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27 Jun

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Low Water Blues–Economic Fallout from Lower Future Water Levels in the Great Lakes-St. Lawrence Region Could Total More Than $18 Billion by 2050

June 27, 2014 | By |

If future water levels in the Great Lakes and St. Lawrence River remain near the low end of the historic range for sustained periods, the long-term economic impact on the region could reach $18.82 billion by 2050, according to a new Mowat Centre study conducted for the Council of the Great Lakes Region (CGLR).

Based on historical data for water levels in the Great Lakes and St. Lawrence River basin and data for five key economic sectors, Low Water Blues projected the future economic impacts of reduced water levels using a plausible climate change scenario that projects future water levels near the low end of the historic range.

Since 1997/98, much of the basin has experienced the longest extended period of lower water levels since coordinated measurement began in 1918. The study concludes there could be significant economic fallout from a continuation of these lower water levels into the future — 9.61 billion dollars over the period from the present through 2030 and 18.82 billion dollars from now through to 2050.

Water levels rebounded to some degree throughout the region beginning in late 2013 due to cooler temperatures across the basin and the extensive lake ice coverage and snowfall of winter 2013/14. But it is unclear if the rebound marks an end to the low water trend, or if it represents an outlier, as recently suggested by the National Oceanic and Atmospheric Administration’s (NOAA) Great Lakes Environmental Research Laboratory.

According to Council of the Great Lakes Region CEO Mark Fisher, the study’s findings are an important starting point for U.S. and Canadian governments as they look for ways to adapt to or mitigate the potentially costly uncertainty and variability of future water levels in the region.

“Our region is a complex social, environmental, and economic system, bound together by our lakes and waterways,” said Fisher. “A persistent decline in water levels could have considerable impact on all facets of this system.”

The Great Lakes contain about 20 per cent of the world’s surface freshwater supply, providing drinking water for some 40 million households. More than 3,500 species of plants and animals inhabit the basin. The region also accounts for 28 per cent of combined Canadian and US economic activity, with an output totaling 4.9 trillion dollars.

The study did not calculate indirect impacts. But according to Fisher, “the findings are all the more sobering for the fact that they likely underestimate the potential economic costs, given the methodology, the available data, the complexity of projecting future water levels in the basin, and the variability introduced by climate change. However, this gives us a practical, plausible worst case scenario from which to build a bi-national response.”

According to the study, the sectors that would be most affected include:

  • Recreational boating and fishing: $6.65B total through 2030 and $12.86B total through 2050.
  • Commercial shipping and harbours: $1.18B total through 2030 and $1.92B total through 2050.
  • Hydroelectric generation: $951M total through 2030 and $2.93B total through 2050.
  • Residential waterfront property values in Ontario municipalities adjacent to GLSL shores: $794M total through 2030 and $976M total through 2050.
  • Rural groundwater users: $28M total through 2030 and $35M total through 2050.

Environmental organizations like Georgian Bay Forever have long highlighted the serious ecological threats that low water levels pose to the region, but as Georgian Bay Forever’s executive director David Sweetnam notes, the report’s findings confirm there also will be serious economic impacts across the region and across sectors.

“Environmental impacts have economic consequences,” said Sweetnam. “It’s critical that governments investigate how to respond. In particular, we need to investigate the costs and benefits of state-of-the-art flow-attenuation structures that could minimize and prevent economic and ecological harm by protecting water levels in the Great Lakes.”

“The study is the first to tackle the economic impact of a very serious issue – decreasing water levels in the Great Lakes,” says Robert Lewis-Manning, President of the Canadian Shipowners Association. “It is clear that all stakeholders must act now to alter the long-term economic and environmental impacts of not dealing with low water levels.”

In a forthcoming report being prepared for Natural Resources Canada, CGLR and the Mowat Centre will examine the costs and benefits of adaptation strategies to climate change-induced low water levels in the Great Lakes basin.

View report