Environment-related risks are the most likely and among the most impactful global risks of 2019, says a new report by the World Economic Forum, issued just as world leaders gather next week for the annual conference.
The survey, completed by roughly 1,000 experts and business leaders in preparation for the meeting in Davos, Switzerland, lists extreme weather events, natural disasters and environmental policy failure among the greatest hazards for 2019.
“Of all risks, it is in relation to the environment that the world is most clearly sleepwalking into a catastrophe,” the WEF report said, highlighting the strong relationship between intensity and likelihood of severe events and the failure of government climate action last year.
Alison Martin, group chief risk officer at Zurich Insurance Group who collaborated on the WEF report, is urging businesses to develop a timely climate-change strategy.
In Canada, forecasts say up to $1-billion is needed to ensure the country’s economy runs with optimal productivity and efficiency, and Ms. Martin said large infrastructure gaps can provide an abundance of economic opportunity for businesses to invest in low-carbon energy solutions and adaptable infrastructure to handle more frequent extreme weather.
“Against this backdrop, we strongly recommend that businesses develop a climate-resilience adaptation strategy and act on it now,” she said.
The year 2018 brought record-setting wildfires to British Columbia, scorching summer heat waves that killed more than 90 people in Quebec, and a disastrous tornado that levelled a neighbourhood in the Ottawa area.
The latest numbers from the Insurance Bureau of Canada (IBC) show that insured damage for severe weather events across Canada reached $1.9-billion in 2018, and the severe windstorm in December that impacted more than 750,000 British Columbians caused more than $37-million in insured damages alone.
“What we saw in 2018 is that it doesn’t take a single large event to reach the billion-dollar mark,” said Craig Stewart, vice-president of federal affairs for the IBC. “The accumulation of smaller events is driving costs higher for insurers, taxpayers, businesses and government.”
Mr. Stewart says that these numbers are only a fraction of the equation. He estimates that every dollar of insured losses is equivalent to three dollars of uninsured losses. These additional costs often land on the taxpayer.
“Too often do we leave climate action to political leadership,” said Mr. Stewart. “The reality is that we all have to do our part. Financial sectors must deploy capital, businesses need to invest in municipalities need to focus on resilience and universities need to commercialize research.”
Costly environmental events prompted the Canadian government to launch a 10-year, $2 billion Disaster Mitigation and Adaptation Fund in 2017 to help communities better prepare for extreme weather and natural disasters and support large-scale infrastructure projects like wildfire barriers, federal Environment Minister Catherine McKenna said in an interview.
She said the rollout of Canada’s climate plan has already had a huge impact in reducing the nation’s carbon footprint and has established the country as an international leader in the fight against climate change.
Canada’s carbon emissions have dropped since 2014, but a recent report by the global organization Climate Transparency says the country continues to produce the most per-person carbon emissions among G20 economies.
Ms. McKenna says the transition to a greener economy is going to take time, but that even with pushback from some provincial governments, Canada’s climate plan is moving forward.
“We need to get serious, and be ambitious if we want to tackle climate change effectively,” Ms. McKenna said. “As a nation we need to understand that the cost of inaction is much more significant than the cost of action.”