The Cost of Climate Change
Annual costs for natural disasters in Canada pegged at almost $5 billion
Canada has just experienced extensive flooding in British Columbia, Ontario and Quebec. The complete cost of the disasters won’t be added up for some time; but you can bet that this past spring is going to be one of the most expensive on record. In Canada and throughout the world, we are being battered by increasingly numerous weather events, both extreme and not-so-extreme. The climate is changing.
Trying to get a handle on just exactly how much we are paying for climate change is difficult. The Office of the Parliamentary Budget Officer has tried. In its Estimate of the Average Annual Cost for Disaster Financial Assistance Arrangements due to Weather Events, released on February 25, 2016, it comes to $4.92 billion. This is the total annual cost from hurricanes convective storms, winter storms and flooding. But this, of course, does not take into account the lost productivity resulting from weather events.
The May 9, 2017 edition of Canadian Underwriter noted that in the United States, the bill for severe flooding in April would reach the multi-billion dollar range. Severe weather in America continued to be the largest factor in global insurance losses for 2017. While extreme weather or – as they like to say, weather events – continue to get worse, we in North America have comparatively little to worry about. Consider the plight of those low-lying Pacific Ocean nations that face the prospect of disappearing; if the ice in the Arctic and Antarctic continues to melt, and the oceans continue to rise.
It has been demonstrably and scientifically proven that climate change – the gradual warming of the earth’s surface – is to a very large degree driven by the fossil fuels used to heat our homes and drive our industry and vehicles. The very sad fact behind the spectre of increasing temperatures and increased hurricanes, is that we have the technology to prevent further damage.
One rewarding characteristic of humans is that we seldom throw in the towel, and so ideas that may have seemed farfetched or even ridiculous a generation ago, sometimes have their place in the sun. The green roofs of Toronto are a good example of this. In May 2009 Toronto City Council passed a bylaw that requires that new residential, office and industrial buildings have a green roof. While the idea of building roof-top gardens is as old as the hills (think of the hanging gardens of Babylon), doing so for ecological reasons is a relatively new concept.
The simple fact is that by going green you make money by saving money.
The Toronto bylaw applies to buildings that contain 6,000 square meters of floor space or more. The percentage of the roof to be green ranges from 20% for buildings with a floor space of 6,000 square meters, to 60% for buildings with over 20,000 square meters of floor space. Residential buildings shorter than six storeys or 20 meters in height are exempt. Toronto based its green roof policy on studies conducted by professors at Ryerson University, that showed potential annual cost savings of $37.1 million dollars. The largest cost-saving category was commercial building energy. The category showed a potential cost reduction of $21.56 million annually. The comfort benefit is hard to calculate, because how do you quantify mitigating the heat sink caused by our predilection for creating concrete canyons? As you might imagine, green roofs have also been cited as a partial solution for some of the flooding that has recently occurred. This is because of the green roofs’ ability to absorb rain and reduce water runoff. Oddly enough, building green roofs can also prolong their lifespan.
If we are to avoid the rapidly approaching climate Armageddon, it is vital that climate change deniers and vapid naysayers learn the real truth about green energy and efficiency. Simply put, energy efficiency is going to be one of the leading industries of the future because it makes you money by saving you money. As the Toronto study shows, green roofs save you money by reducing heating and cooling costs. Tesla, the electric car company, is now worth more than Ford. In an April 3, 2017 story CNN Money stated that Tesla was worth US$48 billion while Ford was valued at $45 billion.
Another energy-efficient way to go about saving the environment while saving money can be found in the ingenious technology of Burnaby-based International Wastewater Systems (“IWS”). IWS has developed a way to recover the heat usually lost in wastewater. Hot water from showers, baths, dishwashers and laundry goes down the drain. But IWS builds, installs and monitors closed systems that are used to heat the hot water supply in buildings. On May 10, 2017 the company announced that it had won funding and a contract to install five systems in Scotland through its wholly owned UK subsidiary SHARC Energy Systems. The contract is worth 9.8 million pounds. The five sites are the first of 750 locations targeted for conversion in Scotland.
In some ways the system is as simple as your own furnace. In the typical household furnace, natural gas or fuel oil is used to power a heat exchanger. The heat exchanger, in turn, warms the water in a radiator system, or the air in a forced air system. The genius in the IWS system was to develop a filtering system fine enough to prevent waste from clogging the heat exchanger. The system is completely sealed to ensure that there is no risk of water contamination, and continuously monitored to prevent any problems.
The return on investment (“ROI”) varies. A hospital in Boston, for example, that used electric boilers to heat its water had an IWS system installed. It cost $800,000, but the new system will save the hospital approximately $2 million per year and pay for itself within six months. IWS heat recovery systems can be installed in institutional, multi-residential, and industrial buildings. As described in a September 2016 interview with James West of the Midas Letter in the Financial Post, the payback period for residential buildings with 200 or so units is usually two to three years. If you are now telling yourselves this seems too good to be true, the real kicker is that the recovery systems have an anticipated lifespan of 40 years.
By Noel Meyer