Costly impacts include buildings collapsing with melting permafrost, rivers running low and wildfires

By Chris Arsenault

YELLOWKNIFE, Northwest Territories, Canada, Oct 16 (Thomson Reuters Foundation) - Climate change is taking a heavy economic toll on Canada's far north, with buildings collapsing as melting permafrost destroys foundations, rivers running low and wildfires all a drain on the region's limited finances, senior government officials said.

A sprawling area spanning the Arctic Circle with a population of less than 50,000, Canada's Northwest Territories has spent more than $140 million in the last two years responding to problems linked to global warming, the territory's finance minister said.

"Our budgets are getting squeezed dramatically from climate change," Finance and Environment Minister J. Michael Miltenberger told the Thomson Reuters Foundation.

"The roads are constantly moving as the permafrost is melting... massive shore erosion is putting buildings at risk. We have spent hundreds of millions of dollars in the past few years and the tie to climate change is more and more evident."

In this windswept territory, which already relies on central government subsidies, responding to global warming is crucial for its financial survival.

A major U.N. conference in Paris in December will aim to create a new global deal to curb climate change to take effect from 2020.

Scientists want to keep international temperature rises below 2 degrees compared with pre-industrial levels, while providing poor countries with money for adaptation.

But in parts of the Northwest Territories, average temperatures have already risen more than three degrees Celsius from pre-industrial levels, government officials said.

"In Paris, we are hoping for whatever it takes to turn this (climate change) around," politician Bob Bromley told the Thomson Reuters Foundation in the territorial capital, Yellowknife.

"It's going to require all hands on deck, and willing hands."

DIESEL DEPENDENCE

The delicate ecosystem of the wide-skied territory, home to the indigenous Dene people, and where wolves, caribou and bison roam, has been plunged into a environmental vicious cycle.

Climate change has been linked to decreased water levels in the territory's major rivers, partly due to greater evaporation, causing a sharp contraction in hydro electric power generation.

As a result, the government has had to import more diesel, borrowing about $30 million this year alone to make up for the electricity shortfall, hurting its budget and increasing climate-warming emissions in a catastrophic feedback loop.

"It's not sustainable," said Miltenberger, the finance and environment minister.

He called on Canada's national government to provide more financial help for climate change mitigation, particularly in renewable power, to reduce the costs of importing diesel.

With a small population, and high operating costs due to its size and climate, the territory's main employers are diamond mining and the public sector. The region's indigenous people rely on the hunting of caribou as a key food source, but herds are declining, with climate change likely a significant driver.

Northwest Territories receives financial transfer payments of about $1.3 billion, or about $29,000 per resident, from Canada's national government to run public services.

Craig Scott, executive director of Ecology North, a Yellowknife-based environmental group, believes the government should have invested earlier in renewable energy.

Fuel trucks hauling diesel along gravel roads to small rural communities are a common site across the territory.

Generators have been working around the clock following the decline in hydro power, Scott said, and new holding tanks had to be imported to store the diesel.

"Renewable energies (including) micro hydro, solar and biomass have high capital costs in the short-term," Scott told the Thomson Reuters Foundation. "But they are sustainable versus the long-term pain of diesel."

This report was produced with support from the Internews Earth Journalism Network.

(Reporting By Chris Arsenault by Ros Russell; please add:; Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers humanitarian news, women's rights, trafficking, corruption and climate change. Visit www.trust.org)

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