The language lovers among you will know that economy and ecology are twins, born and raised in the same ancient home the Greeks called oikos. They live estranged in our modern minds — a tragic separation with immense cost as the eco crashes its way back into the economy.

How immense? At least $38 trillion per year in a couple decades, according to the most advanced analysis yet conducted on the economic impact of climate change. The study was published in the journal Nature — by some cosmic coincidence, just one day after the latest federal budget.

The Liberal budget didn’t entirely ignore climate action, but there was no way to miss the downgrade in priority. The prime minister left his green tie at home and the finance minister, her green suit. All that talk about keeping pace with the U.S. investments in the Inflation Reduction Act seems so 2023. After winnowing out the back-loaded spending and reannouncements, there’s “only $2 billion in net new climate spending over the next five years,” estimates the Canadian Centre for Policy Alternatives: “A small step forward when a bold stride was needed.”

Nature Canada was more enthusiastic, applauding funds and Indigenous leadership for three “hugely important” new national protected areas — the Great Bear Sea (Central Coast National Marine Conservation Area Reserve) in B.C.; Ojibway National Urban Park in Ontario; and Pituamkek National Park Reserve in P.E.I.

To the dismay of climate advocates, there was no windfall tax on fossil fuel profits. Although the Finance Department was considering a surtax like the one levied on banks last year, the lead-up to the budget was “a fossil fuel lobbyist frenzy,” reports John Woodside. Any windfall tax on oil profits was dropped “in the face of strong opposition from oilpatch executives and the Calgary-based Canadian Association of Petroleum Producers,” sources told the Globe and Mail.

Then, that study in Nature dropped, underlining just how crucial it is that our politics recouple the eco-twins economy and ecology. Just 26 years from now, climate change will be causing economic damage of at least $38 trillion — every year.

That’s a stunning bill. The entire global economy is about $105 trillion a year right now. In a scenario where the world economy keeps growing as it has over the past few decades, climate damage will cause “an income reduction of 19 per cent within the next 26 years” — so, one-fifth less income than an economy without climate change.

“Strong income reductions are projected for the majority of regions, including North America and Europe, with South Asia and Africa being most strongly affected,” say the researchers.

And they find it’s much cheaper — six times cheaper — to put the eco back in economy than to blow through the limits agreed in the Paris Agreement. “These damages already outweigh the mitigation costs required to limit global warming to 2 C by sixfold over this near-term time frame,” conclude the authors.

Unfortunately, there’s more to unpack. The researchers hail from the Potsdam Institute for Climate Impact Research (PIK), which is one of the premier institutes in the world and the peer-reviewed paper is published in Nature, one of the top journals.

Unlike most past economic studies, they amassed actual empirical evidence of impacts from more than 1,600 subnational regions over the past 40 years and then projected them forward.

That means we probably can’t avoid the $38-trillion bill — those are “committed damages,” or the damages we should expect as a result of our past emissions, even if the world suddenly moves to stop greenhouse gas pollution really quickly.

Countries least responsible for climate pollution will suffer the most, particularly countries in the tropics. Although Canada and Russia rank in the world’s top 10 for the cumulative emissions that drive climate change, we may suffer least, through sheer latitudinal luck.

Projected income changes in 2049 compared to an economy without climate change. Income changes are committed in the sense that they are caused by historical emissions. (Image: Kotz et al., Nature)

But the economic impacts could be much worse. The researchers acknowledge their findings are almost certainly conservative. For starters, you will have noticed the world is not drastically cutting greenhouse gas emissions, so the $38--trillion figure is a low end.

And then, the real kicker — the authors didn’t include impacts they couldn’t reliably assess. So, they looked at known impacts on agricultural yields, labour productivity and infrastructure resulting from rising temperatures and changes in rainfall. But not heat waves — a pretty notable omission from the roster of climate impacts we are already experiencing. Nor health costs, sea-level rise or tropical cyclones. They did not speculate about future tipping points but they also could not account for existing impacts from extreme events like storms and wildfires, which were too hard to assess and obviously result in higher costs than projected.

If you start factoring in the heat domes, droughts and storms in Canada, it becomes clear there are serious economic impacts even in northern climates. “Life will become less affordable for (Canadian) households as economic growth slows, governments are forced to raise taxes to pay for climate disasters, job losses increase, and goods become more costly,” concludes the Canadian Climate Institute in its own analysis.

Nor is there some magic stabilizing point after 2050. “We have to cut down our emissions drastically and immediately — if not, economic losses will become even bigger in the second half of the century, amounting to up to 60 per cent on global average by 2100,,” says PIK scientist Leonie Wenz, who led the study in Nature.

“This clearly shows that protecting our climate is much cheaper than not doing so,” she says. “And that is without even considering non-economic impacts such as loss of life or biodiversity.”

Different people respond to different stimuli. Personally, I find it unfathomable that the pictures of worldwide coral bleaching aren't enough to catalyze a global mobilization against burning fossil fuels. For others, dollars make more sense. And if your neighbours aren’t moved by academics publishing in journals, perhaps they’ll tune in to their go-to folks for advice on cars, appliances and garden gear.

Consumer Reports just issued a $500,000 warning:

“Climate change will cost a typical child born in 2024 at least around $500,000 over the course of their lifetime — and possibly as much as $1 million — through a combination of cost-of-living increases and reduced earnings.”

So say the consumer advocates. But, in case German scientists are more your cup of schnapps, let’s give them the last word:

“It is on us to decide,” says the Potsdam Institute’s Anders Levermann. “Structural change towards a renewable energy system is needed for our security and will save us money. Staying on the path we are currently on will lead to catastrophic consequences. The temperature of the planet can only be stabilized if we stop burning oil, gas and coal.”