The world is headed for a low-carbon transition whether Canada is ready or not – and if companies and government policies are not better prepared for this change, 800,000 jobs could be on the line.
This is the latest finding from the Canadian Institute for Climate Choice (CICC) report, Transform Canada’s economy, sink or swim, for a Granthshala low-carbon futurewhich was released on Thursday morning.
To avoid a sharp drop in the profits of Canada’s publicly traded companies – and to help protect the 800,000 jobs that exist in these transition-vulnerable sectors such as auto manufacturing and oil – researchers warn that governments and Companies equally need to act fast.
“If those companies are successful in adapting to the new market realities, they can be successful for decades to come,” said Rachel Samson, director of clean growth research at CICC.
“However, if they are not, there is a risk of job losses, and it will be important for communities and regions to consider opportunities to develop new areas of growth.”
More than 60 countries, representing at least 70 percent of Granthshala GDP, have committed to reaching net-zero emissions by 2050. Granthshala investors are also beginning to recognize the importance of climate action. According to the report, technological change is also accelerating around the world.
These three factors tell a story: the low-carbon transition is happening, the report says, and rapidly – and Canada will have to keep up.
“Three broad trends are connecting in ways that make the Granthshala low carbon transition inevitable. And in some markets, change can happen much faster than anticipated,” Samson said.
“Our results show that Canadian exporters and multinationals are not yet ready for a Granthshala transition.”
The report laid out four recommendations that governments and companies can take to ensure Canada is prepared to face the impending Granthshala transition to a low-carbon economy.
The first recommendation is to prioritize “making future-looking decisions” immediately.
Policymakers, Samson said, should consider the “future competitive advantages” of policies that improve the nation’s preparedness for companies’ low-carbon transition, and ensure that those policies generate demand for products with growth potential. Do it. For example, creating a zero-emissions vehicle mandate that requires all cars purchased after a certain year to be electric. The report suggests that such a policy creates demand for an industry towards which automakers can move.
The second recommendation is to “rebalance public investment and tax incentives to mobilize private investment in future fit projects and companies,” Samson explained. In practice, she said, this means fewer subsidies for fossil fuel companies and more for industries whose demand is expected to grow further — such as hydrogen, renewable energy and biofuels.
According to the CICC, when it comes to mitigating the disruption of the low-carbon transition, communities also need to get their hands dirty.
The third recommendation is to develop local and people-focused transition plans. In other words, businesses need to attract new sources of growth and jobs to a community that may depend on a transition-vulnerable industry. For example, when the GM plant in Ingersoll, Ont., invested $1 billion to cover the site at Canada’s first large-scale commercial electric vehicle manufacturing plant.
These companies also need to increase resilience within the local workforce through education and skills training.
Finally, the report recommends that governments disclose “decision-useful climate metrics,” Samson said, which could help clarify regulations on climate-related financial products.
While these recommendations may seem like a tall order, John Stackhouse, senior vice president in the CEO’s office at Royal Bank, says the transition to a low-carbon economy is “entirely possible.”
“This is the biggest challenge we have known as a country – certainly the biggest challenge many of us have seen or any of us have seen in our lifetimes,” he acknowledged.
While practicable, A new report released by RBC EconomicsThe analysis by Stackhouse and his team shows that change will come at a cost.
“With so many challenges in life, the best way to go about them is to break it down into manageable pieces,” he said.
Canada would need about $2 trillion to put the economy on a path to net-zero emissions over 30 years. The RBC report estimates that governments, businesses and communities will need to spend at least $60 billion annually to cut emissions by 75 percent of current levels and reach the 2050 goal of net zero.
Handling the expected increase in electric vehicles will also require funding to build the power system, and investment in remodeling older buildings faster than current federal plans predict. Skill training will also be a big part of the equation, the RBC report found.
“The biggest challenge is not the entirety of this net-zero project for the country. The biggest challenge, like any journey, is to move forward with it, taking the hard first step, which we have done as a country,” Stackhouse said.
“We’re not starting from scratch here, but we have to take more of those early steps… not spend years after years debating, analyzing, thinking.”
According to the CICC, taking these steps will help ensure Canada is on a good footing as it navigates a potentially bumpy transition.
“This transition is coming despite decisions in Ottawa, or even at provincial levels. This transition is coming from factors beyond Canada’s control,” said Dale Beugin, vice president of research and analysis at CICC .
“So really, it’s all about what the country … on all orders of the government, can do to prepare itself …