Whether suddenly or gradually, climate change is affecting every country on the planet. For example, between October 2020 and June 2021, Taiwan experienced a drought of exceptional severity - the worst in more than fifty years - which led to severe water shortages across the country. Water is not only essential to human life: it’s also required for industry.
The substantial amount of water needed to manufacture semiconductors - a technology found in virtually every electronic device - is a concrete example of this. In response to the situation, the Taiwanese government mandated water usage reductions of up to 20% for the technology sector, forcing the industry to scale back production.
Since Taiwan accounts for about 18% of global semiconductor manufacturing capacity and 90% of advanced chip production capacity, these disruptions quickly spread beyond its borders. Against a backdrop of strong demand, which had already been exacerbated by the COVID-19 pandemic, they weakened global supply chains. As a result, some automobile plants had to scale back or suspend operations. Smartphone and computer manufacturers were also affected.
From a local drought to global repercussions
How could this localized drought have such widespread effects? The answer lies in the cross-border risks associated with climate change.
These are interconnected impacts, the repercussions of which, although varying by region, extend beyond national borders and simultaneously affect economies, societies, and ecosystems. According to the Intergovernmental Panel on Climate Change (IPCC), climate change is expected to exacerbate cross-border risks in many key sectors, including water, energy, and food.
Like other parts of the world, Quebec and Canada are exposed to these risks. In our highly interconnected world, understanding these dynamics is critical so that we can prepare for and adapt to them.
What are cross-border risks in the context of climate change?
According to the Global Transboundary Risk Report (2023), transboundary risks stem from two main factors:
Climate-related hazards, such as storms, droughts, rising sea levels, and wildfires, can have impacts that extend beyond national borders; and
Adaptation measures can have negative cross-border effects, particularly when they are ill-conceived, that is, when they simply shift risks from one region to another.
Transboundary risks explicitly include the exposure of interconnected systems, in particular due to reliance on external resources, supply chains or markets, as well as vulnerability to such disruptions.
These risks can propagate to regional, national, and global levels through four channels, namely:
The connections between physical systems (such as lakes, rivers, and oceans) and ecosystems that span several neighboring countries;
Trade links, which include the flow of goods, services, and raw materials;
Financial flows, including capital flows and foreign investment; and
Human mobility, including migration, forced displacement, and tourism.
No region is immune to the cross-border risks posed by climate change. However, the most vulnerable communities are often the first and hardest hit by these impacts, even in the wealthiest countries. These include rising food prices, the spread of vector-borne diseases, and access to resources such as water and materials.
When these risks affect developing countries, despite being lower emitters of greenhouse gases (GHGs), the consequences are often disproportionate. In addition, these countries generally have a more limited capacity to adapt.
Learn more | Special Dossier : Social Inequalities and Climate Change
What happens elsewhere can have consequences here
Due to their interconnections and cascading effects, transboundary climate risks are difficult to analyze, and research on their impacts in Quebec and Canada is still limited. Nevertheless, it is possible to provide a brief overview of the risks that could affect Canada’s land, economy, and population.
Economically speaking, Quebec and Canada are heavily dependent on international trade, which accounts for more than half of Canada’s GDP. A large portion of our trade is with the United States, but China, Mexico, and the European Union are also significant partners. This interdependence can make the economy vulnerable to weather events such as droughts, floods, and extreme temperatures. Such events may:
Disrupt supply chains
Damage infrastructure
Lead to fluctuations in the availability and prices of raw materials (e.g., lumber, metals) and many essential goods
The food industry illustrates this interdependence well. Nearly half of the food consumed in Quebec comes from abroad. The impacts of climate change in food-producing regions may limit imports and exports, affecting the prices of goods and food. For certain foods that aren’t grown in Quebec, such as oranges, rice and sugarcane, production losses caused by changing weather conditions elsewhere in the world can lead to higher prices and affect food security.
Understanding in order to improve adaptation
Cross-border risks are systemic: they affect multiple interconnected systems and influence the propagation of climate impacts across regions. This urges us to rethink the traditional approach to adaptation strategies, which focuses on local risks. It is essential to consider global dynamics and to account for the indirect effects of adaptation measures implemented elsewhere. This includes, in particular:
Sharing and pooling data on the impacts of climate change
Coordinating adaptation efforts across jurisdictions
Diversifying supply sources and export markets
Although research and data on cross-border risks are advancing, incorporating them into adaptation strategies poses significant governance challenges. Raising awareness throughout society, among policymakers, professionals, and the general public about these interconnected issues and the need to address them collectively is essential for our resilience. Monitoring and managing cross-border risks can be undertaken in tandem with the collective efforts to reduce greenhouse gas emissions and build a society that is more resilient to the impacts of climate change.
