Climate change is one of the most pervasive and relentless issues facing global economies and ecosystems (IPCC, 2019). Even in the face of unprecedented events such as COVID-19, the unrelenting power of extreme weather will continue nonetheless. In response, Canada has developed standards and guidelines, with support from such organizations as the National Research Council and Standards Council of Canada, to mitigate against some of the most costly risks in Canada, with flooding topping the list.
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Flood mitigation strategies are well developed, and yet the operationalization of such practices is largely lacking. Adaptation measures need to be deployed coast-to-coast, allowing municipalities to mobilize Canadians into action against irreversible climate change. Before turning to means to limit flood risk, environmental threats and financial costs must be quantified to gain a more comprehensive understanding of this risk.
There is no better witness to the financial costs associated with extreme weather than the Property and Casualty (“P&C”) insurance sector, where the impacts of a flood, fire, wind, etc., can be tallied almost instantly (Moudrak et al. 2017). According to the Insurance Bureau of Canada (IBC), the economic costs of extreme weather disasters have soared by 400 per cent since the 1980’s. Figure 1 profiles annual catastrophic insurable loss claims for Canada (i.e., a “cat loss” is any event such as a flood, fire, hail storm, etc., that triggers $25 million or more in insurable losses). Losses ranged from $250-$450 million during 1983-2008, while losses averaged $1.8 billion a year from 2009, onward. IBC confirms $2.1 billion worth of catastrophic losses were paid out, Canada wide, in 2018 alone – $1.2 billion due to wind/tornado/hurricane, $500 million due to flooding/rain storms, and $400 million due to hail. Note that the losses presented in this figure are normalized for inflation ($2019), and per capita wealth accumulation – thus the horizontal axis presents a comparison of “apples to apples”.
Further evidence of the growing costs associated with extreme weather is evident in escalating Disaster Financial Assistance Arrangements (DFAA) payments made by the Federal Government of Canada – these are funds that are transferred from the federal to provincial or territorial governments, principally to provide relief when the costs associated with natural catastrophes are exceptional. Federal natural-disaster bills (2019) averaged more than $430 million per year – with an average annual disaster clean-up of the last five years being $360 million – three times the average costs in the five years before that. These amounts are substantially in excess of the nominal DFAA program budget of $100 million (PBOC, 2016).
From flooding alone, the United Nations projects global damages could amount to $27 trillion worth of losses per year by 2100, and account for a 2.8 per cent drop in global Gross Domestic Product (GDP). GDP tends to fall short of incorporating environmental factors into its valuation and most institutions have yet to seriously investigate how extreme weather events, caused by climate change, truly impact capital markets.
A standardized risk-based assessment including impacts from severe weather events and externalities must be incorporated into GDP calculations allowing for a more realistic representation of economic performance. As an example: under current GDP calculations, rebuilding following storm damage, that could have been averted had adaptation occurred, has a positive influence on GDP. This is a “false economy” measure – i.e., this was money that suffered an opportunity cost, as it is now unavailable for building hospitals, roads, schools, etc.
Efforts to deal with these costs will become even more challenging alongside COVID-19, thus highlighting the importance of risk mitigation and the real cost of inaction. To limit these debilitating costs going forward, Canadian homeowners, businesses and municipalities must adapt to severe weather events, independent of the limitations that COVID-19 (and any other yet unseen stress) might lend to that mission. As challenging as this may appear, there is good news.
Canada has taken positive strides to develop standards and guidelines to limit flood risk at the level of the home, existing and new community design. Beginning with homeowners, simple adjustments in and around the home can be made to reduce damage in practical and cost-effective ways. Actions outside of the home to limit flood risk are as simple as; removing debris from storm drains, cleaning out eaves troughs, and installing plastic covers over window wells. Actions within the basement include; keeping floor drains clear, cleaning backwater valves twice per year, and sump pumps should be tested and supported by a back-up battery supply. Click here for more steps to reduce flood risk at the level of the home, most of which can be completed by residents themselves, in less than 1 day, for under $250.
At the level of limiting the flood risk of existing communities, actions include; proactive maintenance of flood control structures, re-grading of lots and roadways to direct water to safe locations, and constructing new and/or upgrading stormwater storage facilities. These proactive measures can be used to significantly reduce the use of current protection measures, such as sandbags, which are typically a reactive last-minute effort to protect against flooding. In regards to new community design, municipalities can work with home builders to incorporate flood resilience into the design of developments through such efforts as: not building on flood plains, not directing drain and sump pump discharge to sanitary sewers, public spaces should direct runoff away from residential properties, and wastewater pumping stations should be located in areas where they will remain operational during extreme weather events.
Clear direction on mitigating flood risk is no longer the challenge for Canada, it is the operationalization of such practices that cannot happen fast enough.
It is difficult to project how severe weather events will continue to intensify and how associated impacts will affect future economic, social, and environmental conditions. What has been agreed upon though is that these weather events will continue to intensify. As Canada heads into another flooding season, it is essential that we demonstrate the same unity and commitment to adaptation measures as we have during the global pandemic. Standards and guidelines must be deployed immediately, and with urgency, across Canada to protect all communities at risk, as no one is immune.
Kathryn Bakos is the director of climate finance and science at the Intact Centre on Climate Adaptation within the University of Waterloo’s Faculty of Environment.
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