Kathy Bardswick is President and Ryan Ness is Adaptation Research Director of the Canadian Institute for Climate Choices. In this feature interview, they talk about their new report on climate impacts and adaptation, the close connections between adaptation and mitigation, and how to get rolling on climate action while the detailed data is still taking shape.
The Energy Mix: We’ve heard federal cabinet ministers over the last five years speak genuinely and eloquently about the front-line impacts of climate change, but the government has still been very slow to take action that matches up with the scale of the climate emergency. What adaptation and mitigation measures would you like to see in the next federal budget while they work toward more data and better disclosure?
Ryan Ness: We did see quite a bit on the mitigation front in the recent Fall Economic Statement. There was very little explicitly about adaption. But we think there are some real opportunities to highlight now on the adaptation side, and to elevate adaptation to the same level of focus and resources as mitigation.
One example is the integration of adaptation into the home and building retrofit programs that are being talked about. It’s a great investment, a great opportunity on the mitigation side, but potentially a lost opportunity if the chance to build resilience into those upgraded, retrofitted buildings is not taken.
Also, the only significant source of real, dedicated infrastructure adaptation investment, the federal Disaster Mitigation and Adaptation Fund, was massively oversubscribed in its first round. It’s important to recognize the scale of that need when designing the next phase of that program.
And national and provincial building and infrastructure codes and standards have to be upgraded much more quickly to reflect climate change. It’s starting to happen, but it’s just a trickle and far too slow.
Kathy Bardswick: We have to stop looking at things in isolation. There’s the federal focus, then provincial and municipal requirements, and they’ve got to be better coordinated. We’ve got to be able to leverage efforts across those levels of government as effectively as we can, to use our financial, human, and time resources as wisely as possible.
The Mix: The COVID-19 pandemic has shown that nothing else in a society or an economy works if we can’t count on the basic health and safety of the population, and sources from the Lancet Countdown to the World Meteorological Organization to the International Red Cross have data to draw the parallel to the climate crisis—all of them in the last couple of weeks. How does the pandemic experience reinforce your argument for action now while the more detailed adaptation and risk analysis emerges?
Bardswick: It’s absolutely essential that we focus on keeping our communities and Canadian citizens safe and address the very real, demanding, historic economic challenges Canadians are facing in the recovery. However, we also need to recognize that the issues associated with our health and well-being are the very same ones that will play out with a changing climate.
We know there are tough implications associated with climate change. So as we build the capacity to keep Canadians safe and healthy post-COVID, it’s irresponsible not to factor in the impact of climate on those solutions and buildouts. The same holds true for our ability to anticipate those impacts with resilience strategies before the crisis hits.
The question of whether there will be a next pandemic is misleading. We know there will be crises in our future. There’ve been crises in our past. And unless we stop ignoring the writing on the wall, we’ll be continually trying to respond after the fact, which is never as effective or efficient as anticipating what that response needs to look like and getting ahead of the next crisis. If we refuse to learn the lessons of COVID-19, we’re being irresponsible as a society and failing to build the resilience Canadians need and want.
I know there’s concern that the energy and time people are spending in response to the immediate health concern will draw attention away from climate issues. But you can’t separate them. We have to stop seeing them as separate and distinct and commit to recognizing the interdependencies.
Ness: The pandemic has shown us that disastrous events can happen at any time, and also that on the positive, flip side, that preparation and adaptation steps are not just long-term propositions. They can start paying off immediately by getting us ready for the next weather-related disaster.
Bardswick: And even though the long-term health implications of the pandemic are still not well understood, we know those impacts will be with us for years to come in the folks who’ve been exposed to this virus. To the extent that the impacts of climate change deteriorate our health and our ability to respond, think of the pollutants associated with wildfires as an example, we need to recognize that the two issues are interdependent. You can’t deal with one in isolation from the other.
Ness: That’s a great analogy: Some people won’t ever be the same after they’ve been affected by COVID, and some communities are never the same after they’re hit by a weather-related disaster…
Bardswick: …and we tend to overlook the significant mental health impacts that result from both. I was in the insurance industry for decades, and I can tell you the heartache and the emotional toll in communities that lived through the devastation [of climate disasters]. To see people lose everything, lose so much of their lives, is just heartbreaking. We haven’t tracked those costs, but I can tell you they too are devastating and long lasting.
The Mix: We’ve just carried a story about climate-related mortgage risk in the U.S., where there’s concern that public lenders won’t be able to protect their investments without affecting marginalized households and communities. How can Canadian governments and lenders address adaptation issues through an equity lens?
Ness: We know Canada has a similarly high proportion of properties at risk, with 10% or 1.8 million homes at very high risk of flooding, according to the Insurance Bureau of Canada. We have a different public lending regime for mortgages, but [Canada Mortgage and Housing Corporation] and private lenders would be exposed to defaults as a result of flood damage or dropping values in the same was as public lenders in the U.S.. The newly-announced Task Force on Flood Insurance and Relocation is taking the proper approach to the problem by looking at low-cost insurance options and fair relocation programs for homeowners at high risk of flooding, rather than letting the market dictate what can be insured and who can receive a mortgage in the future, because there’s definitely the possibility that those market-driven outcomes would have a disproportionate impact on marginalized populations.
We don’t know as much in Canada about whether marginalized populations are disproportionately exposed to flood risk as in the U.S., but at least some members of marginalized groups would be really challenged to deal with the loss of mortgage or insurability of flood-prone properties. The Task Force is looking at programs that we hope will be fair and equitable in the price they offer and create more fair outcomes than a purely market-driven approach.
Bardswick: You can’t know the best way to respond to an issue when you don’t have sufficient information. And this issue of an equity lens is not well understood. We don’t have very good data, and until we commit to better understanding the underlying issues, we will be patchworking our solutions. So I really encourage governments and private players, investors, lenders, to make sure we understand who’s most impacted, who are the marginalized participants in society, and make sure our responses are effective.
As an example, in some of the materials on preparing yourself as a homeowner for floods and fires, one of the suggestions is to have a financial plan and make sure you’ve got three to six months of liquidity set aside for emergencies. You tell me how many people who are living from paycheque to paycheque can even think about setting aside enough cash for three to six months! It’s impossible. It’s ridiculous to suggest it. So even some of the fundamental perceptions around the role of the homeowner in building resilience don’t work. We really need to better understand how this is playing out and what kinds of response will work, and that starts with getting the data and really questioning what we’ve historically assumed.
The Mix: How new is any of this to the private investors whose decisions largely drive the response to climate risk—and, for that matter, drive the fossil fuel projects that account for the largest share of Canada’s emissions?
Bardswick: Having spent many years in the insurance industry, even those who should be really well equipped to know don’t necessarily have all the information they need, and don’t understand the extent to which they’re exposed to these crises and impacts. We’re heading into 2021 having experienced in the last decade some of the most significant water-related events in the country’s history, and we still don’t understand our exposures or the response to the extent we need to.
The immediate response to this report from the investment community, the insurance community, indicated to me that there is a thirst for that more detailed understanding. Until we commit to more robust disclosure, we’re not going to know where some of these challenges lie. So I would argue that we should follow the UK’s lead to mandatory disclosure.
Ness: At the same time, a major takeaway from the report is that we need to take action in spite of gaps in our knowledge. We can’t wait for perfect understanding in order to act. Every day we wait is a lost opportunity to benefit from the investment in adaptation, so we need to act in parallel with improving our knowledge base.
The Mix: Does that also apply to stranded asset disclosure for fossil fuel projects?
Bardswick: Stranded assets are getting more attention, but I don’t think we really spend the same time and energy in this country trying to understand how infrastructure is affected by the changing climate. You’re seeing more response to the stranded assets scenario. You’re seeing investors backing off, restrictions going in, and sustainable investment frameworks being talked about. That doesn’t say there aren’t still decisions being made that raise questions, depending on how long we think the decarbonization transition will take. But that is getting more attention and time now than the conversations about infrastructure, and whether we’re spending money appropriately on assets that are long-tail in nature and need to reflect changes in climate.
The Mix: The insurance industry appears to approach the climate crisis primarily as an adaptation issue—which makes perfect sense for a business that stands and falls on its ability to predict risk. But it’s hard to imagine anyone successfully adapting if average global warming exceeds 2.0°C, or maybe even 1.5°, given the impacts we’re already seeing at 1.2°. Is mitigation the new adaptation?
Bardswick: I take exception to the first statement. It isn’t correct—absolutely they are focused on adaptation, for the obvious reason. They’re doing it in part because they believe the level of understanding and discourse needs to be raised to take into account adaptation, but that can’t happen in isolation. The insurance industry also recognizes the need for mitigation strategies that do everything in their power to keep the temperature rise below 2.0°C. We can’t in any sensible way adapt ourselves out of a changing climate that goes beyond that. The insurance industry understands that, and is involved in mitigation strategies that they believe in just as much as adaptation.
But the insurance industry is the canary in the coal mine for what happens when you don’t elevate the adaptation and resilience conversation at the same time. We’re locked into a changing climate whether we like it or not, and we absolutely have to respond to that. So the industry is trying to elevate both at the global level, to ensure they they’re adapting to the realities of a changing climate, contributing to mitigation efforts, and looking at how to address both issues and deal with them in a more integrated way.
You will also see investment strategies within the global insurance industry. The industry oversees many trillions of dollars in assets, and they’re taking steps to reflect the need for sustainable decision-making in those investments.
Ness: We’re seeing this in action lately with some really interesting examples worldwide of insurers now declining to underwrite or invest in industries and projects that are major greenhouse gas emitters.