Ontario could save $1.1B a year if it adapts public infrastructure for climate change: fiscal watchdog

The dangers of a changing climate could add more than $4 billion per year to the cost of maintaining Ontario's public infrastructure over the rest of the century, the province's financial watchdog said Wednesday. 

But the report from the Financial Accountability Office of Ontario said the province and municipalities can cut those costs by proactively making hospitals, schools, stormwater pipes and other public infrastructure more resilient to extreme heat and rainfall. 

The summary report is the culmination of four years of work at the FAO to estimate the budgetary impacts of changing climate hazards on Ontario's public infrastructure. 

"There are a lot of risk assessments, but this is a unique work in that we do provide these costings," said Edward Crummey, the FAO's economics and fiscal analysis director.

Ontario's outdated infrastructure design has contributed to its climate vulnerability. 

The province's building code uses climate design data based on historical weather observations and the province requires municipalities to design sewers using historical precipitation data, the report said. A recent survey found more than half of the province's municipalities design their stormwater systems based on historical climate data.

More extreme heat expected to crack roads, degrade materials

But planet-choking greenhouse gas emissions are increasing global average temperatures, leading to more frequent and intense climate hazards, the report said. 

More days of extreme heat are expected to crack roads and degrade building materials. More extreme rainfall events could lead to costly maintenance on overrun stormwater pipes, the report noted. 

The report estimates climate hazards will add $4.1 billion per year to public infrastructure costs on average if governments don't adapt, based on a medium-emissions scenario where global temperatures rise to about 2.3 C above the pre-industrial average. 

Under that same scenario, those costs are projected to come down to around $3 billion per year when averaged out over the rest of the century if the province and municipalities proactively make all public infrastructure climate resilient by 2070. 

If governments wait and adapt infrastructure at the end of its useful life, the report estimates an average cost of $3.5 billion per year. 

The report also costed out infrastructure impacts in low and high emissions scenarios where warming is either kept at 1.6 C or increases to a calamitous 4.2 C. By late century, the climate costs in a high emissions scenario are over $10 billion, four times higher than a low scenario and twice those in the medium scenario, the report said. 

Municipalities, which manage the majority of Ontario's public infrastructure, are expected to incur four times the climate-related infrastructure costs compared to the province. Those costs would be roughly equivalent to municipal spending on social housing or health and emergency services, the report said. 

Report's cost estimates are conservative

Ontario Environment Minister Andrea Khanjin said the province has "always worked lockstep" with its municipal partners. She pointed to a pilot project that offers municipalities money to help rebuild infrastructure damaged in extreme weather to a higher standard. 

The report comes as scientists warn the world is speeding well past its internationally agreed upon climate targets. To have a fifty-fifty shot at limiting warming to 1.5 C — a key threshold scientists say could help prevent some of most severe climate impacts — countries would have to slash emissions by 42 per cent by the end of the decade, a United Nations report said this week. 

The FAO said there's been widespread interest in its work on costing climate impacts from governments and organizations. 

The report has some notable limits, and the FAO cautions cost impact estimates should be considered in the lower range. 

It only zeroed in on three specific climate hazards — extreme rainfall, extreme heat and freeze-thaw cycles — and left out wildfires, river flood and several others, citing a lack of confidence in forecasting. 

And while it examined the majority of provincial and municipal public infrastructure, the report said resource constraints and data availability meant it excluded some infrastructure, such as drinking water pipes and machinery, along with assets owned by the federal government or Indigenous communities. 

The report was also focused on direct costs to government budgets of maintaining public infrastructure in a state of good repair. The effects on households and businesses were beyond its scope.