How climate change is already costing you money

As if you needed more reasons to worry about the environment, here are five ways global warming is hurting your wallet
By Patrick Metzger - Published on Nov 01, 2017
This year, southern Ontario had its wettest spring since record-keeping began in 1948. (Lars Hagberg/CP)



​It’s been understood for decades that greenhouse gases, produced largely by humanity’s infatuation with fossil fuels, are heating up the planet. However, in spite of 2017’s startling tally of hurricanes, wildfires, and other weather disasters, there remains a widespread misperception — exacerbated by poor media coverage of the climate change connection — that we’re facing a relatively minor problem that won’t hit hard for years, if ever.

This idea is wrong for all kinds of reasons, some of them profoundly alarming. However, even for those so far insulated from the worst of climate-related catastrophe, climate change is already hitting us where it counts — our wallet.

Food prices

Climate change is affecting our grocery bills, and it’s only going to get worse.

California is the largest agricultural producer in the United States, and Canada its largest export market. The six-year drought that ended this spring, and has been connected to human-induced climate change, pushed up the price of imported fruits and vegetables in Canadian supermarkets.

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If you’re a seafood lover, you’ll be concerned by the research suggesting that warming waters and ocean acidification caused by greenhouse gases will devastate Pacific salmon stocks.

Canada’s favorite pick-me-up, coffee, has always seen price fluctuations based on weather. But as that weather becomes hotter and less predictable, coffee science predicts that the areas where coffee can be grown will shrink dramatically, and prices will increase accordingly.

Want to drown your worries in a glass of vino? That will cost you more, too. This year, global wine production is expected to be down about 8 per cent, mostly because of drought in Western Europe. That estimate doesn’t include the impact of the wildfires that burned up thousands of acres in California wine country this year.

And globally, the picture is grim. A study in the British medical journal The Lancet estimated that by 2050, climate change could be the cause of over 500,000 deaths from reduction in the global food supply. And research suggests that high carbon dioxide levels also decrease the nutrients in some staple crops like rice and wheat.

Home repairs and insurance

This year, southern Ontario had its wettest spring since record-keeping began in 1948, with rainfall amounts a staggering 59.4 per cent above the 1961–1990 average. Summer was only slightly drier, and the period between April and September saw flooding across the province, from Windsor to Cornwall to North Bay and points in between.

Blair Feltmate, head of Waterloo University’s Intact Centre on Climate Adaptation, says we can expect more of this in the future.

“Why are we getting bigger storms? For a one degree Celsius increase in temperature, the air holds 7 per cent more moisture. So number one, there's more water in the air. Number two, when all that water condenses and come down in the form of rain, all the energy that went into evaporating that water comes out of the system. So now you're seeing storms with a greater volume of water and a greater magnitude of wind.”

Moreover, because these types of severe storms can pop up quickly and drop huge amounts of rain anywhere, flooding isn’t limited to homes located near lakes or rivers.

But you’ve got insurance for that, right?  Actually, only a minority of Ontario homeowners do. Pete Karageorgos, the director of consumer and industry relations at the Insurance Bureau of Canada, says that until recently, home insurance policies didn’t cover overland flooding (although standard policies do often cover flooding caused by backed-up drains or sewers).

“About four years ago, following the Calgary floods, we started to see a new need for this type of insurance. Customer demand increased following other extreme weather events, such as the Toronto storm of July 2013, which broke the rainfall record set by Hurricane Hazel in 1954.”

Add to that this year’s inundations, and Karageorgos says that as a result of climate change, “Homeowners are seeing a new reality — where the severity and frequency of weather events is increasing — and asking for flood insurance.”

The relatively good news in all this is that with more people choosing to invest in flooding coverage and more insurers offering it, the costs should drop.

The bad news is that if you live somewhere that’s experienced repeated flooding, your home may be effectively uninsurable. As Blair Feltmate explains, “What we see is a growing prevalence of an uninsurable housing market developing in communities that have experienced repeat basement flooding. The homeowners can no longer buy insurance of any type, because the risk associated with flooding is so high that insurers can't charge a premium that anybody could afford.”

Health care

Six of the 10 hottest summers in Ontario since 1948 have occurred in the last decade. Extreme heat is potentially dangerous to a significant segment of the population, including asthma sufferers, people with heart conditions, pregnant women, and older adults. The number of extreme heat days is increasing in Ontario, and they’re taking place earlier and later in the year. Apart from the human cost, this creates a greater burden on both productivity and the health care system.

Along with heat and drought come more forest fires. This year has seen record acreage burned in the western U.S. and Canada: at one point, smoke from B.C. drifted all the way to the east coast of North America

How much damage can smoke from distant wildfires cause? A study from Johns Hopkins found that smoke from Quebec forest fires in 2002 led to a 50 per cent increase in hospitalizations for pulmonary and cardiovascular problems among elderly people on the east coast of the United States — hundreds of miles away.

There’s also the mental health impact of climate disasters: research currently being conducted at the Intact Centre on Climate Adaptation suggests there’s a direct relationship between household flooding and the elevated use of anti-depressants.



If you’ve got a portfolio of stocks, mutual funds, or other investments, climate change is probably cutting into your returns. 

The credit agencies that rate securities are taking a long, hard look at the climate risks faced by companies and industries — and what they discover may have an impact on the value of the issuing companies.

There are two principal buckets of risk, the first of which is legal or regulatory. For example, earlier this year, Alberta power utilities saw their credit ratings downgraded amid uncertainty around the potential impact of provincial climate change policies. And fossil fuel companies are also vulnerable to credit downgrades, as international regulation based on climate change agreements may mean that the reserves they have in the ground (on which the value of the company is based) can never be pumped and sold. If this were to happen, the reserves would become what are known as “stranded assets” — assets that exist, but have no value.

There are also the direct physical risks posed to companies by climate change. During the California drought, as water dried up, hydroelectricity dropped from 18 per cent of power generation to just 10 per cent, leaving large — and expensive — dams as stranded assets.

Many companies have facilities or key elements of their supply chain located in areas newly vulnerable to flood or fire. Following the fires in Fort MacMurray in northern Alberta last year, energy company Suncor had to shut down operations for a month: its profits dropped, and its stock price declined.

Ultimately, all companies are to some extent vulnerable to climate change — meaning your retirement savings are, too.


Canadians enjoy playing in the great outdoors, but doing so will become more challenging and costly.

For example, climate change is associated with reduced snowfall, so future ski and snowmobile seasons will likely be significantly shorter than they are today. In anticipation of a warmer future, ski resorts are investing in more snowmaking equipment, and creating upgraded facilities for biking, hiking, and other year-round activities. Whistler Blackcomb in B.C. advertises “four-season, weather-independent innovation” and boasts that guests “won't have to stop playing when Mother Nature doesn't cooperate.”  Resorts like Horseshoe Valley in Ontario are pursuing a similar strategy, building up an inventory of warmer-weather activities to prepare for slower or shorter snow seasons. All this repurposing comes with a cost, which is passed along to the end customer.

Things aren’t looking up for summertime outdoorspeople either. Hotter weather will mean a higher likelihood of drought and more wildfires in Ontario, adding a new frisson of excitement to the annual family camping trip. And we can also expect habitat loss, so plants, birds, fish, and animals may migrate to new areas or disappear altogether if traditional food supplies vanish, or new pests and predators come into play. This process has already begun with some species, and the outcomes are uncertain. However, even the best-case scenario is bad news for those who enjoy hunting, fishing, birdwatching, or even just a walk in the woods.  

Patrick Metzger is a freelance writer who lives in Toronto.

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