A Canadian advisory panel on business and the environment is warning that greenhouse gas emissions could cost the Canadian economy up to $43 billion each year by 2050 if the government does not come up with a domestic plan to tackle global warming.
The National Round Table on the Environment and the Economy submitted its report to the government and the study has been hailed as the first of its kind to analyse Canadian trends in the growth of greenhouse gas emissions, population and the economy, in the context of climate change science.
"Paying the Price: The Economic Impacts of Climate Change for Canada," warns that Canadians could end up paying the price if governments fail to acknowledge the links between human activity, greenhouse gas pollution and global warming.
Failure to react could trigger major flooding in coastal cities, effects on human health and dramatic changes in forestry and other sectors, causing significant damage.
"Ignoring climate change costs now will cost us more later," the report said.
Environment Minister Peter Kent told the House of Commons the government was committed to reduce greenhouse gases in Canada to 1990 levels within the next 10 to 15 years. He also added the government had allocated $58 million in funding over two years to help Canadians adapt to climate change.
"Today's report merely echoes what our government has long recognized," Kent said. "And that is the importance of adaptation to climate change."
According to the report, Canada could pay up to $5 billion per year to deal with climate change effects within 10 years, before reaching a range of $21 billion to $43 billion by 2050.
The report highlights the need to assess long-term decisions and strategies, especially in areas such as coastal development, infrastructure and forest management.
"The highest costs result from a refusal to acknowledge these costs and (to) adjust through adaptation," the report noted.
David McLaughlin, head of the advisory panel, said findings from the report will prove important for the Canadian government.
"Little attention has been paid to the cost of inaction, to what economic damages could accrue to Canada and Canadians as global emissions rise and climate change plays out," said McLaughlin.
"Our report also shows that adapting to climate change makes economic sense. It can lower the costs of climate impacts by preventing damage, saving money and lives, " he added.
The study also seem to back a previous British government report by economist Nicholas Stern, who warned that climate change could provoke the greatest market failure ever in the global economy.
In 2006, Stern warned a failure from governments to tackle climate change would lead to increase flood risks from melting glaciers, crop shortages in Africa and rising sea levels that would cause 200 million people to become permanently displaced.
The reports also saidup to 40 per cent of species could face extinction, and explained that extreme weather could reduce global economic output.
If temperatures rise by five degrees Celsius, up to 10 per cent of global output could be lost and in the worst-case scenario global consumption per head would fall 20 per cent, the Stern report also asserted.
Now the Canadian report also warns of huge economic costs from scenarios in which average global temperatures rise higher than a threshold of two degrees Celsius.
"Such rapid climate change and resulting impacts are beyond humanity's collective experience," said the report. "Not only that, these impacts will likely never be fully anticipated, with surprises likely looming on the horizon ... If catastrophe occurs, then between 5 per cent and 25 per cent of GDP is expected to be lost."