Opinion: The B.C. floods remind us of the consequences of ignoring the need for investment into infrastructure
Rick Smith is the President of the Canadian Institute for Climate Choices
For years, climate action has been tied up in a false dichotomy of the economy versus the environment: two intractable foes, pitted against each other. The greens versus the bean-counters. Canadians’ pocketbooks versus the safety of the planet.
As of this week, that that frame has been soundly discredited. It was never the economy or the environment, it’s climate action and future prosperity or inaction and economic destruction.
The B.C. floods and mudslides are shaping up to be the largest weather-related disaster for Canada this year. Businesses have been forced to shut down — they’re either literally under water, or their balance sheets soon will be, as their supply chains are abruptly cut off.
A terrorist attack on multiple points in our rail and road system could not have been more destructive for the B.C. economy than the “atmospheric river” caused by our increasingly volatile climate. Rail traffic has been halted in and out of the port of Vancouver, with losses estimated at more than $300 million per day until service can be restored.
The floods, wildfires and heat domes that B.C. has experienced in 2021 can no longer be considered anomalous, freak events. As the climate warms, they will become inevitabilities. And as outlined in our recent report Under Water, we must prepare to meet them with urgency and at scale — just as we would respond to any other known threats to our national and economic security.
Climate and weather impacts already had the economy in a headlock and have been putting the squeeze on our growth. Since 2010, the costs of weather-related disasters and catastrophic events have amounted to about 5 to 6 per cent of Canada’s annual GDP growth, up from an average of 1 per cent in previous decades. The 2013 southern Alberta floods cost the province over $5 billion dollars in economic output due to employment disruption; the costs for B.C. will be far more.
Climate change may have us down, but we’re not out.
We need to prepare for what’s coming, and that means better information. Where are our weak points, the regions, the people and the infrastructure most vulnerable to catastrophic risk? A lot of the time we don’t know, because in Canada information on climate-related risks is often unavailable or at best out of date. For example, B.C. flood mapping for the Nicola and Coldwater Rivers around the evacuated City of Merritt was last updated in 1989 — 32 years ago. Government flood maps are, on average, 20 years out of date, and don’t adequately consider the changing climate. Even bigger information gaps exist for climate-fuelled threats like wildfire. A lack of climate risk information and transparency is a roadblock preventing us from preparing. This is fixable.
It’s clear from looking at the washed-out highways and rail lines in B.C. that we need a huge investment in climate-resilient infrastructure. B.C.’s current crisis shows that such investment is the most cost-effective way to protect the services that people and businesses depend on. Canada already has an infrastructure deficit, with governments, utilities, businesses and homeowners already struggling to keep what already exists in good condition; we need to ensure that this deficit is addressed with future-fit, low-carbon infrastructure that builds for the climate of today and tomorrow.
It’s hard for municipalities, provinces and the federal government to spend money upgrading infrastructure to address long-term risks, when there are so many short-term demands that seem more urgent. But future-fit infrastructure is a good investment. New infrastructure lasts a lifetime, and it’s far less costly to build now for a warmer, low-carbon future than for a past that no longer exists.
While the flooding in B.C. is a disaster that has caused the country to sit up and take notice, it is important to remember that climate-related disruption was already regularly hurting productivity, mobility, trade, communications, and food and water security, impacting economic growth and the health and well-being of people across Canada. We live in a country that is warming twice as fast as the global average. It’s time we started building for that reality.
Analysis-Japan keen to speed up digital yen launch as China adds geopolitical twist
Japan‘s new political leadership is calling on the country’s financial bureaucrats to ramp up efforts toward issuing a digital currency, pointing to China’s far quicker progress as a potential challenge to the global economic order.
The government has increased staff looking into legal and technical aspects of issuing a central bank digital currency (CBDC), which are digital forms of existing currencies.
While the political attention has yet to translate into any other direct investment, it is also likely to keep the Bank of Japan (BOJ) under pressure to shift away from its cautious, baby-step approach toward issuing a digital yen, analysts say.
“We must think about what could happen to Japan’s national security if other countries move ahead on CBDC,” said Takayuki Kobayashi, a minister overseeing economic security – a new role created under Prime Minister Fumio Kishida’s administration.
“Japan must speed things up so it’s ready to issue a digital yen any time,” he said.
A global front-runner, China has already run tests in major cities for a possible launch of a digital yuan next year. Japan, along with other G7 advanced nations, have moved much slower.
The BOJ only started the first phase of its experiment in April, and says it has no immediate plans to issue a digital yen. Pilot programmes, if any, won’t take place until 2023 at the earliest.
That lukewarm stance may be put to test as Kishida has made economic security a policy priority, and framed questions around CBDC beyond finance into one of national security.
While G7 central banks generally agree on the need to counter China on issues around privacy, the case is particularly strong for Japan as lawmakers worry about the growing economic might of its assertive neighbour.
Some influential ruling party lawmakers see China’s advances on CBDC as a potential threat to the dollar’s status as a global reserve currency, and the financial dominance of Washington – Japan’s biggest ally.
A close aide to Kishida told Reuters Japan must “work closely with the United States to counter any attempt that threatens the dollar’s reserve-currency status,” adding the BOJ was coordinating with the finance ministry to ensure speedy progress for issuing a digital yen.
Opposition parties have also called in their election campaign platforms for speeding up CBDC plans.
BOJ officials say China’s plan won’t directly affect the timeframe for their CBDC experiments as the key purpose of issuing a digital yen is to provide convenient, efficient payment and settlement means to the public.
What could affect the BOJ more than China’s plan would be how quickly its European and U.S. counterparts announce plans for issuing CBDCs, say sources familiar with its thinking.
Debate over issuing a digital yen may intensify next year as Kishida’s administration lays out details of its economic security plans, and as China is seen promoting its digital yuan at the Beijing Winter Olympic Games in February.
“It’s clear Kishida’s administration and his ruling party are keen on issuing a digital yen,” said former BOJ board member Takahide Kiuchi, who is currently an economist at Japan’s Nomura Research Institute.
“If China launches a digital yuan next year and Europe’s central bank announces plans to issue a digital euro, that will have a huge impact on Japan and pile pressure on the BOJ.”
(Reporting by Leika Kihara; Additional reporting by Kaori Kaneko and Tetsushi Kajimoto; Editing by Kim Coghill)
Global economy rebounds, but for how long? – FRANCE 24
Issued on: 01/12/2021 – 04:12Modified: 01/12/2021 – 04:10
Paris (AFP) – The world economy woke up from its pandemic-induced coma in 2021, but soaring inflation, global supply chain bottlenecks and a resurgent coronavirus have taken the shine off the comeback.
Now growth is at risk of weakening next year.
Here is a look at the state of the global economy:
Countries have posted impressive growth figures as they clawed their way out of the depths of the 2020 Covid-induced recession, but some are faring better than others as wealthier countries have had better access to vaccines.
The United States has overcome its worst downturn since the Great Depression while the eurozone’s economy could return to pre-pandemic levels by the end of the year.
But a resurgence of the coronavirus could scupper the recovery, with the emergence of the Omicron variant raising new concerns.
“Covid-19 will remain a public health threat, particularly in countries where vaccination rates remain low,” said analysts at Moody’s credit ratings agency.
With a 2.5 percent vaccination rate, the economy of sub-Saharan Africa is growing at a slower click, according to the International Monetary Fund.
Most emerging and developing countries should remain far behind their pre-pandemic forecasts by 2024, the IMF says.
Central banks in Brazil, Russia and South Korea have raised interest rates to combat rising inflation, a move that could rein in growth.
China, the world’s second biggest economy and a driver of global growth, is facing a slew of risks: New coronavirus cases, an energy crunch and fears over the debt crisis at real estate giant Evergrande.
Inflation has accelerated to multi-year highs around the world, as consumers returned with a vengeance and industries faced shortages.
Prices have soared across the board, with oil, natural gas and raw materials such as wood, copper and steel going through the roof.
“The biggest surprise of 2021 has been the goods-led inflation surge,” Goldman Sachs analysts wrote in a 2022 outlook.
Central banks insist the inflationary pressure is a temporary consequence of economic activity returning to normal this year after it came to a halt when the pandemic erupted in 2020.
Stock markets have hit new record highs this year, but investors are concerned that central banks will withdraw their stimulus programmes and raise interest rates earlier than expected to tame inflation.
“The question is whether we really are in the end of the crisis,” said Roel Beetsma professor of macroeconomics at the University of Amsterdam.
Industries have struggled to keep up with a surge in demand from consumers.
Global trade has been disrupted by insufficient shipping containers, congestion at ports and labour shortages.
One key component that is hard to come by these days is semiconductors, chips used in everything from phones to video game consoles to the electronic systems of cars.
The shortage has been so bad that several automakers have had to temporarily halt production at some factories.
Labour shortages have added to the problem as truck drivers, port workers and cashiers have not returned to work following lockdowns.
Despite the difficulties, the IMF expects the world economy to grow by a healthy 4.9 percent next year.
In addition to the pandemic, economies had to come to grips with another life-threatening event this year: climate change.
The conflict between economic growth and saving the planet came to the fore at the COP26 climate summit in Glasgow, Scotland, this month.
Nearly 200 nations signed a deal to try to halt runaway global warming after two weeks of painful negotiations, but fell short of what scientists say is needed to contain dangerous rises.
Droughts and other climate catastrophes threaten to further drive up food prices, which jumped to a 10-year high in October, according to the Food and Agriculture Organization.
Wheat has soared by 40 percent in the past year while dairy products are up 15 percent and vegetable oils reach new records.
“It’s pretty obvious. Everything has gone up,” said Nabiha Abid, a resident of Tunisia’s capital, noting that the price of meat has doubled.
© 2021 AFP
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