Seven Canadian industries most at-risk from climate change

A number of industries in Canada are expected to be impacted by climate change.

Based on information in a report from the Intergovernmental Panel on Climate Change (IPCC), published in early November, most sectors of the North American economy have been affected by extreme weather. Some industries are also attempting to mitigate risks and adapt through improved infrastructure and price structures that offer companies discounts for these efforts.

Here is a list of key Canadian sectors that will feel the pinch in years to come:

AGRICULTURE

Increasing temperatures can result in higher crop yields in the short term, but extreme weather such as droughts, extreme heat and storms can also cause crops to be wiped out. Yields from some sectors, such as grain, livestock and dairy, also decline amid rising temperatures, the report states. Higher temperatures can affect quality of crops such as wine grapes, wheat, fruits and nuts. The report says heat-induced livestock stress could also reduce milk production.

ENERGY

Solar panels

A worker mounts 320 square metres of solar panels on the roof of a farmstead barn in Binsham near Landshut, Germany. March 21, 2012.

With global warming, demand for air conditioning in the summer is expected to rise, while demand for heat in the winter will drop. Extreme weather also poses risk to the energy system, the report states. For example, the 2013 flood in southern Alberta led to power outages across the region. Higher temperatures and a variable climate can have a negative effect on renewable energy production. The report says changing cloud cover can reduce solar energy production, while droughts can reduce water availability, which impacts biomass production and hydroelectric power.

TRANSPORTATION

Loading cranes

Loading cranes at a shipping terminal in the harbour in Hamburg, Germany, Sept. 18, 2014.

Higher temperatures, heavier rains, drought, sea level, and storm surge could affect transportation and infrastructure. The report says the greatest risks would be to coastal transportation infrastructure. Declining water levels in the Great Lakes would increase shipping costs by restricting vessel drafts and reducing vessel cargo volume, the report states. Higher extreme temperatures could increase rutting and related maintenance and rehabilitation costs. The report says aging infrastructure will be particularly vulnerable to damage from extreme weather events and climate change.

MINING

Mining operation

Heavy equipment works on a tailings pond at the Suncor tar sands operations near Fort McMurray, Alberta, September 17, 2014.

Climate change is considered “an emerging risk,” for mining operations, the report states. Drought-like conditions limit the water supply needed for production and can increase dust emissions, which are costly to manage. An increase in heavy rains also threatens to overflow tailings ponds, which can harm the environment and result in costly cleanup efforts. There’s also the threat of damage to company infrastructure from extreme weather events. “Climate change impacts that affect the bottom-line of mining companies (through direct impacts or associated costs of adaptation), would have consequences for employment, for both the mining sectors and local support industries,” the report states.

MANUFACTURING

Robotic arms

Robotic arms spot welds on the chassis of a Ford Transit Van under assembly at the Ford Claycomo Assembly Plant in Claycomo, Missouri, April 30, 2014.

There hasn’t been much focus on the impacts climate change could have on the manufacturing sector. However, the report says it could be among the most sensitive sectors, since weather affects the supply, production and transportation of goods. Flooding in Thailand in 2011, for example, created parts shortages for North American auto manufacturers. Hurricanes in the United States have disrupted manufacturing activities across North America. The report says droughts could put stress on the water supplies manufacturers rely on. Extreme heat also impacts worker safety and productivity.

CONSTRUCTION AND HOUSING

Construction cranes

Construction cranes to build condominium buildings are seen in front of the CN Tower in Toronto, Dec. 5, 2012.

Climate change and extreme weather are a major threat to the construction and housing sector. The report cites insurance company data showing a “significant increase” in severe weather damage to buildings and other infrastructure in recent decades. Changes to design and construction of buildings to help mitigate the potential damage “are often prohibitively expensive,” the report states. That said, the housing and construction industries are adapting to climate change by building and designing more energy efficient structures.

INSURANCE

Flooded houses

A group of houses are surrounded in flood water in High River, Alta., south of Calgary, June 23, 2013.

Property insurance and reinsurance companies in Canada and the United States have seen a spike in weather-related damage claims in the past few decades. “Severe weather and climate risks have emerged over the past decade as the leading cost for property insurers across North America,” the report notes. That has led to higher prices for insurance. There are some areas that insurance companies will no longer cover, including some land or property in flood zones, for example. Severe weather insurance damage claims are expected to increase significantly over the next several decades, the report notes.

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These sectors are expected to feel the biggest economic pinch in years to come