If Canada fails to attract enough private capital to replace its industries for life in a low-carbon global economy, hundreds of thousands of jobs could be at risk, a study by a federally-backed climate think tank said. Is.
According to the Canadian Institute for Climate Choice, 800,000 jobs are dependent on sectors hardest hit by such transition disruptions, including oil and gas, mining, heavy industry and auto manufacturing.
Those industries account for about 70 percent of Canada’s exports and generated more than $300 billion in export revenue and investment in 2019.
The institute said that effective policy and regulations, targeted public spending and corporate disclosure of climate risks will be key to attracting private capital and keeping the country competitive in the coming decades.
“Canada is at a critical moment, when global markets are changing and governments and businesses are faced with the choice of taking action to transform the economy or look at our competitive position in the world to succeed in the new market realities. ,” said Rachel Samson, the organization’s director of Clean Development Research and lead author of the report.
It is being released a week before the United Nations conference in Glasgow to discuss strengthening national commitments to reduce emissions. The financial sector will play a major role in the negotiations.
Canada needs a new playbook on climate
Governments and businesses will need to invest $2 trillion to realign Canada’s economy to achieve net zero emissions by 2050, according to a report by RBC Economics released on Wednesday. Funding will be needed for many things, including modernizing and greening the electricity grid for mass adoption of electric vehicles and making buildings energy-efficient.
Ms Samson said it would be wrong to treat essential spending as a cost that would disappear in the financial system; Instead, it is an investment in clean economic growth. “So, in terms of thinking about the price tag, I think we have to think about the overall impact on the well-being of Canadians,” she said.
The researchers, called “Sink or Swim,” designed the study as a stress test for the economy as climate considerations play a greater role and investors look for assets they consider sustainable. This is where competition is important, he said.
Investors around the world will redirect trillions of dollars from high-carbon sectors as countries try to meet net-zero targets. This will alter business patterns, alter demand and endanger businesses that are slow to adapt, the study said.
Every province and territory in Canada has workers in areas most vulnerable to disruption in the transition to clean energy, the study said. Alberta, with its large oil and gas and energy services sectors, has a proportion of such workers at 9.1 percent of the workforce, followed by the Northwest Territories at 7 percent, Saskatchewan at 6 percent, and Newfoundland and Labrador at 5.8 percent.
The institute argues that climate strategies have to involve more than just reducing greenhouse gas emissions. For example, a low-emission coal mine will still face financial issues as power generators and steelmakers move away from coal-fired facilities in response to pressure from their governments or investors. One solution for such business would be to switch to renewable energy sources or minerals needed for EV batteries, it said.
The report said setting ambitious national climate goals would mean far less hit to GDP by 2050 than slowly working or maintaining the status quo. With aggressive action, the economy will experience a slight increase in GDP by 2050 and a loss of about 2 percent from physical climate risk by 2050, while maintaining the status quo would cut GDP by about 5 percent and lead to no recovery. infection, it said.
Ms Samson said that mobilizing the political will to lay down policies to reach zero is no less than a major hurdle compared to previous years.
“It is no longer just about political will. The markets are developing their own pace,” she said. “Investors are now actively looking for ways to reduce their carbon-related risks, and unions have shifted toward advocating for companies to take greater action to improve their transition readiness. They Those with secure jobs see it as a way to the future.”
Jeffrey Jones for the Sustainable Finance and ESG Sectors. Email him at [email protected]
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