Pollution cost Canada $2 billion in Lost Labour Output alone

The June 2017 report, Costs of Pollution in Canada: Measuring the impacts on families, businesses and governments reviews and synthesizes existing studies to produce the most comprehensive assessment of pollution and its costs  in Canada to date. Some quick facts: the cost of climate change-related heat waves in Canada is estimated to have been $1.6 billion in 2015; Smog alone cost Canadians $36 billion in 2015. But the report also provides detailed estimates, organized in three categories: 1.  Direct Welfare Costs: (Harm to health and well-being such as  lower enjoyment of life, sickness and premature death); 2.  Direct Income Costs – (Direct out of pocket expenses for families (e.g. medications for asthma), businesses (e.g. increased maintenance costs for buildings) and governments (remediation of polluted sites); and 3. Wealth impacts.

Direct Welfare Costs of pollution, the most studied and understood,  are estimated as at least $39 billion in 2015, or about $4,300 for a family of four.  The Direct Income Costs   that could be measured amounted to $3.3 billion in 2015, but the study cautions that this many important costs could not be measured, and full impacts on income were likely in the tens of billions of dollars.  In this category, the study estimates  Lost Labour Outputs, using a metric derived from the 2016  OECD study,  The  Economic Consequences of Outdoor Air Pollution.  The OECD estimates outdoor air pollution to cost 0.1% of national GDP, which, when applied to Canada’s  2015 GDP of approximately  $1,986 billion, implies a costs of about $2 billion in lost labour output alone. And finally, Wealth impacts, or costs on value of assets , are said to be the least understood of pollution costs, about which, “We simply do not know how much pollution costs us in terms of lost wealth”.

Costs of Pollution in Canada: Measuring the impacts on families, businesses and governments was prepared by the International Institute for Sustainable Development (IISD), with funding from the Ivey Foundation; the full report is available in English- only. Summaries are in English  and French.Short  videos were derived in cooperation with the Conference Board of Canada to focus on key topics:  e.g. extreme weather, contaminated sites, and smog .

Productivity Loss due to Workplace Heat Stress: an Issue for North America, too

In an article appearing in Our World, a publication of the United Nations University, author Tord Kjellstrom argues that economists need to consider the impact of the physiological limits of people exposed to ambient heat when they work.

His article reviews the literature to date on this issue, and contends that climate change is resulting in huge financial losses because of reduced labour productivity: estimated in 2012 as approximately US$2 trillion globally by 2030. High temperatures are already having an impact in tropical and sub-tropical countries, as well as the southern U.S. and Europe, and Australia.

How relevant is this to North America? In 2014, as part of the Risky Business project, the American Climate Prospectus included a chapter on labour productivity, which projected that heat-related losses of labour productivity in 2050 and 2090 in the United States would be the largest actual economic cost of climate change – amounting to approximately 0.2 percent of GDP in 2050. And in October 2014, an article in the Journal of the American Medical Association found that “By 2050, many US cities may experience more frequent extreme heat days. For example, New York and Milwaukee may have 3 times their current average number of days hotter than 32°C (90°F)…The adverse health aspects related to climate change may include heat-related disorders, such as heat stress and economic consequences of reduced work capacity”. The article continues to list many other adverse health outcomes and the implications for physicians. Wor


“Productivity Losses Ignored in Economic Analysis of Climate Change” in Our World (September 23, 2014) at: http://ourworld.unu.edu/en/productivity-losses-ignored-in-economic-analysis-of-climate-change

American Climate Prospectus: Economic Risks in the United States (June, updated August 2014) at: http://rhg.com/reports/climate-prospectus

“Climate Change Challenges and Opportunities for Global Health” in the Journal of the American Medical Association (JAMA) at: http://jama.jamanetwork.com/article.aspx?articleid=1909928

For more, see the Hothaps website at: http://www.climatechip.org/. Hothaps = High Occupational Temperature: Health and Productivity Suppression, an international research program which studies “the effects of heat exposure on working people (including gender aspects and effects on pregnant women and on children), to quantify climate change-related increases in workplace heat exposures and the impact this will have on human health and productivity”.