How much will climate change cost Ontario? Even given the unknowns, the numbers are big

OPINION: A new report analyzes do-nothing, reactive, and proactive approaches to adapting provincial infrastructure. The lessons should be pretty clear
By John Michael McGrath - Published on Dec 07, 2021
The amount of climate change we allow will be the primary driver of how much we spend on adaptation. (Christopher Knox Photography/iStock)

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The province’s financial accountability officer, Peter Weltman, released a report on Tuesday morning that marks just the beginning of a monumental task (if fiscal-impact reports can be considered monuments): trying to wrap Ontario’s collective brain around the looming costs of climate change to provincial infrastructure. The FAO’s job is to inform MPPs and the public about present and future trends that will shape the province’s taxing and spending, and climate change is one of those trends — along with demographic aging and the concentration of high-paying jobs in a handful of cities — that will absolutely affect how much the government spends, where it spends it, and for what purpose.

In the simplest terms: putting precise numbers to the costs of climate change in Ontario is daunting work because Ontario is really big. And while the science of climate change is becoming more refined with every passing day, there’s still broad enough disagreement over specific questions about the effects of climate change — will Ontario see more or fewer wildfires, for example — that the FAO’s report had to exclude a number of potential climate-change impacts from its analysis because they couldn’t be modelled confidently. 

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Financial Accountability Officer Peter Weltman speaks with reporters at Queen's Park on December 6. (John Michael McGrath)

Additionally, this report is only the first in a series and focuses on the buildings owned by the province or municipalities: hospitals, schools, recreation centres, and the like. So while climate change will undoubtedly have impacts on other provincial infrastructure, those aren’t included in this accounting.

Weltman, speaking to reporters at Queen’s Park on Monday, acknowledged that the unknowns aren’t reassuring: “The big difference is that what you're buying is adapted infrastructure. While we did not cost the benefits of having adapted infrastructure in our report, I think the events of B.C. have shown what happens when your infrastructure isn't maintained in a state of good repair, fails, and then you have all those extraneous costs that need to be paid for.”

The numbers that survived the report’s focus are big enough: the FAO projects that, if the province takes no additional measures to adapt its buildings to climate-change impacts, it’ll have to spend at least $43 billion to maintain a state of good repair by the end of the century even in the rosiest, lowest-emission climate scenario. In a much warmer world where governments don’t meaningfully constrain greenhouse-gas emissions, the cost could be as high as $116 billion.

Trying to harden our infrastructure against such impacts will likely be cheaper than letting a warming planet break all our stuff: the FAO modelled two scenarios (one conservative and reactive and the other aggressive and proactive) in which the government tries to adapt its buildings and found that both are cheaper than the do-nothing approach: the reactive would add up to $35 billion in a low-emissions scenario and $91 billion in a high-emissions scenario; the proactive clocks in at $33 billion and $104 billion.

Weltman explained that, while the costs of the reactive and proactive scenarios are roughly comparable, the benefits of a proactive approach may very well outweigh the lower costs of a more conservative approach. “When I look at what's happened in B.C. — and B.C. just happens to be a recent example —it's scary, right?” he said. “And you know there are things out there that could happen and will happen, and we know we should probably do something about it." 

How much we invest in adapting to climate change is an important topic and one that government is going to need to decide on one way or another — in this case, as in so many others, not deciding is still a decision. But it’s worth putting the spotlight on something else we can glean from the FAO’s copious charts and tables: the amount of climate change we allow is going to be the primary driver of how much we spend on adaptation. In the FAO’s projections, the increment between the low-emissions and high-emissions scenarios is always many times larger than the difference between the reactive and proactive adaptation scenarios.

Agenda segment, October 6, 2021: The art of climate persuasion

This means that, while proactively hardening our infrastructure against likely climate impacts will probably be a wiser investment than doing it reactively and slowly, the wisest investment of all for the government would be to do everything within its power to keep global warming to a minimum. Even if the government chooses the most proactive adaptation policy, the difference between a low-emissions scenario and a high-emissions scenario is around $70 billion, the kind of sum that governments usually say they care about spending judiciously.

And, to reiterate, these are just some of the costs related to one narrow slice of the province’s infrastructure: the “known unknowns” are substantial and serious enough that we should almost certainly treat these estimates as the minimum costs we’ll see this century. The FAO will provide more reports on a wider range of provincial infrastructure in the new year, and we’ll have an even better idea of the costs, but Ontarians should be wary of anyone claiming that action to prevent climate change is too expensive — because the costs of inaction will surely be higher.

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