14.3.2 Social, economic, and institutional context

Canada and the U.S. have developed economies with per capita gross domestic product (GDP) in 2005 of US$31,572 and US$37,371, respectively (UNECE, 2005a,b). Future population growth is likely to be dominated by immigration (Campbell, 1996). Interests of indigenous peoples are important in both Canada and the U.S., especially in relation to questions of land management. With ageing populations, the costs of health care are likely to climb over several decades (Burleton, 2002).

Major parts of the economies of Canada and the U.S. are directly sensitive to climate, including the massive agricultural (2005 value US$316 billion) (Economic Research Service, 2006; Statistics Canada, 2006), transportation (2004 value US$510 billion) (Bureau of Transportation Statistics, 2006; Industry Canada, 2006) and tourism sectors (see Section 14.2.4, 14.2.7 and 14.2.8). Although many activities have limited direct sensitivity to climate (Nordhaus, 2006), the potential realm of climate-sensitive activities expands with increasing evidence that storms, floods, or droughts increase in frequency or intensity with climate change (Christensen et al., 2007: Section 11.5.3.3 and Meehl et al., 2007: Sections 10.3.6.1 and 10.3.6.2).

The economies of Canada and the U.S. have large private and public sectors, with strong emphasis on free market mechanisms and the philosophy of private ownership. If strong trends toward globalisation in the last several decades continue through the 21st century, it is likely that the means of production, markets, and ownership will be predominantly international, with policies and governance increasingly designed for the international marketplace (Stiglitz, 2002).