Global Warming
Last Update: 12/02/2001
Global Warming
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Economics
ECONOMIC IMPLICATIONS Greenhouse gas emissions could present a significant negative impact on the global economy. The IPCC has predicted that damage related to climate change could cost up to 2 per cent of the GDP in developed countries.15 This figure can be expected to reach substantially higher levels in Canada, a nation heavily dependent on its natural resources for economic prosperity. The United Nations Environmental program has forecasted global warming will cost the world $300 billion annually by the year 2050. According to the Chartered Insurance Institute, several critical economic sectors will be threatened globally, with tourism, construction, agriculture, fishing and forestry operations among those sectors experiencing detrimental impacts.16 In
Canada, we are currently experiencing several observable changes as a result of
global warming. Increased ocean
temperatures on Canada’s West Coast have weakened the economically valuable
salmon species, leading to observed decreases in spawning survival rates.
The 1997 Fraser River sockeye salmon run experienced a 76 per cent
mortality rate, a substantial increase from typical average levels of 5 per cent
mortality. Researchers predict that anticipated water temperature
increases resulting from global warming, will possibly eliminate all suitable
habitat for Pacific sockeye salmon. We
are also observing record-lows with respect to the Great Lakes and St. Lawrence
Seaway water levels. Lowered levels
translate into ships having to reduce their cargo carrying capacity in order to
clear bottom and successfully navigate some of the water-restricted seaway
systems. Reduced loads will force additional shipments and decreased efficiency
with respect to time, leading to additional incurred transportation costs. Warmer
temperatures have also meant dryer seasons, which have lead to a doubling in the
number of northern Canadian boreal forests affected by forest fires, insects and
disease, when compared to previous decades.17
At the local level, we have recently experienced one of the poorest
pumpkin harvests in years, and a reduction in the length of the ‘fall colours,’
both of which have been attributed to global warming effects.18 Without
the consideration of intervention practices on our current activities, we can
anticipate the development of a number of additional economic risks in the near
future. We can expect to observe
increased numbers of forest fires and elimination of forested lands, thus
decreasing overall timber production and reduction in one of Canada’s most
economically vital exports. More
specifically, we can expect to see some of Alberta’s aspen parklands and
boreal forests turn into grass and shrublands.
Increased
temperatures, dryer soils, and increased insect infestation will all contribute
to decreased crop yields in the Canadian Prairies by an estimated 30 per cent,
affecting another one of the primary Canadian exports, in the form of wheat.
We
can anticipate an increase in the number of insurance claims resulting from
global warming related occurrences. Increased insurance claims translate into increased overall
costs and premiums that will cascade down from the corporate sector to the
consumer level. Prior to 1988, the
Global Insurance Industry had never experienced a claim greater than US $1
billion for any single natural disaster. Yet
between the years of 1988-1996, 15 separate environmental events that can be
attributed to global warming, occurred, forcing the closure of several insurance
companies and lead to an escalation in average global insurance premiums.17
Canada has been portrayed as one of the “greenest” countries with respect to its appreciation and respect for the environment, yet the literature suggests the contrary: · Canadians consume more energy per capita than any other country; ·
Canadians consume more total energy than the 700 million people in all of
Africa; ·
Canadians are the third largest per capita producers of greenhouse gases
in the world; ·
Canada is the eighth largest producer of CO2 in the world, yet Canadians
only make up 0.5 per cent of the world’s entire population; ·
Canadians spend $75 billion annually (10 per cent of our GDP) on energy
to heat our homes, offices, operate our cars, factories and appliances.17 Canadian
Economic Policy
In
1997, the Kyoto Protocol established guidelines, which committed industrialized
nations to reduce greenhouse gas emissions by an average of 5.2% from 1990
levels by the years 2008-2012.15 In July 2001, at the COP-6, the world leaders charged with
finalizing the protocol including Canadian representatives reached an agreement
on the guidelines established in Kyoto. Prime
Minister Jean Chretien and Deputy Prime Minister Herb Gray committed to ratify
Canada’s involvement in the Kyoto Protocol, with Ottawa expected to sign the
procedure into law by 2002. In fact, Canada actually agreed to commit to a reduction in
GHG emissions by a level of 6 per cent under the terms of the protocol.19 Yet
the Liberal government recently demonstrated actions that contradict their
intended goals. Chretien and Natural Resources Minister Ralph Goodale recently
announced an expansion in Alberta oil and gas exports to the United States
markets to meet the increased demand for fossil fuels south of the border.
A single oil sands production facility with an average capacity of
150,000 barrels of oil per day is the equivalent of adding nearly 1.5 million
cars to our highways. Transportation
usage and home heating are the primary sources for oil and gas consumption,
contributing to over half of Canada’s total greenhouse gas emissions.
We have observed growth in Canadian oil and gas sector emissions by
almost 20 per cent since 1990, with the oil and gas industry accountable for 15
per cent of Canada’s entire annual greenhouse gas emissions.
Canada has displayed an increase in overall energy consumption by 13 per
cent, and increased emissions by 1.5 per cent annually since 1990.
Most importantly, greenhouse gas emissions for 2010 are slated to exceed
1990 levels by nearly 30 per cent.17 How
is it possible for Canada to adhere to reduced GHG emissions standards while
expanding the oil and gas supply and directly contributing to our dependence on
fossil fuel consumption? Research
and surveys have revealed that the Canadian public is eager to adopt to clean,
renewable energy technologies in order to contribute to GHG reductions however
the majority of people feel restricted due to limited accessibility, knowledge
and affordable energy options and alternative energy sources. Canada
is currently lagging in environmental technological change and has failed to
recognize the economic opportunities that exist in new clean energy industries.
The Japanese government has a clearly stated a goal of dominating the
world photovoltaic market, and have realized the economic opportunities related
to environmental change. Japanese
auto manufacturers like Honda and Toyota have already released
‘gasoline-electric’ hybrid products that operate primarily on electric
cells, with gasoline as an alternative energy source.
None of the ‘Big Three’ North American auto companies plan on
releasing ‘alternative-powered’ products in the near future.20, 21 At
the time of writing, the CoP-7 was convening in Morocco with the primary goal of
finalizing the Kyoto Protocol. Ratification
of the Kyoto Protocol by Canada could set a global ‘example’ if put into
action. As Canadians, we should
demand the emergence of specific policies and technology related to energy
efficiency and renewable energy production, in order to achieve the required
protocol targets. Provincial
governments and key industrial sectors must support Ottawa in its efforts to
ratify the protocol and then jointly implement procedures to reduce greenhouse
gas emissions. Future policy must
ensure that the forestry and farming industries will have the right incentives
in order to adhere to climate change policies, and restrictions must be legally
enforced at the public sector level. In addition, there is a sense of urgency for the Canadian
Government to continue to address the issue of support to developing countries
with respect to greenhouse gas emissions and global warming.
Currently, Ottawa intends to join other developed countries in foreign
climate change assistance by contributing to the overall funding of US $410
million per year by 2005.19 At
the community level, the City of Hamilton has developed ‘Vision 2020’.
This project exemplifies a community’s push for socio-economic policy
that incorporates ‘cooperative’ processes, involving citizens, businesses,
government, education and labour. The
fundamental goals of the program with respect to global warming are to reduce
consumption of non-renewable energy sources, and to eliminate excessive and
wasteful usage of energy. They seek
to change transport modes and to ultimately “improve air quality to ensure the
City has the best air quality of any major urban area in Ontario,” and “to
reduce greenhouse gas emissions by 20 per cent from 1990 levels”.22
This undertaking provides an excellent example of what should be
considered by every major community, and exposes the basic type of environmental
awareness and implementation required throughout, both at a regional and
national level. |