When it comes to preparing for future flood risk, governments are getting a failing grade, says an environmental expert.
Blair Feltmate, head of the Intact Centre on Climate Adaptation and Faculty of Environment at the University of Waterloo, says Canada’s federal government is the least involved when it comes to investment and a mitigation strategy for climate change and resulting overland flooding.
“The level of government that is best prepared is at the municipal level, they tend to be closest to the people, the mayors and the city counsellors,” he said in an on-site interview at Insurance Business’s
Flood Risk and Insurance MasterClass. “Up one level is the province, and then the least engaged on the file is the federal government.”
Insurers are the main offence to combating the negative fallout of climate change, Feltman adds, as they’ve seen – and paid for – the effects first hand, and that a main challenge for the industry is competitively pricing premiums as risk rises.
“The property and casualty insurance sector is not the canary in the coal mine – they’re the ostrich in the coal mine in reference to having to deal with the negatives associated with climate change and extreme weather events,” he says.
“They’re seeing it right up front and they’re paying for it, to the point now where we have an uninsurable housing market going up in lots of pockets throughout Canada, whereby insurers are longer offering sewer backup coverage for example. They want to offer it, but they can’t because the risk is so high or the premium they’d have to attach to the coverage would be cost prohibitive to most people,” he says.
“But Canadians mistakenly think insurers can just walk away or charge an extra high premium. You can’t do that; you can only price so far until it’s unaffordable. And they don’t want to walk away from markets because that’s their business, that’s like saying McDonald’s isn’t going to sell hamburgers anymore.”
He adds that governments are not purposely casting a blind eye to the growing issue of flood, but that existing investment is tied up in other – perhaps less relevant – climate change initiatives.
“In Canada, what governments are missing on the climate file is they’re putting 95% of discussion and effort on greenhouse gasses in addressing climate change, with virtually next to no returns,” he says. “There’s nothing focused on adaptation to deal with the risk in the system immediately, right now, on our doorstep today.”
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