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IBC study estimates future costs of specific severe weather events stemming from climate change


December 10, 2015   by Canadian Underwriter


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Canadian communities need to adapt to avoid the projected increasing costs due to climate change, according to a study released on Wednesday by the Insurance Bureau of Canada (IBC).

For Halifax by 2040, the annualized loss expectancy from extreme wind events could be about $18 million

The Economic Impacts of the Weather Effects of Climate Change, released on Wednesday, estimates some of the future costs to the communities of Halifax, N.S., and Mississauga, Ont. from specific severe weather events stemming from climate change. It also points to the need to increase infrastructure investments now to reduce costs down the road, IBC said in a press release.

“Halifax, Mississauga and other Canadian municipalities are working hard to adapt to changes in our climate. But they can’t do it alone,” said Amanda Dean, vice president, Atlantic, IBC, in the release. “Municipalities tell us they need cooperation and funding from provincial and federal governments to prepare. This study provides a partial analysis of the significant costs of severe weather events in our future.”

Researchers looked at two severe weather events per city. For Halifax, they studied extreme winds and storm surge flooding. For Mississauga, they considered ice storms and stormwater flooding. For each weather event, the researchers calculated what the economic costs to the city could be as a result of these weather events five years out (in 2020) and 25 years out (in 2040). They also considered the effect of worsening climate change, and ran the numbers for 2020 and 2040 three times – first using the cities’ current climate conditions, and then assuming moderate and high acceleration in the rate of climate change.

For the purposes of the study, researchers made the assumption that no new adaptation measures would be implemented by the cities during the timeframe studied; however, both cities are pursuing “ambitious climate change adaptation strategies,” IBC reported. [click image below to enlarge]

For Mississauga by 2040, the annualized loss expectancy from ice storms could be about $9 million

For Halifax by 2040, the annualized loss expectancy from extreme wind events could be about $18 million. A moderate increase in the rate of climate change could increase this figure to $20 million. One extreme wind event (calculated as a 1-in-25-year event) could cost an estimated $123 million to $126 million, IBC said.

For Mississauga by 2040, the annualized loss expectancy from ice storms could be about $9 million; a moderate increase in the rate of climate change could increase this figure to about $12 million per year. One severe ice storm (calculated as a 1-in-25-year event) could cost an estimated $23 million to $38 million.

Across Canada, insured damages from extreme weather events have cost almost $8 billion since 2010, which is only a portion of the total economic costs to the country, IBC reported.

“As a port city, Halifax is acutely aware of the sea level rise occurring in its harbour, and the need to prepare for more extreme weather conditions,” said Shannon Miedema, acting manager of energy & environment for the Halifax Regional Municipality, in the release, adding that the city was an early adopter of greenhouse gas emissions tracking and reduction targets. “This study helps us make a business case to take action in the short term, alongside our efforts to take a precautionary approach to decision-making.”

Brenda Osborne, director of environment for the City of Mississauga, said that the city is working with other levels of government to study the impacts of climate change, so that they can prepare themselves to prevent future impacts. “Currently we’re working with the Peel Climate Change Strategy Partnership to examine risks and impacts to the community from climate change, as well as implementing a stormwater charge to better maintain and expand our stormwater infrastructure,” she said.

IBC conducted the study with support from Natural Resources Canada, the Ontario Centre for Climate Impacts and Adaptation Resources, and Green Analytics.