The economic impact
of climate change in Canada

JBA has been working with Professor Jason Thistlethwaite and his team at the University of Waterloo since 2016 as part of our ongoing commitment to support work in university and research institutes.

The research team, including Andrea Minano (PhD candidate), Dr Daniel Henstra, Dr Daniel Scott and Jordan Blake, have just published an insightful paper highlighting the financial impact on Halifax, Nova Scotia, resulting from increases in climate change-induced flood risk. The paper is one of only a few published that explores the economic impacts of climate change.

Paper insights

We provided the research team with our high-resolution JBA Canada Flood Map and Canada Flood pricing data™ (formerly known as Annual Damage Ratio (ADR®) data), with the project exploring local-level climate change impacts on Halifax.

The team used our hazard data within Guy Carpenter’s G-CAT® model and made climate change adjustments using climate-adjusted intensity-duration-frequency curves (IDF) that are available across Canada. The study area was intentionally selected to give a more evident relationship between precipitation and flood.

From JBA’s perspective, this work demonstrates several valuable conclusions. 

Raising awareness about the importance of climate change when assessing economic impacts

This project reports some substantially large changes in average annual flood loss predicted by 2100 under high emissions scenarios in the Halifax area. This highlights the need for careful flood risk management in the future.

Insurers and reinsurers are likely to be more interested in shorter time scales and the study demonstrates that, by 2050, average annual flood losses are anticipated to increase by just under 50%.

This is something that the insurance industry is likely to be concerned about and may seek to consider in future business operations.

The importance of understanding present day risk at a high-resolution

Loss calculations within this project were based on building footprints and analysis at this level of detail requires high-resolution hazard data. Without it, a basic assessment to determine the number of properties affected by flood hazard could be under- or over-estimated.

This would lead to substantial uncertainty in the present-day loss estimated before climate change is even considered.

The benefits offered by using a probabilistic catastrophe model to explore climate change impacts

There a number of benefits that come from using a catastrophe model for climate change research, which include:

(1) the inclusion of an event set that allows the simulation of a large set of plausible events representing future climate, including extreme events that are not found within historical data

(2) catastrophe models give users an aggregated view of future risk, for example the annual average loss, as well as results at a higher spatial resolution (e.g. postcode level) that indicate areas that are more sensitive to climate change.

Future collaboration with the University of Waterloo

JBA look forward to a further collaborative research project exploring additional climate change impacts in Canada, led by the University of Waterloo. This project is funded by a successful MEOPAR grant application and we will model and map climate change flood risk in selected Canadian cities using new and existing methodologies.

For more information about our global flood data, Climate Change Analytics, or our climate change research programme, get in touch today.

For more information about the work at the University of Waterloo, please contact Dr Jason Thistlethwaite.

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