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COP26 today: Climate impact on economy, low-carbon tech market emerge at summit finance day – The Globe and Mail



Britain’s Chancellor of the Exchequer Rishi Sunak holds up a Green briefcase as he arrives for a speech at the COP26 U.N. Climate Summit in Glasgow, Scotland, Wednesday, Nov. 3, 2021.Alberto Pezzali/The Associated Press

The latest at COP26:

  • Coalition of nearly three dozen large corporations formed to build low-carbon tech market as $130 trillion worth of financiers take the stage
  • Non-profit group to put spotlight on Indigenous clean energy voices
  • The Bank of Canada said it will develop new models and data sources to better understand how climate change is impacting Canada’s economy
  • UN climate envoy and former Governor of the Bank of Canada Mark Carney says “The money is here but that money needs net zero aligned projects”

Today is finance day at the summit. Get smarter about climate-conscious investing in five weeks. Sign up for Green Investing 101, delivered Tuesdays.

Catch up on yesterday’s events here, and read our recap on how Canada joined more than 100 nations in pledge to end deforestation by 2030. Also from yesterday, Canada’s global-carbon-price pitch is an uphill battle.

1:30 p.m. ET

Alberta, with largest oil industry, sends fewer to COP than any other energy province

The province with Canada’s largest oil and gas industry has sent one of the country’s smallest delegations to the international climate conference, where emissions from that industry are under scrutiny.

A preliminary list of the Canadian delegation shows Alberta has sent two bureaucrats.

Newfoundland has nine people at the meetings, Manitoba has six and Ontario has four, as does the Northwest Territories. Quebec has 36 representatives. Several Indigenous and environmental groups also have stronger numbers at the meetings, which are setting the world’s path to reduce greenhouse gas emissions from fossil fuels.

Premier Jason Kenney has said he didn’t see the value of one more politician at what he called a “gab fest.”

– The Canadian Press

12:45 p.m. ET

Non-profit group to put spotlight on Indigenous clean energy voices at COP26 summit

As world leaders gather in Glasgow for COP26, they are facing calls to think big.

Mihskakwan James Harper and other delegates from Indigenous Clean Energy will be urging them to also think small: specifically, about how micro-grid projects owned and operated by Indigenous communities can help power a lower-carbon world.

In sessions this week at the climate change conference in Glasgow, Mr. Harper and three other ICE delegates will be showcasing such projects and making the case that Indigenous communities should have a key role in shaping the future energy landscape.

“We will not meet our climate targets unless Indigenous peoples are empowered – and I think the world needs to hear this and the world really needs to understand this,” Mr. Harper said in an interview from Toronto before he left for Glasgow.

Wendy stueck

U.S. Treasury Secretary Janet Yellen takes part in a CNN television interview in the Action Zone at COP26 on November 03, 2021 in Glasgow, Scotland.Christopher Furlong/Getty Images

12:00 p.m. ET

Coalition formed to build low-carbon tech market

U.S. climate envoy John Kerry, nearly three dozen large corporations including Apple and Amazon, and the World Economic Forum are launching an alliance to build a market for technologies that generate low levels of carbon dioxide.

The First Movers Coalition announced on Wednesday aims to help companies set their purchasing plans in a way that will “create new market demand for low-carbon technologies,” the World Economic Forum said.

“Technology has given us the tools to reduce our emissions and build a stronger and more inclusive economy of the future,” forum President Borge Brende said. “For innovators and investors to play their part in tackling the climate crisis, they need clear market demand.”

– AP

Chilean Environment Minister Carolina Schmidt meets with the Minga Indigena indigenous at COP26 on November 03, 2021 in Glasgow, Scotland.Christopher Furlong/Getty Images

11:00 a.m. ET

Fears for farming and trade stopped India signing COP26 forest, methane pledges

India did not sign the COP26 pledge to stop deforestation and cut methane gas emissions by 2030 because of its concerns over the impact on trade, on the country’s vast farm sector, and the role of livestock in the rural economy, officials said.

Yesterday, world leaders pledged to stop deforestation by the end of the decade and cut emissions of the potent greenhouse gas methane to help slow climate change.

Agriculture accounts for over 15% of India’s $2.7 trillion economy and employs almost half of the country’s more than 1.3 billion people. Around two-thirds of Indians live in the countryside and India’s large livestock population is central to the country’s agriculture and its village economy. That makes reducing methane emissions, generated by cows’ digestive systems and manure, a major challenge.

– Reuters

Extension Rebellion activists protest in front of JP Morgan premises as they take part in a demonstration against ‘Greenwashing’ near the COP26 U.N. Climate Summit in Glasgow, Scotland, Wednesday, Nov. 3, 2021.Alastair Grant/The Associated Press

10:00 a.m. ET

Kremlin defends climate actions after Biden barb

The Kremlin has rejected U.S. President Joe Biden’s criticism of Russian President Vladimir Putin for not attending the U.N. climate conference.

“His tundra is burning — literally, the tundra is burning. He has serious, serious climate problems, and he is mum on willingness to do anything,” Biden said Tuesday of Putin and the wildfires that scorched Siberia this summer.

Kremlin spokesman Dmitry Peskov said Wednesday that Moscow does not agree with Biden’s characterization. He said the Russian delegation at COP26 actively participated in the summit.

“Russia’s climate action don’t have the goal of being pegged to an event,” Peskov said. “Of course, we are not belittling the significance of the event in Glasgow, but Russia’s actions are consistent, serious and well-thought-through.”

– AP

9:30 a.m. ET

Bank of Canada plans new tools to assess climate impact on economy

The Bank of Canada said on Wednesday that it will develop new models and data sources to better understand how climate change is impacting Canada’s economy, and said it would include these findings in its quarterly forecasts to help markets price risks.

The central bank, in a release tied to the UN’s COP26 global climate summit, said it will assess how more frequent severe weather events and the transition to low-carbon growth affect Canada’s potential output, the labor market and inflation.

“Climate change and the transition to a low-carbon net zero economy will have significant macroeconomic consequences, touching every region and sector of the Canadian and global economies,” the bank said in a statement.

“It will also have implications for structural change, the growth of potential output, and price stability,” it said.

– Reuters

8:30 a.m. ET

Canada loses bid to host corporate sustainability data to Frankfurt at COP26, but gets a secondary hub

Frankfurt has been named as the headquarters of a new global organization responsible for providing companies with standards for reporting sustainability measures – and Montreal will be home to a secondary office.

The locations of the offices for the new International Sustainability Standards Board were announced along with other details of the organization at the COP26 climate summit in Glasgow on Wednesday.

The secondary hub in Montreal is consolation prize for Canada. Numerous banks, insurers, pension funds, industry associations and major corporations backed a Canadian bid to host the ISSB, even offering a “welcome fund” to support its operations for an initial period.

Jeffrey Jones, James Bradshaw

7:40 a.m. ET

As politicians exit, $130 trillion worth of financiers take the stage

With national leaders gone from the U.N. climate conference, attention turned on Wednesday to the state treasuries and the businesses and financiers responsible for carrying out the pledges to cut emissions and build infrastructure.

A main aim of the COP26 talks is to secure enough national promises to cut greenhouse gas emissions – mostly from burning ubiquitous fossil fuels – to avert the worst climate disasters by keeping the rise in the global temperature to 1.5 degrees Celsius.

But how exactly to meet those pledges, particularly in the developing world — is still being worked out. Above all, it will need a lot of money.

Among the most vexing questions are who should pay and how the funds can be channelled through the financial system quickly and effectively. A major goal will be to attract more private money.

The issues are so important that organizers dedicated all of Wednesday for executives and public finance leaders to discuss them.

The Glasgow Financial Alliance for Net Zero – an umbrella group that includes all the major Western banks as well as insurers and asset managers – announced that firms responsible for managing $130 trillion in capital, equivalent to 40% of the world’s financial assets, had signed up to assuming a “fair share” of decarbonisation.

– Reuters

Andrew Coyne: How much we cut carbon emissions is less important than how we do so

World Bank president David Malpass, Kenyan Minister Ukur Yatani Kanacho, Mark Carney, the former Bank of England governor and now the UN special envoy for climate action and finance, IMF managing director Kristalina Georgieva hold a panel discussion at the COP26 UN Climate Summit in Glasgow on November 3, 2021.DANIEL LEAL-OLIVAS/AFP/Getty Images

6:30 a.m. ET

Climate financing target for 2023 in reach “if we are lucky”

A spate of last-minute pledges from developed countries have made it possible but not certain that a target of $100 billion in climate financing could be reached in 2022, Germany’s state secretary for the environment said on Wednesday.

“We thought already three weeks ago that we would have all the pledges,” he told a news conference with his Canadian counterpart, natural resources minister Jonathan Wilkinson, at the COP26 climate conference in Glasgow.

“But we saw even yesterday from Japan a very substantive announcement… So if we are lucky we can reach $100 billion in 2022 but definitely in 2023.”

– Reuters

‘Greta Mania’ sweeps COP26 climate summit as Thunberg visits Glasgow

Deforestation done well: Gabon’s green logging laws offer COP26 countries a path to climate action

6:00 a.m. ET

Mark Carney says ‘money is here’ for net zero aligned projects

UN climate envoy Mark Carney called on Wednesday for more blended finance facilities to mobilize private finance to help the developing world access climate finance, saying the money was there.

“We need blended finance facilities that don’t mobilize fractions of private capital for the public dollar but multiples … in double digits. There are facilities that are being developed that can do this, we need to scale them dramatically,” he said.

“The money is here but that money needs net zero aligned projects and there’s a way to turn this into a very, very powerful virtuous circle and that’s the challenge.

– Reuters

5:30 a.m. ET

Britain’s Sunak pledges to ‘rewire’ global finance system for net zero

British finance minister Rishi Sunak pledged on Wednesday to “rewire” the global financial system for net zero, saying London will also commit 100 million pounds ($136.19 million) to make climate finance more accessible to developing countries.

Outlining Britain’s strategy over the next five years to the United Nations COP26 climate summit, he said in addition to the 100 million pounds, London would also support a new capital markets mechanism to issue billions of new green bonds.

“Six years ago Paris set the ambition, today in Glasgow we are provided the investment we need to deliver that ambition,” he told an audience in Glasgow.

– Reuters

5:00 a.m. ET

U.S. backs new effort to issue green bonds

The United States on Wednesday announced its support for a new capital market mechanism that will issue investment-grade bonds and raise significant new finance for scaling clean energy and sustainable infrastructure in emerging economies.

Underscoring the urgency of acting to stop global warming, Treasury Secretary Janet Yellen told the COP26 climate conference in the Scottish city of Glasgow that the United States would join Britain in backing the Climate Investment Funds’ (CIF) new Capital Market Mechanism and its innovative leveraging structure.

She said the initiative would help attract significant new private climate funds and provide $500 million per year for the CIF’s Clean Technology Fund, as well as its new Accelerating Coal Transition investment program.

– Reuters

More reading

Opinion and analysis

  • Campbell Clark: After COP26 climate conference, the carbon trade war will inch closer
  • Editorial board: The global warming alarm clock is ringing. Wake up
  • Gary Mason: Steven Guilbeault is the right environment minister for our times

Tens of thousands of people from world leaders to climate protesters are in Glasgow for COP26. Adam Radwanski, The Globe’s climate change columnist, says the size and attention around the summit makes it harder to leave without meaningful agreements on climate action.

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How will the coronavirus omicron variant affect the economy? –



Scientists are racing to figure out omicron, the new coronavirus “variant of concern,” and governments are scrambling to devise strategies for dealing with it. Several have rushed to enact new travel bans and dust off mask requirements.

On Friday, the United States announced that it would ban visitors from South Africa and seven other countries in the region. And on Monday, President Joe Biden said he expects no additional travel bans and doesn’t think new shutdowns are necessary.

So what might omicron have in store for the U.S. economy?

We don’t need more lockdowns for the virus to damage the economy. It can do that via plain old fear. Gad Levanon, who heads the labor market institute at The Conference Board, said that if omicron turns out to be, say, a slightly worse delta, we might expect a similar economic result.

“Spending on leisure and hospitality would be impacted, spending by older people and families with young children that are not vaccinated — they will be spending less — and especially, I think, tourism will take a big hit,” he said.

The U.S. has ended up trying to manage the virus rather than stamp it out, but some other countries — countries with whom the U.S. trades — are inclined to take a stricter approach.

“China is still persisting with its zero-COVID policy, so if we saw more disruption and closures of factories, that would weigh on supply chain problems that have already been an issue,” said Paul Ashworth, chief U.S. economist at Capital Economics.

How omicron might affect inflation is another question that, for now, is unclear.

“In the near term, you’re going to have a sharp, sudden reduction in consumer demand,” said Ian Bremmer, president of Eurasia Group.

That would bring inflation down. But if omicron turns out to be particularly serious, supply chain problems might intensify in a month’s time, keeping prices up. “The effect is mixed but differs over time,” Bremmer said.

We don’t know yet what threat omicron poses to global health, but we do know that the virus controls the economy, and the information we get over the next few weeks will dictate the path our economy takes.

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How Much of a Threat Is the Omicron Variant to the Economy? – The New Yorker



How Much of a Threat Is the Omicron Variant to the Economy?

President Joe Biden stands at a podium wearing a black suit and blue tie. There are holiday decorations and a painting...

Biden urged Americans to get fully vaccinated and wear masks indoors, adding, “The variant is a cause for concern, not a cause for panic.”Photograph by Anna Moneymaker / Getty

What a difference a few days makes. This time last week, retail analysts were looking forward to a bumper holiday-shopping season, the stock market was making new highs seemingly by the day, and economists were predicting that annualized G.D.P. growth could top eight per cent in the final quarter of the year. The Delta-variant surge in COVID-19 cases, which had been rapid during the summer, seemed to be behind us. Speaking at a White House event where President Joe Biden announced that he was nominating Jerome Powell for a second term as the chairman of the Federal Reserve, Powell said, “Today, the economy is expanding at its fastest pace in many years, carrying the promise of a return to maximum employment.”

Then came the news of the Omicron variant, which prompted the worst Black Friday sell-off on Wall Street since 1931 and a distinct change in tone from Powell. “The recent rise in COVID-19 cases and the emergence of the Omicron variant pose downside risks to employment and economic activity and increased uncertainty for inflation,” he said, in prepared congressional testimony that the Fed posted on its Web site on Monday afternoon. “Greater concerns about the virus could reduce people’s willingness to work in person, which would slow progress in the labor market and intensify supply-chain disruptions.”

Before the release of Powell’s testimony, the financial markets had rebounded somewhat from Friday’s drop. The Dow rose by more than two hundred points, and the S. & P. 500 also closed up. The price of U.S. Treasury bonds, which are widely regarded as a haven during times of market stress, fell back after posting big gains before the weekend. Crude oil, which on Friday plunged by about ten dollars a barrel, owing to worries of a slowing global economy, rose by about three dollars.

For once, the market reaction was reasonably rational. The discovery of a new variant, possibly a more contagious one, and the immediate imposition by many governments of new travel restrictions, created a lot of uncertainty about the global economy. Because investors had been pricing in a “new normal” in which COVID-19 didn’t go away but did become manageable, a wave of precautionary selling and profit-taking was inevitable. Similarly, given how little we really know about Omicron, Monday’s pause to assess things also made sense. There were reports from South Africa that some of the new cases are mild ones, but scientists warned that it’s too early to reach any judgment about the lethality of the new variant. Anthony Fauci, the President’s chief medical adviser, informed him at a meeting of the White House COVID-19 response team that it would take about two weeks to “have more definitive information on the transmissibility, severity, and other characteristics of the variant.” Afterward, Biden urged Americans to get fully vaccinated and wear masks indoors, but he said that further lockdowns were “off the table” for now. “The variant is a cause for concern, not a cause for panic,” he added.

At this stage, that judgment applies to the economy as well as the public-health situation. In a circular to clients over the weekend, economists at Goldman Sachs outlined four ways in which this new variant could play out: a “false alarm” scenario, in which Omicron actually spreads less quickly than Delta and has little economic impact; a “downside” scenario, in which Omicron spreads more rapidly than Delta but isn’t significantly deadlier, and has only a modest economic impact; a “severe downside” scenario, in which Omicron turns out to be more contagious and deadly than Delta, prompting another wave of lockdowns and a significant economic downturn; and an “upside” scenario, in which Omicron spreads faster than Delta but proves much less deadly. In this upbeat outcome, a “net reduction in disease burden leaves global growth higher than in our baseline . . . the recovery in goods and labor supply accelerate.”

Even if that final scenario smacks of wishful thinking, it is true that the range of possible outcomes is broad. It is also important to note that the situation is very different from the start of the pandemic, when the original strain of the coronavirus had free rein. For an extremely bad economic outcome to materialize, there would have to be another wave of widespread and lengthy lockdowns—either compulsory ones imposed by governments or voluntary ones caused by people retreating to their homes out of fear. Such a set of events is conceivable, but it would likely have to be preceded by a big wave of hospitalizations and deaths in areas where Omicron is circulating, not merely more cases. As long as the vaccines continue to offer protection against the most serious illnesses, countries with high rates of vaccination will hopefully be able to escape such a tragedy. (As experts have long argued, to protect the residents of developing countries, which generally have lower rates of vaccination, it is imperative to make vaccines more widely available.)

For now, the Biden Administration and other governments are extremely reluctant to impose more lockdowns, which would be politically controversial and economically damaging. Their medical advisers are busy pointing out that the vaccines have provided significant protection against the previous variants. There is “reason to be optimistic,” Francis Collins, the director of the National Institutes of Health, told MSNBC on Monday. However, the World Health Organization released a technical note that described Omicron as “a highly divergent variant,” and it said that the over-all global risk from Omicron is “very high.”

Powell’s warning about downside economic risks means that an appearance he’ll make before the Senate Banking Committee on Tuesday will be closely watched. It comes as the Fed is set to decide whether to tighten monetary policy more rapidly to head off higher inflation. The emergence of Omicron further complicates this decision, because, as Powell indicated in his prepared testimony, it could affect the economy in several different ways. If a severe fourth wave does materialize, hiring could appreciably slow again, but short-term inflationary pressures could also conceivably increase as disruptions to the supply chain intensify. The year-end meeting of the Fed will be held in a couple weeks. Between now and then, Powell and his colleagues will be watching the news anxiously. Just like the rest of us.

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Bank of Canada to work with Indigenous groups on reconciliation



The Bank of Canada will work with Indigenous groups to understand the wounds caused by decades of discrimination and determine how reconciliation can create a more inclusive and prosperous economy for all, Governor Tiff Macklem said on Monday.

Macklem, opening a symposium on Indigenous economies, said Canadians could work to correct some of the consequences of those “ugly periods.”

Ottawa forcibly removed thousands of Indigenous children from their communities and put them in residential schools in an effort to strip them of their language and culture, a practice that continues to scar families and individuals.

“The Bank of Canada will be working with a broad spectrum of Indigenous groups to set out what reconciliation means for what we do,” Macklem said.

“Together, we’ll define what reconciliation means for the work of the Bank of Canada — toward a more inclusive and prosperous economy for everyone,” he said.

Canada‘s Truth and Reconciliation Commission called the residential school system “cultural genocide” in 2015, as it set out 94 “calls to action” to try to restore Canada‘s relationship with its Indigenous people, including economic reconciliation.

“We can’t go back and change what’s happened. But we can try to correct some of the consequences,” said Macklem, adding that it is the central bank’s job to create conditions for opportunity for all Canadians.

“Taking concrete steps toward economic reconciliation is our responsibility too. And it’s incumbent upon us to take the time to do this well,” said Macklem.


(Reporting by Julie Gordon in Ottawa; Editing by Dan Grebler)

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