Economy

Explainer: Climate change: what are the economic stakes?

Published

3 years ago

October 25, 2021

COP26 climate talks in Glasgow starting next Sunday may be the world’s best last chance to cap global warming at the 1.5-2 degrees Celsius upper limit set out in the 2015 Paris Agreement.

The stakes for the planet are huge – among them the impact on economic livelihoods the world over and the future stability of the global financial system.

Here are 10 climate change-related questions that economic policy-makers are trying to answer:

1) HOW MUCH DOES CLIMATE CHANGE COST? From floods and fires to conflict and migration: economic models struggle with the many possible knock-on effects from global warming. The ballpark IMF estimate is that unchecked warming would shave 7% off world output by 2100. The Network for Greening the Financial System (NFGS) group of world central banks puts it even higher – 13%. In a Reuters poll of economists, the median figure for the output loss in that scenario was 18%.

2) WHERE IS THE IMPACT GOING TO BE FELT HARDEST? – Clearly, the developing world. Much of the world’s poor live in the tropical or low-lying regions already suffering climate change fall-out like droughts or rising sea levels. Moreover their countries rarely have the resources to mitigate such damage. The NFGS report projects overall output losses of above 15% for much of Asia and Africa, rising to 20% in the Sahel countries.

3) WHAT DOES THAT MEAN FOR INDIVIDUAL LIVELIHOODS? Climate change will drive up to 132 million more people into extreme poverty by 2030, a World Bank paper last year concluded. Factors included lost farming income; lower outdoor labour productivity; rising food prices; increased disease; and economic losses from extreme weather.

4) HOW MUCH WILL IT COST TO FIX IT? Advocates of early action say the sooner you start the better. The widely used NiGEM macroeconomic forecast model even suggests an early start would offer small net gains for output thanks to the big investments needed in green infrastructure. The same model warns of output losses of up to 3% in last-minute transition scenarios.

5) WHO LOSES OUT IN A “NET ZERO” CARBON WORLD? Primarily, anyone with fossil fuel exposure. A report by think tank Carbon Tracker in September estimated that over $1 trillion of business-as-usual investment by the oil and gas sector would no longer be viable in a genuinely low-carbon world. Moreover the IMF has called for the end of all fossil fuel subsidies – which it calculates at $5 trillion annually if defined to include undercharging for supply, environmental and health costs.

6) WHAT SHOULD CARBON REALLY COST? Tax or permit schemes that try to price in the damage done by emissions create incentives to go green. But so far only a fifth of global carbon emissions are covered by such programmes, pricing carbon on average at a mere $3 a tonne. That’s well below the $75/tonne the IMF says is needed to cap global warming at well below 2°C. The Reuters poll of economists recommended $100/tonne.

7) WOULDN’T THAT LEAD TO INFLATION? – Anything which factors in the polluting cost of fossil fuels is likely to lead to price rises in some sectors – aviation for example. That could in turn lead to what central banks define as inflation – broad-based and durable price rises across the whole economy. Yet history shows this hasn’t necessarily been the case: carbon taxes introduced in Canada and Europe pushed overall prices lower because they cut into household income and hence consumer demand, a recent study showed. It is also true that doing nothing could lead to inflation: a European Central Bank paper last year warned of food and commodity price rises from extreme weather events and the land shortages being caused by desertification and rising sea levels.

8) ARE GREEN ADVANCES REALLY DECOUPLING EMISSIONS FROM ECONOMIC GROWTH? Genuinely sustainable growth implies that economic activity can grow as needed without adding yet more emissions. This is the holy grail of “absolute decoupling”. But so far, any decoupling has either been largely relative – in the sense of merely achieving higher rates of economic growth than gains in emissions – or achieved by shifting dirty production from one national territory to another. And that is why, for now, global emissions are still rising.

9) WHO BEARS THE BRUNT OF TRANSITION? The idea of “Just Transition” has been espoused by bodies such as the European Union to acknowledge that the transition to net zero should happen in a fair way – for example by ensuring low-income groups are not made worse-off. At a global scale, the rich countries which since their industrial revolutions have generated the bulk of emissions have promised to help developing countries transition via $100 billion of annual transfers – a promise so far not fulfilled.

10) COULD THIS SPARK A FINANCIAL CRISIS? The global financial system needs to be insulated against both the physical risks of climate change itself and the upheavals likely to happen during a transition to net zero. Central banks and national treasuries are calling on banks and other financial players to come clean about the exposure of their books to such risks. The ECB and other regulators have made it clear there is a long way to go on this.

(Editing by Giles Elgood)

Business

A timeline of events in the bread price-fixing scandal

Published

8 hours ago

September 19, 2024

Anne Joseph

Almost seven years since news broke of an alleged conspiracy to fix the price of packaged bread across Canada, the saga isn’t over: the Competition Bureau continues to investigate the companies that may have been involved, and two class-action lawsuits continue to work their way through the courts.

Here’s a timeline of key events in the bread price-fixing case.

Oct. 31, 2017: The Competition Bureau says it’s investigating allegations of bread price-fixing and that it was granted search warrants in the case. Several grocers confirm they are co-operating in the probe.

Dec. 19, 2017: Loblaw and George Weston say they participated in an “industry-wide price-fixing arrangement” to raise the price of packaged bread. The companies say they have been co-operating in the Competition Bureau’s investigation since March 2015, when they self-reported to the bureau upon discovering anti-competitive behaviour, and are receiving immunity from prosecution. They announce they are offering $25 gift cards to customers amid the ongoing investigation into alleged bread price-fixing.

Jan. 31, 2018: In court documents, the Competition Bureau says at least $1.50 was added to the price of a loaf of bread between about 2001 and 2016.

Dec. 20, 2019: A class-action lawsuit in a Quebec court against multiple grocers and food companies is certified against a number of companies allegedly involved in bread price-fixing, including Loblaw, George Weston, Metro, Sobeys, Walmart Canada, Canada Bread and Giant Tiger (which have all denied involvement, except for Loblaw and George Weston, which later settled with the plaintiffs).

Dec. 31, 2021: A class-action lawsuit in an Ontario court covering all Canadian residents except those in Quebec who bought packaged bread from a company named in the suit is certified against roughly the same group of companies.

June 21, 2023: Bakery giant Canada Bread Co. is fined $50 million after pleading guilty to four counts of price-fixing under the Competition Act as part of the Competition Bureau’s ongoing investigation.

Oct. 25 2023: Canada Bread files a statement of defence in the Ontario class action denying participating in the alleged conspiracy and saying any anti-competitive behaviour it participated in was at the direction and to the benefit of its then-majority owner Maple Leaf Foods, which is not a defendant in the case (neither is its current owner Grupo Bimbo). Maple Leaf calls Canada Bread’s accusations “baseless.”

Dec. 20, 2023: Metro files new documents in the Ontario class action accusing Loblaw and its parent company George Weston of conspiring to implicate it in the alleged scheme, denying involvement. Sobeys has made a similar claim. The two companies deny the allegations.

July 25, 2024: Loblaw and George Weston say they agreed to pay a combined $500 million to settle both the Ontario and Quebec class-action lawsuits. Loblaw’s share of the settlement includes a $96-million credit for the gift cards it gave out years earlier.

Sept. 12, 2024: Canada Bread files new documents in Ontario court as part of the class action, claiming Maple Leaf used it as a “shield” to avoid liability in the alleged scheme. Maple Leaf was a majority shareholder of Canada Bread until 2014, and the company claims it’s liable for any price-fixing activity. Maple Leaf refutes the claims.

This report by The Canadian Press was first published Sept. 19, 2024.

Companies in this story: (TSX:L, TSX:MFI, TSX:MRU, TSX:EMP.A, TSX:WN)

Source link

Economy

S&P/TSX composite up more than 250 points, U.S. stock markets also higher

Published

8 hours ago

September 19, 2024

Anne Joseph

TORONTO – Canada’s main stock index was up more than 250 points in late-morning trading, led by strength in the base metal and technology sectors, while U.S. stock markets also charged higher.

The S&P/TSX composite index was up 254.62 points at 23,847.22.

In New York, the Dow Jones industrial average was up 432.77 points at 41,935.87. The S&P 500 index was up 96.38 points at 5,714.64, while the Nasdaq composite was up 486.12 points at 18,059.42.

The Canadian dollar traded for 73.68 cents US compared with 73.58 cents US on Thursday.

The November crude oil contract was up 89 cents at US$70.77 per barrel and the October natural gas contract was down a penny at US2.27 per mmBTU.

The December gold contract was up US$9.40 at US$2,608.00 an ounce and the December copper contract was up four cents at US$4.33 a pound.

This report by The Canadian Press was first published Sept. 19, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

Source link

Economy

Construction wraps on indoor supervised site for people who inhale drugs in Vancouver

Published

22 hours ago

September 18, 2024

Anne Joseph

VANCOUVER – Supervised injection sites are saving the lives of drug users everyday, but the same support is not being offered to people who inhale illicit drugs, the head of the BC Centre for Excellence in HIV/AIDS says.

Dr. Julio Montaner said the construction of Vancouver’s first indoor supervised site for people who inhale drugs comes as the percentage of people who die from smoking drugs continues to climb.

The location in the Downtown Eastside at the Hope to Health Research and Innovation Centre was unveiled Wednesday after construction was complete, and Montaner said people could start using the specialized rooms in a matter of weeks after final approvals from the city and federal government.

“If we don’t create mechanisms for these individuals to be able to use safely and engage with the medical system, and generate points of entry into the medical system, we will never be able to solve the problem,” he said.

“Now, I’m not here to tell you that we will fix it tomorrow, but denying it or ignoring it, or throw it under the bus, or under the carpet is no way to fix it, so we need to take proactive action.”

Nearly two-thirds of overdose deaths in British Columbia in 2023 came after smoking illicit drugs, yet only 40 per cent of supervised consumption sites in the province offer a safe place to smoke, often outdoors, in a tent.

The centre has been running a supervised injection site for years which sees more than a thousand people monthly and last month resuscitated five people who were overdosing.

The new facilities offer indoor, individual, negative-pressure rooms that allow fresh air to circulate and can clear out smoke in 30 to 60 seconds while users are monitored by trained nurses.

Advocates calling for more supervised inhalation sites have previously said the rules for setting up sites are overly complicated at a time when the province is facing an overdose crisis.

More than 15,000 people have died of overdoses since the public health emergency was declared in B.C. in April 2016.

Kate Salters, a senior researcher at the centre, said they worked with mechanical and chemical engineers to make sure the site is up to code and abidies by the highest standard of occupational health and safety.

“This is just another tool in our tool box to make sure that we’re offering life-saving services to those who are using drugs,” she said.

Montaner acknowledged the process to get the site up and running took “an inordinate amount of time,” but said the centre worked hard to follow all regulations.

“We feel that doing this right, with appropriate scientific background, in a medically supervised environment, etc, etc, allows us to derive the data that ultimately will be sufficiently convincing for not just our leaders, but also the leaders across the country and across the world, to embrace the strategies that we are trying to develop.” he said.

Montaner said building the facility was possible thanks to a single $4-million donation from a longtime supporter.

Construction finished with less than a week before the launch of the next provincial election campaign and within a year of the next federal election.

Montaner said he is concerned about “some of the things that have been said publicly by some of the political leaders in the province and in the country.”

“We want to bring awareness to the people that this is a serious undertaking. This is a very massive investment, and we need to protect it for the benefit of people who are unfortunately drug dependent.” he said.

This report by The Canadian Press was first published Sept. 18, 2024.

Source link