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Investment and trade to meet the Paris climate goals

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Mr. President

HE Arifin Tasrif, Minister for Energy & Mineral Resources of Republic of Indonesia

Excellencies, guests

Money talks, they say. Well, right now, money is whispering when it comes to climate action. Yes, global climate finance flows – public and private, domestic and international – have been growing in volume. They reached USD 632 billion per year for 2019–2020. But we need an increase of at least 590 per cent in annual climate finance to get on track for the goals of the Paris Agreement.

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Climate financing for developing countries also fell short of the goal of USD 100 billion per year by 2020. While we are getting closer to the goal, we need to get to the USD 100 billion as soon as possible.  Financing for adaptation – which developing nations need desperately given the climate impacts already locked in – is particularly weak.

The picture is just as miserly for nature, which we need to back to end the triple planetary crisis of climate change, nature and biodiversity loss, and pollution and waste. Global investments that degrade nature exceed conservation efforts by USD 600-852 billion annually.

We need to turn this equation on its head. In fact, we need to turn the financial system on its head, shake its pockets and get the money to where it needs to go. Let’s consider the four key areas in which we can shake things up.

One, public investments must get bigger and more efficient.

We all know that public purses opened far wider when COVID-19 descended. Trillions of dollars poured out of these purses to deal with and recover from the pandemic. Funding for the climate crisis must hit similar levels.

Yet today, when the world is in an energy crisis caused by gas supply issues, the response is to secure replacement gas instead of switching to clean sources of energy that are not vulnerable to geo-political shocks. At the same time, governments are spending around half a trillion each year subsidizing fossil fuels.

Switching fossil fuel subsidies to renewable energy and energy efficiency is the way forward. Taking the transformation opportunities offered by global crises is the way forward. A well-designed carbon price to incentivize decarbonization and increase financing is the way forward.

Two, private finance must step up.

The public sector alone cannot finance transformation. Mobilizing the USD 3-6 trillion needed each year to transition to net-zero-emissions and climate-resilient economies by 2050 will need private finance to align with these efforts.

The UNEP Finance Initiative, which is celebrating its 30th anniversary, works with members to develop frameworks and partnerships that allow financial institutions to strategically align financial flows with sustainable, prosperous growth.

The finance initiative does this through three finance sector alliances on net-zero. The Net-Zero Asset Owners Alliance, whose membership spans over 75 institutional asset owners with over USD 11 trillion in assets. The Net Zero Banking Alliance, with 116 banks and USD 70 trillion in assets. And the Net-Zero Insurance Alliance, which has convened over 29 leading global and regional insurers from across the world.

Members of the three alliances follow established positions on phasing out portfolio exposure to coal, oil and gas assets. Members are expected to adopt such positions as their own or explain why they cannot. Basically, they are there to commit, not greenwash.

Three, the public and private sectors must work together on creating an enabling environment.

Close collaboration between policymakers, development banks, real economy and financial institutions would enable financial sectors to invest in segments that they would not be able to invest in otherwise.

For example, the Net-Zero Asset Owners Alliance is spearheading a push for blended finance, which uses public and philanthropic capital to improve the risk/return profiles of investment opportunities for the private sector. Through its September 2022 Call on Policymakers to support Scaling Blended Finance, the alliance provided suggestions on how public capital could be utilized more to ramp-up investments in emerging economies or innovative green technologies.

There are many other approaches that could work. The main barrier to large-scale private capital flows in emerging markets is typically a high level of country risk. For public resources to be effective in mobilizing private capital, they need to include significant de-risking and provision of finance at a facility level, rather than on a project-by-project basis.

Public investments can also go beyond government support of research and development and expand into the manufacturing and deployment of new technology.

Four, trade can and should support the decarbonization of economies.

International trade accounts for over 50 per cent of global GDP, so trade can play a crucial role in decarbonizing key sectors of our economy and building resilience to future shocks. According to the International Resource Panel, one-third of material resources extracted is linked to production for trade. Resource extraction and processing is a major contributor to emissions. So, a circular economy model where materials and commodities are reused and repurposed can slash emissions. Trade policy can promote the circular economy transition through standards in trade-related production and processing, with the support of digital technology on supply chains.

We can also look at reducing barriers to trade in low-carbon technologies, which are more prevalent than barriers to trade in fossil fuels. The rise of Regional Trade Agreements offers new opportunities for countries to cooperate and coordinate trade policies in support of environmentally sound and energy-efficient technologies.

Improving alignment and compatibility between climate finance and Aid for Trade can also help. Most Aid for Trade to least developed economies is targeted at the transportation, agriculture and energy sectors, which are big emitters. At the same time, many of the donors that provide mitigation and adaptation finance are also involved in trade-related assistance. This gives us room to manoeuvre.

We are initiatives in trade. Costa Rica, Fiji, New Zealand, Norway and Switzerland launched the concept of an Agreement on Climate Change, Trade and Sustainability at the WTO. In addition, around 20 WTO members are exploring a coalition of trade ministers on climate.

But greater cooperation on trade will be vital to meeting the Paris climate goals.

So, I said at the beginning, climate finance is still whispering. We need to make it roar. Through public and private means. Through trade. Through the UN system and multilateral development banks. Through every means necessary. This is how we turn around our societies and economies. How we hit net-zero. How we finally get humanity back to living in harmony with nature so that we can all live healthy, equitable and prosperous lives.

Thank you.

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Investment

The new rules of investment – The Economist

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High inflation, amid warnings of a global recession, is forcing investors to tear up the rule book. Since the financial crisis, bonds have been seen as a safe bet—even if they did not promise much of a return. Equity markets, led by soaring tech stocks, were where fortunes were made. Both have plunged this year.

In a world where rising interest rates have left governments worrying about how to afford their debts, and companies will struggle to raise cash, investors need new strategies.

On this week’s podcast, hosts Alice Fulwood, Soumaya Keynes and Mike Bird ask what those new rules of investing look like. Wei Li, global chief investment strategist for the world’s biggest investor, BlackRock, argues this new macroeconomic era is here to stay. And Mohamed El-Erian, chief economic adviser to Allianz, says investors need to focus on picking winners within stocks and bonds. Runtime: 39 min

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Proposed sovereignty act could scare off investment: Calgary chamber – Calgary Sun

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‘We still don’t see how an act like this contributes to economic growth,’ said chamber President and CEO Deborah Yedlin

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The Alberta Sovereignty within a United Canada Act, tabled by Premier Danielle Smith on Tuesday, could drive investment out of the province, the Calgary Chamber of Commerce warns.

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Chamber president and CEO Deborah Yedlin said the bill, which would allow cabinet to issue directives to disregard federal initiatives, would not help businesses attract investment or employees should it pass the legislature.

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“We still don’t see how an act like this contributes to economic growth,” said Yedlin, adding that Alberta competes around the world for labour and capital, and that any hints of uncompetitiveness or uncertainty could cause the province to be seen as an unfavourable jurisdiction to invest in.

The act was the keystone policy of Smith’s leadership campaign this summer. If passed, Bill 1 would allow ministers to bring motions forward to the Alberta legislature to debate whether a federal initiative is unconstitutional or harmful to Alberta. If the initiative is deemed as such, the legislature could pass a resolution that would direct cabinet to take action, which could include issuing directives to public entities to not enforce the federal policy.

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Government documents argue the bill would not do anything to harm Alberta’s economy. The premier’s office did not return requests for comment Wednesday.

  1. Alberta Premier Danielle Smith makes her way to a press conference after the Speech from the Throne in Edmonton, on Tuesday, November 29, 2022.

    Smith introduces flagship Alberta Sovereignty Within a United Canada Act, giving cabinet new power

  2. Prime Minister Justin Trudeau at the APEC summit in Bangkok, Thailand on Friday, Nov. 18, 2022. THE CANADIAN PRESS/Sean Kilpatrick

    Trudeau says Ottawa ‘not looking for a fight’ on Alberta Sovereignty Act

  3. Alberta Premier Danielle Smith speaks at a press conference after the Speech from the Throne in Edmonton, on Tuesday, November 29, 2022.

    A look at how Alberta’s proposed sovereignty act would work

  4. The Fourth Session of the 30th Legislature opened on November 29, 2022, with Her Honour the Honourable Salma Lakhani, Lieutenant Governor of Alberta, delivering the Throne Speech.

    Alberta Lt.-Gov. Salma Lakhani delivers Throne Speech focused on affordability, health-care reform, jobs, and fighting Ottawa

Speaking Tuesday, Smith said the bill is intended to put Ottawa on notice about provincial jurisdiction and ensure they are equal partners within Canada’s Constitution.

Yedlin argued the act does not allow for constructive conversations with the federal government and that all levels of government need to collaborate to make Alberta an attractive place to invest and to work, stating the province has to compete with jurisdictions from all corners of the globe.

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“This could cause us problems within Canada with other provinces, as well as with Ottawa. That’s not what we need right now,” said Yedlin. “We have worked with Ottawa in the past, perhaps not to Premier Smith’s satisfaction, but I would argue that, you know, let’s dial back.”

Yedlin said Quebec lost investment when that province grappled with the idea of separation. She said that while Smith’s bill makes it clear it is not about separating, just the idea of uncertainty could cause investors to look elsewhere.

Calgary Chamber CEO Deborah Yedlin.
Calgary Chamber CEO Deborah Yedlin. Azin Ghaffari/Postmedia

Lisa Baiton, president and CEO of the Canadian Association of Petroleum Producers, said they are taking time to review the bill with their members. She said they are concerned about any policy that has the potential to create uncertainty for investors.

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“It is important for governments at all levels to work together with the industry in order to attract investment back into Canada,” said Baiton.

Finance Minister Travis Toews was critical of the sovereignty act while he ran against Smith in the leadership contest. At the time, he argued the bill would bring “economic chaos” to Alberta.

On Wednesday, he acknowledged he had legitimate concerns during the summer but said he has since had full opportunity to participate in the development of the bill along with his caucus colleagues, and that it addresses his previous concerns.

For me to support this bill it has to be constitutional, support the rule of law and not create business uncertainty. This bill, as proposed, addresses these concerns,” Toews said in a statement.

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Alberta Finance Minister Travis Toews, file photo.
Alberta Finance Minister Travis Toews, file photo. Darren Makowichuk/Postmedia

Meanwhile, several groups that could fall under the “public entity” definition of the act and could be subject to ministerial directives said they need to read the bill further before providing comment.

University of Calgary representatives said the school was reviewing the bill and will seek clarity on its application if passed. Mount Royal University representatives said they, too, are reviewing the bill and will work with the province on how it applies to post-secondary institutions.

The Rural Municipalities of Alberta declined to provide comment. While speaking at an unrelated news conference, Leduc Mayor Bob Young said they hadn’t had a chance to look at the bill and how it would affect municipalities.

Alberta Municipalities said they are reviewing the bill and that it appears to allow the cabinet to direct municipalities to not enforce federal laws. They said they may have more to say once their analysts have fully reviewed the legislation.

dshort@postmedia.com

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Clinton Orr, Canaccord Genuity, earns Canada’s Top Wealth Advisor award

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Clinton Orr is a Senior Portfolio Manager and Senior Wealth Advisor, CFP, CIM, DMA, DMS, with Canaccord Genuity Wealth Management. Recently, he was recognized as one of Canada’s Top Wealth Advisors in the province. The recognition is based on an independent affirmation of his ongoing commitment to his clients and their financial success.

This prestigious award is given based on a number of factors, including client service and best practices, industry experience, and growth. This has established Orr and his firm as a leader in the wealth management industry.

Canada’s Top Wealth Advisors ranking is developed and distributed by SHOOK Research, and is based on in-person, virtual, and telephone due diligence meetings and ranking algorithms. This algorithm factors in client retention, industry experience, review of compliance records, and firm nominations.

Quantitative criteria include assets that are under management as well as revenue generated for their firms. Investment performance is not considered criteria, because client objectives and risk tolerances vary, and advisors often don’t have audited performance reports.

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Who is Clinton Orr?

Clinton Orr is a financial services professional who earned his start in the industry in 2003. He is a founding member of Becker Orr Wealth Management, a branch of Canaccord Wealth Management, and is a Senior Wealth Advisor and Senior Portfolio Manager with Canaccord Genuity.

Clinton Orr has been able to successfully establish relationships with his clients, who consist of business owners, retirees and professionals. His success in the wealth management space has been achieved through dedication, hard work, a love for the profession, and genuine compassion and caring for his clients.

Orr has been able to set himself apart by developing a strong team and utilizing a unique process called Financial Architecture, which allows him and his team to build customized financial plans that address all of their clients’ needs.

Orr earned a Bachelor’s of Commerce degree and has earned professional designations in financial planning, investment management, and derivatives markets. He has previously been recognized for his efforts in 2021, winning the Wealth Management Advisor of the Year for Canada, as a part of Finance Monthly’s Global Awards. He was also the central region winner of the Client Dedication Award presented by Canaccord Genuity.

Orr is a regular contributor to the Clipper Weekly, providing his professional insights in a regular column that is published monthly. He also makes regular appearances on Global News Winnipeg.

Orr lives with his wife, Jodi, in rural Manitoba where they operate their own charitable initiative, the Pet Life Animal Fund. Both are passionate dog lovers who enjoy giving back.

When Clinton Orr isn’t working, he trains in Jiu-Jitsu and currently holds a blue belt. He and his wife also enjoy spending plenty of time together watching the Winnipeg Jets and the Winnipeg Blue Bombers.

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