Economic analysis of climate change adaptation measures applied to the alpine skiing industry in Québec

In 2018, the Ouranos consortium began a study on the impacts of climate changes on the skiing industry in southern Québec with the collaboration of a dozen stakeholders.

Published in 2019, the final report of the project analyzes the characteristics of the Québec skiing industry, uses local climate projections to establish the impacts of climate changes, and targets various adaptation measures analyzed based on their economic cost-effectiveness. The project aims to establish concrete adaptation measures for three specific ski resorts: Bromont, Sutton and Orford. Since these regions are located in the “warm” part of southern Québec, they are more vulnerable to warmer winter temperatures and reduced snow cover. The study also provides an economic analysis model that can be used by ski resorts in other regions of the province or elsewhere in Canada.

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Understanding and Assessing Impacts

Outdoor sports are an important aspect of the winter culture in Québec. In addition to being part of the daily life of a considerable portion of the population, some activities are also a source of tourism and generate significant economic benefits in many regions far from major centres. Downhill skiing is one of these key activities, with 75 ski resorts in 16 tourist regions across the province.

However, climate changes are compromising the practice of these winter activities. Projections for the province indicate warmer average winter temperatures, reduced snow cover and increased liquid precipitation during the winter. These projections are likely to have a negative impact on winter sport conditions, which require abundant snow, along with cold, stable temperatures. This represents a threat to the winter outdoor industry and the prosperity of the many communities that depend on it.

These findings led the Ouranos consortium, the Québec Ski Area Association, the Bromont, Sutton and Orford ski resorts and the Université du Québec à Montréal (UQAM) to collaborate on a study in order to thoroughly assess the impact of climate changes on the Québec skiing industry and to identify adaptation measures that ski resort operators can implement to maintain the level of activity at their sites. This project also incorporated the contribution of various local stakeholders, such as regional county municipalities (RCM) and economic development organizations. The approach consisted in working in collaboration with various areas using specific cases, while producing results that could also be used by ski resorts in different regions as part of the development of local climate change adaptation strategies.

In order to better assess the various possible adaptation measures, the project team first created a portrait of the industry and associated climate changes. This portrait includes a review of the knowledge on climate changes and the alpine skiing industry, as well as an analysis of climate projections specifically targeting the Eastern Townships region.

This analysis revealed that without adaptation measures, the start of the season would be delayed by about 7 to 10 days by 2050, compared to 2020. In addition, the ski season would also be 10 to 20 days shorter. However, this decrease would not compromise the capacity of the resorts targeted by the study to operate above the minimum threshold of 100 ski days. Finally, by 2050, the available skiable area could decrease by 20 to 30% in terms of open trails, on average, for the three resorts.

Identifying Actions

Both technological and behavioural adaptation measures were initially selected through literature reviews and engagement sessions involving industry stakeholders, sector and regional representatives, and tourism experts. The research team then selected a limited number of adaptation measures for a more detailed analysis, in collaboration with the participating ski resorts. The final list includes both technological adaptation measures and measures based on the diversification of the business model of the ski resorts. However, the analysis of these measures involves a greater degree of uncertainty, as market research would be required for a more accurate estimate of potential future revenues. The adaptation measures considered were all subjected to an initial assessment; a multi-criterion analysis. Afterwards, some suitable measures were also subjected to a cost-benefit analysis and a break-even analysis.

The goal of the multi-criterion analysis was to gain a comprehensive view of the possible effects of climate change adaptation measures, not only on the economic viability of ski resorts, but also on the environment and society. Contrary to more conventional economic analyses, this method better integrates positive and negative externalities into the assessment. For example, while increased snowmaking capacity may place more pressure on local water resources, the development of all-season activities may help reduce seasonal unemployment. The potential impacts associated with each criterion have been identified through a review of international literature and multidisciplinary expert opinions, and consist of qualitative assessments that may need to be supplemented by the quantitative impact assessments usually required in the regulatory framework of economic projects affecting the environment.

The multi-criterion analysis assesses the following: 1) Feasibility of the measure 2) Effect on the quality of the environment 3) Effect on the economy 4) Effect on social/regional issues and, finally, 5) Sustainability and innovation. A variety of indicators were chosen to measure these criteria, which were rated on a scale from “unfavorable/very unfavorable” to “very favorable.”

Several findings emerged from the multi-criterion analysis: increasing snowmaking capacity is essential, but cannot be the only solution; water management is an important consideration for resort operators for both supply and social acceptability reasons; and finally, the measures deemed most promising are those whose results are not as clear at first glance, but which foster collaboration between various local stakeholders.

In addition to the multi-criterion analysis, cost-benefit analyses were conducted solely regarding the snowmaking adaptation measures. These revealed that the cost of electricity is a key determinant of the profitability of snowmaking investments. For some adaptation measures, break-even analyses were conducted, such as infrastructure upgrades or the installation of a synthetic ski slope for summer use. For them to be profitable, the analysis indicates that most of the investments would require substantial increases in clientele. Therefore, these measures would need to be combined with marketing and market development efforts.

Implementation

Since the report was published relatively recently and the COVID-19 pandemic has, in the meantime, significantly disrupted the operations of ski resorts, the resorts involved did not share information on the implementation of the climate change adaptation measures studied.

Outcomes and Monitoring Progress

Three significant findings emerged from the approach surrounding this report. First, the collaboration required to collect data and assess the measures involved the province’s skiing industry and its partners. The collaboration of various stakeholders opened the door to better information sharing and the possibility of developing new and beneficial local partnerships, especially for the implementation of some of the adaptation measures focused on regional tourism. Secondly, concrete adaptation measures for this industry have been evaluated for the first time in a methodical way within the Québec context, namely thanks to the climate change adaptation investment simulator. The in-depth study of these measures in the local context of the Eastern Townships and the creation of an economic assessment tool led the way to the development of new solutions anchored in the Québec context, thus serving as a basis for planning and action for ski resorts elsewhere in the province. Finally, the development by the project team of snow modeling for the region is an important scientific advance in optimizing snowmaking plans and therefore reducing both the operating costs and the environmental impact of ski resorts. This model can be used in the future by both scientists and stakeholders in the outdoor industry to better understand local snow conditions.

Next Steps

A new study is currently being prepared, this time targeting the broader industry by forming a representative sample of resorts throughout the 16 tourist regions across the province. The goal of this study will be to assess the vulnerability of the Québec ski sector by evaluating the sensitivity and adaptive capacity factors across the industry. It will also identify the risks and opportunities in the face of the changing climate in order to develop a sectoral resilience plan.

Resources

Link to Full Case Study (in French only)

Additional Resources (in French only)