‘The First Wealth is Health’: a new Perspective on Physical Climate Change Risks

This piece explores the intersectionality of climate change, our health, our healthcare system, and how life insurers are considering these impacts on local communities.

It is well known that climate change has wide-reaching effects on the environment in which we live due to higher temperatures and more erratic and severe weather events. What is not as well known is that climate change is also negatively affecting our health. The cascading effects of climate change have detrimental impacts on our health in the form of illnesses that are either caused by or exacerbated by extreme heat, cardio-pulmonary conditions from decreased air quality, and higher incidences of tick-borne diseases such as Lyme disease. Climate change has also been contributing to mental health issues due to trauma inflicted by severe weather events and pessimism about the future of the world’s climate. In addition, climate change can add strain to the healthcare system and has prompted several life insurers to re-examine their risk assessments.

Extreme Heat

Although it is typically storms and floods that dominate headlines about severe weather, it is actually extreme heat that is the deadliest for peoples’ health. It is the number one weather-related cause of death in the U.S., and most years it kills more people than hurricanes, floods and tornadoes combined¹. In Canada, more than 600 people died from conditions brought on by extreme heat during British Columbia’s heat dome in 2021. Four years later, as of December 2025, this event stands as the deadliest weather event in Canadian history in terms of mortality². Most of the fatalities occurred among the poor and the elderly³. These vulnerable populations, and the very young, are disproportionately affected by extreme heat due to low access to air conditioning, a decreased ability to regulate their body temperature, and the pre-existence/under-development of health conditions affecting vital organs like the heart, lungs and kidneys⁴.

Extreme Heat is the number one weather-related cause of death in the U.S., and most years it kills more people than hurricanes, floods and tornadoes combined¹.

Data shows that the world is experiencing longer periods of extreme heat. Scientists say four billion people, about half the world’s population, experienced at least one extra month of extreme heat because of human-caused climate change from May 2024 to May 2025⁵. In the U.S., residents have gone from experiencing an average of two heat waves each summer in the 1960s to more than six heat waves each summer today . Those heat waves have also extended from an average of three days to four, and the heat wave season lasts much longer, extending from about 20 days in the 1960s to more than 70 today⁶.

Access to air conditioning has been identified as a key risk in illnesses and deaths related to extreme heat. There are calls for the “right to air conditioning”, that heat relief should be extended by the government to those who cannot afford to buy it⁷. Doctors are even prescribing air conditioning in poor neighbourhoods in Toronto to mitigate heat-related illnesses⁸. However, the need for air conditioning can create a vicious cycle: more energy is needed for air conditioning to operate, resulting in more greenhouse gas (GHG) emissions, exacerbating climate change, which drives extreme heat, and consequently heat-related illnesses and deaths. The use of energy-efficient air conditioning units can help mitigate the cycle⁹.

Decreased Air Quality

Decreased air quality, which has been more prevalent around the world due to increased air pollution, smog and incidences of wildfires, is a serious threat to human health. A report released recently by the University of Chicago’s Air Quality Life Index noted that air pollution is the world’s greatest external threat to human wellbeing¹⁰. Another recent report zoned in on more than 9,500 point-sources of low air quality located in urban areas and found that 1.6 billion people around the world live within just 10 km of these polluting sources¹¹.

Greenhouse gases are not the only harmful product contained in polluted air. Fine particulate matter is another type of damaging emission that is released from industrial operations and combustion that makes its way into the air we breathe. Efforts have been made in Canada and globally to curb emissions of fine particulate matter from industrial emitters, with a focus on particulates with a diameter of less than 2.5 micrometres, also known as “PM 2.5”. This kind of particulate is of specific concern because its small size enables it to travel farther and deeper into the lungs and enter the bloodstream, resulting in health impacts such as asthma, strokes and cardiovascular disease. However, while progress has been made to reduce industrial emissions and consequently reduce the amount of GHGs and PM 2.5 entering the atmosphere, the increased frequency and severity of wildfires have been reversing those advances — with serious health consequences. High levels of PM 2.5 from wildfire smoke have been shown to cause worse health outcomes than other sources of PM 2.5, such as those from gas-powered vehicles and industrial emissions¹². Being exposed to increased PM 2.5 has also been found to be a risk factor in growing rates of lung cancer among non-smokers in Canada¹³. With the year 2023 having been the worst year on record for wildfires in Canada, and 2025 projected to be the second worst, concern is raised about increased levels of PM 2.5 infiltrating our air.

While progress has been made to reduce industrial emissions and consequently reduce the amount of GHGs and PM 2.5 entering the atmosphere, the increased frequency and severity of wildfires have been reversing those advances – with serious health consequences¹².

Tick-borne Diseases

Climate change, particularly rising temperatures, is also a factor in the increase of tick-borne diseases throughout Canada, such as Lyme disease. The disease, which can lead to significant long-term effects including heart problems, nerve damage and inflammation of the brain and spinal cord, has been on the rise in North America for several years. Reported cases in Canada have jumped from 144 in 2009 to more than 5,000 in 2024. Ontario, Quebec and Nova Scotia continue to be the hot spot habitat in Canada for blacklegged ticks, which can carry bacteria, parasites and viruses that can cause Lyme disease and other diseases in humans. However, warmer temperatures have prompted the geographic expansion of their habitat further west to include the prairie provinces and British Columbia, with the effect being that a greater number of people are living in proximity to these disease-causing ticks.¹⁴

Mental Health

Climate change is also a contributor to mental health challenges. The effects of climate change have been shown to aggravate multiple pre-existing risk factors for mental health, such as poor living and employment conditions made worse by extreme heat and severe weather events. It can also lead to emotional distress, cause the development of new mental health conditions, and create a worsening situation for people already living with these conditions¹⁵. The increased frequency and severity of wildfires in recent years have had a particular effect on mental health. There are several trauma-related factors caused by wildfire devastation that are associated with an elevated risk for anxiety disorders, such as post-traumatic stress disorder and depression. These traumatic factors include the witnessing of burning homes, fearing for one’s life and/or those of loved ones, losing loved ones, significant property damage, and feeling a lack of support from the government and others¹⁶.

Young people are at particular risk of their mental health being negatively affected by climate change. This cohort is in a challenging position in relation to the mental and emotional impacts of climate change: they have contributed least to the crisis, they will be disproportionately impacted, and they have limited opportunities for influencing action. A recent Canadian survey of 1,000 people aged 16 to 25 found that 56% reported feeling afraid sad, anxious and powerless about climate change, 73% reported that they believe the future is frightening because of climate change, and 78% said that climate change affects their overall mental health¹⁷. The increase in mental health effects arising from climate change has prompted the development of a psychotherapy specialty called “climate awareness” to support those affected, and there are now more than 400 climate-aware therapists in the U.S.¹⁸

73% of young people surveyed reported that they believe the future is frightening because of climate change, and 78% said that climate change affects their overall mental health¹⁷.

Effects on our Healthcare System and Life Insurance

Not only is climate change negatively affecting our health; it is also impacting the actual delivery of healthcare services. Illnesses brought on by climate change mean that more people need care, adding pressure to an already resource-constrained healthcare system. Certain health care facilities and staff are also needing to deal with additional strains due to climate change, e.g. areas affected by wildfires experience large increases in admissions for smoke-related illnesses, and the wildfires can directly impact the ventilation and sterilization in the facilities. In addition, barriers to provide care can be exacerbated as physical climate events can impede access to roads and the availability of electricity, water, food, and medical supplies. In extreme situations, facilities need to evacuate, further compromising healthcare productivity.¹⁹ The impacts of climate change on health are expected to cost Canada’s healthcare system billions of dollars in the coming decades.²⁰

The implications of climate change are also extending to life insurers, prompting a re-think of how they assess risk and price products. Actuaries and underwriters are now considering the significance of climate risk factors such as where people live (what is the heat risk and the air quality?), long-term health trends (will certain chronic conditions become more common due to environmental stressors?), and occupational exposure (do certain jobs make individuals more vulnerable to the effects of extreme heat and poor air quality?).²¹

It is evident that climate change is affecting our health and quality of life in several ways. The present and future quality of our lives depends on how we collectively address climate change. Sustainable investment has a unique and important role to play in managing risks associated with climate change and contributing to the reduction of related health risks. One of the ESG focus areas of BMO Global Asset Management’s sustainable investment approach is Climate Change, which has been prioritized because of the significant systemic risk posed by climate change. Our climate change-focussed work in areas like emissions reduction, clean energy transformation and climate resiliency can impact the broad effects of climate change and consequential impacts on our health and our healthcare system.

The philosopher Ralph Waldo Emerson once said, “the first wealth is health” and indeed this is apparent when considering the systemic health-related effects of climate change: the quality of our physical and mental health, the delivery of our healthcare services, and a re-examination of how our lives are insured. It is therefore important to address them at both a policy level and through the analysis of and engagement with companies operating in the most impacted industries.

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Originally Posted January 9, 2026 – ‘The First Wealth is Health’: a new Perspective on Physical Climate Change Risks

Sources

¹Extreme Heat Is Deadlier Than Hurricanes, Floods and Tornadoes Combined | Scientific American 

²Extreme Heat Death Review Panel Report 

³Extreme Heat Death Review Panel Report 

⁴Extreme heat is a global killer — and worse for our health than previously thought, new research shows | CBC News 

⁵4 billion people endured extra month of extreme heat due to climate change, experts say | AP News 

⁶Climate Change Fuels Record Summer Heat, Killing Thousands | Scientific American 

⁷We need to cool it: In our warming world, we deserve temperature safety – The Globe and Mail 

⁸How do we provide cool relief in a world that’s heating up? – The Globe and Mail 

⁹Air conditioning causes around 3% of greenhouse gas emissions. How will this change in the future? – Our World in Data 

¹⁰Wildfires are reversing Canada’s progress on improving air quality | CBC News 

¹¹PM2.5 in Toronto Urban Area | Climate TRACE 

¹²Wildfires are reversing Canada’s progress on improving air quality | CBC News 

¹³Doctors say more non-smokers are developing lung cancer – especially women – The Globe and Mail 

¹⁴Climate change driving rise in tick-borne illnesses such as Lyme disease | Globalnews.ca and Climate change is fuelling a spike in Lyme disease cases across Canada | CBC News 

¹⁵Mental health and Climate Change: Policy Brief 

¹⁶The Impact of Wildfires on Mental Health – Psychiatry Advisor 

¹⁷Climate emotions and anxiety among young people in Canada: A national survey and call to action – ScienceDirect 

¹⁸What ‘climate-aware’ therapists recommend if global warming is affecting your mental health | Connecticut Public 

¹⁹How does climate change impact health care? | How does climate change impact health care? 

²⁰ClimateChoices_Health-report_Final_June2021.pdf 

²¹Climate change: Assessing an emerging risk impacting insurers – BMO Insurance