, Canada needs to rapidly scale up new, transition-consistent sources of growth—and successfully transform existing ones. Moving too slowly is now a greater competitive risk than moving too quickly.”

—Rachel Samson, Clean Growth Research Director, Climate Institute

“The global transition means Canada must transform its economy in the face of new market realities. With smart, certain policy and innovation across the private sector, there is a path to strong economic growth, gains in well-being, and lower emissions.”

—Don Drummond, Stauffer-Dunning Fellow and Adjunct Professor at the School of Policy Studies at Queen’s University and fellow-in-residence at the C.D. Howe Institute 

“Major Canadian investors understand the pressures our economy will be facing as a result of accelerating global market shifts, and we’re issuing a strong call for increased climate accountability and transparency in the corporate sector.” 

—Dustyn Lanz, CEO, Responsible Investment Association 

“The Aluminum Association of Canada supports a holistic view of Canada’s trajectory towards net zero emissions. A multifaceted approach with room for everyone will support a transition to a prosperous and sustainable economy.”

—Jean Simard, President and Chief Executive Officer of the Aluminium Association of Canada 

“Canadian businesses and investors need clarity on which economic activities are consistent with the transition to a low-carbon future. Without that clarity, there is a risk that finance will flow in the wrong directions and miss areas of great opportunity. The analysis in this report will support the development of practical taxonomies that can be used for transition-consistent investment decisions and financial products.”

—Barbara Zvan, CEO & President, University Pension Plan and member of Canada’s former Expert Panel on Sustainable Finance. UPP is a participating organization of the Sustainable Finance Action Council

RESOURCES 

• Summary Report
• Full Report

CONTACT

Catharine Tunnacliffe

Director of Communications

(226) 212-9883

OTTAWA, June 2, 2021—As the world takes stock of how the COVID19 pandemic continues to impact the most vulnerable people, a new report from the Canadian Climate Institute warns that climate change will similarly worsen health inequities and significantly increase costs to Canada’s health system and economy without targeted government action.  

Published today, The Health Costs of Climate Change: How Canada Can Adapt, Prepare, and Save Lives finds that climate change represents a significant public health threat that will disproportionately harm those most vulnerable.  

Assessing a range of possible impacts under both low- and high-emissions scenarios, the report finds that the impacts of climate change could cost Canada’s healthcare system billions of dollars and reduce economic activity by tens of billions of dollars over the coming decades. Adding the value of lost quality of life and premature death, the societal costs of climate change impacts on health will amount to hundreds of billions of dollars.  

The report concludes that responding effectively to climate-related health threats will require Canadian policy makers to expand their focus beyond considering climate and health policy in isolation, and offers recommendations to support prioritizing policy and investment that addresses the social and economic root causes of poor health and health inequity. 

QUICK FACTS 

• The average number of dangerously hot days (days above the threshold for heat-related deaths) are projected to range from 75 to 100 days each year, on average, by later this century. That’s the equivalent of between ten and 14 straight weeks of dangerously hot days each summer. 
• As temperatures increase, ground-level ozone (a component of urban smog) is projected to worsen under all scenarios. Towards the end of the century, the report estimates that ground-level ozone could cause over a quarter of a million people per decade to be hospitalized or die prematurely, with an annual cost of about $250 billion. 
• Climate change has already increased the frequency and severity of wildfires across the country, resulting in widespread air pollution and economic devastation in affected areas, and the impacts of wildfires on air quality and human health are expected to worsen in many regions.
• Under the high-emissions scenario, climate change will lead to a projected loss of 128 million hours of work annually by the end of the century due to heat impacts on productivity. This is the equivalent of 62,000 full-time jobs lost, or $14.8 billion per year in lost productivity. 
• In addition to the estimated damages, the costs of health-related climate impacts that are  difficult to measure today may far exceed those considered in this report. Climate change is likely to impact people’s mental health, lead to ecosystem changes, and negatively impact cultures and ways of life. These losses may not be on balance sheets or in  government budgets, but to overlook them risks ignoring some of the most critical  impacts of climate change on health and well-being. 

QUOTES 

“Good health doesn’t start in the doctor’s office or the emergency room. It starts in our homes, our jobs, our communities—and by proactively adapting to the effects of climate change. Investing in improving the social, economic, and environmental factors that determine our health will save lives and improve quality of life for generations to come.”  

—Ryan Ness, Adaptation Research Director, Canadian Climate Institute 

“Throughout the COVID19 pandemic, Canadians have seen the importance of robust and proactive public health measures. They have also seen that the most disadvantaged populations bear the greatest burden in a public health emergency. What is true for COVID19 is true for climate change. Climate change is a public health emergency and must be treated as such. This report underscores the importance of governments investing today in proactive initiatives to protect people’s health and well-being.”  

—Ian Culbert, Executive Director, Canadian Public Health Association 

“The scientific consensus is clear: without rapid mitigation of greenhouse gas emissions, the public health effects will only intensify in the years to come. Fortunately, many of the policies needed to fight climate change could also produce health benefits, reduce health care costs, and improve social cohesion and equity in our communities. This report underscores that climate change disproportionately harms the most disadvantaged populations. Policymakers must consider options that have a triple aim of reducing the impact of climate change, improving health outcomes and reducing health inequities. 

—Eric J. Mang, Co-Chair, Canadian Coalition for Public Health in the 21st Century 

RESOURCES 

• Report  
• Executive Summary 
• Interactive Infographic 

CONTACT 

Catharine Tunnacliffe

Director of Communications 

(226) 212-9883

OTTAWA, Earth Day, April 22, 2021—The Canadian Climate Institute’s Board of Directors today announced that Dr. Rick Smith will lead the Institute as President effective June 14, 2021. 

Smith, a long-time environmental and policy thought leader, will take over from founding President, Kathy Bardswick, who is making her departure after two successful years establishing the Institute as a trusted, independent source of evidence-based climate policy research and analysis. The staff and Board wish to recognize Kathy Bardswick for demonstrating strong leadership in establishing the Institute and building a solid foundation for future growth. 

Smith brings 25 years’ experience leading non-profit organizations, having spent the past eight years building the Broadbent Institute into one of the country’s most prominent policy think tanks. He holds a PhD in biology, has published widely, including co-authoring two best-selling books on the human health impacts of pollution, and has worked across the country and around the world with a wide variety of stakeholders pursuing fact-based solutions to environmental, social and economic challenges.

QUOTES

“I’m honoured to take on this role at a time of unprecedented momentum on climate policy within Canada and around the world. The need for progress is an urgent one: the actions we take in the decade ahead will be critical in safeguarding our ecosystems, the health and well-being of people living in Canada, and our country’s future prosperity. I very much look forward to working with the Institute staff, Board, experts and broader network to advance the best research and engage all in Canada in shaping practical climate policy solutions.”
—Dr. Rick Smith, incoming President, Canadian Climate Institute

“It has been an immense pleasure contributing to the establishment of this Institute from the ground up, alongside a stellar team of staff colleagues and guided by many of the most committed, capable climate change leaders in the country. I am proud of the Institute’s contribution to informing discussions about Canada’s public policy choices, grounded in evidence-based, inclusive, non-partisan and practical policy research. I wish Rick Smith every success as he leads the Institute forward.”  
—Kathy Bardswick, founding President, Canadian Climate Institute

“Dr. Rick Smith is a seasoned and strategic leader and we enthusiastically welcome him into the Institute. Rick’s experience will be instrumental as we embark on important new work to inform and equip governments, industry leaders and other diverse stakeholders across the country with evidence-based perspectives on climate policy priorities. We also thank Kathy Bardswick for her incredible dedication and leadership in establishing the Institute, and we look forward to continuing to work together in the climate and clean growth policy space.”
—Peter Nicholson, Chair, Board of Directors, Canadian Climate Institute

CONTACT

Catharine Tunnacliffe
Director of Communications
(226) 212-9883

First comprehensive modelling report on how Canada can achieve net zero emissions by 2050 shows success relies on decisive action in the face of uncertainty.

OTTAWA, February 8, 2021—Canada’s Net Zero Future, published today by the Canadian Climate Institute, is the first in-depth scenario report to explore how Canada can reach net zero emissions by 2050. Canada can not only achieve net zero, the report finds, it can capitalize on unique advantages by doing so. However, success hinges on governments and businesses decisively scaling up solutions available today, while skillfully navigating unavoidable uncertainty.

Achieving net zero emissions requires shifting to technologies and energy systems that do not produce greenhouse gas emissions, while removing any remaining emissions from the atmosphere and storing them permanently. To assess a mix of policies and technologies that could contribute to Canada reaching net zero within 30 years, the Institute analyzed more than 60 modelling scenarios and undertook supplementary research and consultation with policy experts, industry leaders, governments and civil society.

The report finds Canada’s success in building a prosperous net zero economy relies on advancing two distinct types of climate solutions: “safe bets” and “wild cards”.

Safe bets—commercially available, cost-effective technologies like electric vehicles, heat pumps in buildings, and smart grids—can generate at least two-thirds of the emission reductions required to hit Canada’s 2030 climate target. Canadian businesses, governments and households must massively scale up these solutions to achieve Canada’s 2030 and 2050 climate commitments. This will require creating incentives through increasingly stringent policy.

But success also requires wild card solutions—high-risk, high reward technologies like advanced biofuels, zero-emissions hydrogen, and some types of engineered negative emission technologies that are not yet commercially available. If they prove viable, these emerging solutions could drive significant emission reductions between 2030 and 2050—and could offer valuable export opportunities to meet growing demand for low-carbon technology and expertise. Realizing the potential of these solutions also requires policy, such as support for pilot projects, R&D, and tax incentives now, to increase the odds these prospective solutions come through.

As major economies including China and the European Union move towards net zero emissions, Canada’s energy systems and economy will have to keep pace or risk competitiveness pressures and shrinking market share. This is particularly apparent as the United States, Canada’s largest trading partner, pivots under the Biden administration to pursue major investments in clean energy and a commitment to achieve net zero by 2050 or earlier.

Forces outside Canada’s control will likely be the primary drivers of structural changes within Canada’s economy and energy systems in the decades ahead, the report finds. This includes not only climate policy action in other countries, but also forces like global oil market dynamics and shifting market trends and investor preferences. Developing both Canada’s safe bet and wild card advantages is key to creating opportunities to pivot and adapt, the research concludes.

Achieving Canada’s 2050 target requires policy makers to act decisively in the face of uncertainty. To scale up safe bets, governments should continue to steadily increase the stringency of policies such as carbon pricing and flexible regulations. To advance wild cards, governments should spread their bets—supporting a portfolio of emerging technologies, without delaying progress on existing smart bet solutions over the next crucial decade.

QUOTES

“Reducing Canada’s emissions to net zero by 2050 is no small feat—but it’s doable. For Canada to prosper on the path to net zero, governments and private sector leaders need to navigate complex changes to our policy and energy landscapes, while acting decisively on the solutions and insight available today. Canada has significant advantages compared to our peers, but as technological disruptions and global markets shift the ground beneath us, decision makers will need to manage uncertainty while adapting to seize emerging opportunities.”
-Kathy Bardswick, President, Canadian Climate Institute

“Uncertainty comes with the territory on Canada’s path to net zero—but that’s no reason to delay. There are many solutions we know will be central to reducing emissions in the next decade—electric vehicles, more efficient buildings, and non-emitting electricity like wind and solar are all safe bets. Canada has every advantage, and little risk, in rapidly scaling up these solutions. At the same time, Canada will need to spread its bets by investing in a portfolio of wild card technologies, to increase the odds that some of these solutions will come through when we need them.”

-Jason Dion, Mitigation Research Director, Canadian Climate Institute

CONTACT

Catharine Tunnacliffe
(226) 212-9883

A new report from the Canadian Climate Institute warns that the costs of climate change for Canada are massive and mounting, and recommends substantial increases in adaptation investment and enhanced climate risk disclosure to build resilience and limit damages. In light of the federal government’s fall economic statement, the need to plan for and limit foreseeable and manageable future costs is even more clear. 

The Institute’s comprehensive analysis of historical trends found that weather-related disasters like floods, storms and wildfires are getting more frequent, more extreme and more expensive—already adding up to billions of dollars each year. Since 2010, the costs of weather-related disasters and catastrophic events have amounted to about 5 to 6 per cent of Canada’s annual GDP growth, up from an average of 1 per cent in previous decades.

However, the report, Tip of the Iceberg: Navigating the Known and Unknown Costs of Climate Change for Canada, also reveals that only a fraction of climate change-related costs can be accurately quantified today, and that unknown costs may far exceed those that are understood. While reducing emissions in line with Canada’s climate targets remains critical to limit future damages, it won’t be enough to shield Canadians from the costs—known and unknown—of climate impacts already in motion.

Addressing and preparing for the impacts of a changing climate and building Canada’s resilience through climate change adaptation could help keep many of these costs in check. The report recommends governments and financial regulators systematically increase public and private-sector disclosure and transparency about the risks of a changing climate in decision making, to drive resilient investments and adaptation solutions. The Institute also recommends significantly increasing public funding for adaptation measures that improve resilience, and co-ordinating climate change adaptation efforts across provincial, territorial, Indigenous and municipal governments to scale up adaptation. 

Without such measures, the report finds, catastrophic losses from weather-related disasters could rise unsustainably. Insured losses for catastrophic weather events totalled over $18 billion between 2010 and 2019, and the number of catastrophic events was over three times higher than in the 1980s. Meanwhile, the average cost per disaster has jumped 1250 per cent since the 1970s; a typical storm or flood that cost roughly $8 million in the early 1970’s now costs over $110 million.

The report finds damages from more drawn-out climate change impacts, such as sea-level rise and permafrost thaw, could also increase substantially. For example, permafrost thaw in the Northwest Territories’ 33 communities is estimated to rack up $1.3 billion in costs over the next 75 years, equivalent to about 25 per cent of current territorial GDP. Further, without adaptation, accelerating climate change will increasingly impact health, ecosystems and Indigenous rights, lands and practices in ways that are harder to quantify in economic terms, yet remain highly consequential.

QUOTES

“One lesson Canada must learn from the global pandemic is that we need to get much better at foreseeing and acting on risk. As climate change accelerates, no individual, province or sector will be immune. Now more than ever, we cannot afford to ignore massive future costs—especially those that we have the power to manage. We can limit our risk exposure and make better decisions by investing in resilience and mandating climate risk disclosure.”
Kathy Bardswick, President, Canadian Climate Institute

“Canada has largely left the potential of climate change adaptation untapped. Not only are we more exposed to risk than necessary, we’re also missing out on significant returns that come from investing in resilience. We have the opportunity to proactively reduce some of our most critical climate-related risks—from urban flooding, to crop-killing droughts, to deadly heatwaves. Analysis shows that investing in well-designed climate adaptation measures before disasters strike can provide impressive returns by preventing damages and avoiding social and economic disruption.”
Dave Sawyer, Principal Economist and lead report author, Canadian Climate Institute  

KEY FACTS

• Since 2010, the costs of weather-related disasters and catastrophic events have amounted to about 5 to 6 per cent of Canada’s annual GDP growth, up from an average of 1 per cent in previous decades.
• Insured losses for weather-related disasters in Canada totalled over $18 billion in the past decade, doubling the total of the previous three decades.      
• Since 2010, the average cost per weather-related disasters totalled $112 million, up from $8.3 million in the 1970s—a staggering 1250 per cent jump.
• The Fort McMurray wildfires were the single most costly weather event in Canadian history, racking up almost $11 billion in terms of property and infrastructure damage, and losses from business disruption. The resulting hit to the economy was equivalent to 3.5 per cent of Alberta’s GDP or about 1.5 years of lost provincial economic growth.
• 1.8 million households are estimated to be at high risk of flooding—10 per cent of all households nation-wide.

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CONTACT

Catharine Tunnacliffe
(226) 212-9883