Our planet is changing. So is our journalism. This story is part of a CBC News initiative entitled Our Changing Planet to show and explain the effects of climate change and what is being done about it.
As a former central banker on two continents, Canada’s Mark Carney has honed the dark art of haranguing and arm-twisting members of the global investment community better than almost anyone.
But his latest task, as the United Nations’ special envoy on climate action and finance, involved some pretty daunting numbers.
Carney, who headed up the Bank of Canada and then the Bank of England between 2008 and 2020, was tasked to find more than $100 trillion US in capital from the global financial community to help drive the transformation of the world’s economy from fossil fuels to a new age powered by clean energy.
“It’s a mammoth transition,” Carney told CBC News at COP26, the UN’s climate change conference, in Glasgow, Scotland.
“It’s absolutely enormous. It’s bigger than global GDP.”
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On Wednesday, designated finance day at the Glasgow conference, Carney announced success, of sorts.
“We have banks, asset managers, pension funds, insurance companies from around the world — more than 45 countries — and their total resources, totalling $130 trillion US,” said Carney, $30 trillion more than the target.
“So one of the key messages of this COP is: the money is there.”
The Conference of Parties (COP), as it’s known, meets every year and is the global decision-making body set up in the 1990s to implement the United Nations Framework Convention on Climate Change and subsequent climate agreements.
Agreement leaves out big emitters
Carney says more than 450 firms — including Canada’s big five chartered banks — have committed to supporting the goals of what’s become known as the Glasgow Financial Alliance for Net Zero (GFANZ).
Net zero means countries are no longer adding heat-trapping greenhouse gases to the atmosphere. Some greenhouse gases might still be emitted, but they would be balanced off or “cancelled out” by the removal of an equivalent amount of greenhouse gases. The concept is similar to carbon neutrality but includes more than just carbon dioxide emissions.
Firms that sign onto the GFANZ agreement are promising to abide by 24 financial initiatives that will signal to their customers, shareholders and investors that they are making green investments a priority.
The initiatives include climate-related reporting of their investments and transparency about climate-related financial risks.
A flare stack lights the sky in Edmonton in December 2018. The Conference of Parties (COP) meets yearly to implement the UN’s Framework Convention on Climate Change and subsequent climate agreements. (Jason Franson/The Canadian Press)
While the agreement doesn’t compel the financial institutions to invest any specific amount of money or put it into any specific industry, Carney says it creates a new framework for them to make green investments.
“It’s about what their clients are doing, what are the emissions of their clients, the people they lend to, the people they invest in,” he said.
However, there are notable gaps.
Big banks from some of the countries with the largest emissions — China, India and Russia — are not part of the agreement.
Nor does it compel signatories to cease funding projects such as coal mines or other ventures that contribute to greenhouse gas emissions.
But Carney says if such investments happen they will draw both shareholder and public scrutiny.
Britain’s Prime Minister Boris Johnson indicates 1.5 degrees with his hands at the COP26 summit, on Tuesday. Keeping global warming to 1.5 degrees above preindustrial levels by mid-century is seen as a crucial test for the global community. (Jeff J. Mitchell/Pool/The Associated Press)
“What’s going to happen for RBC, JP Morgan … and investors around the world is they’re going to publish every year — ‘These are the emissions of my clients, and this is my plan to get them down.’ And then people are going to be able to see whether or not they’re going to come down.”
$100B fund still $20B short
COP26, hosted by the U.K. government, is expected to have difficulty reaching several of its stated objectives, including getting richer nations to fill up the coffers of a separate $100 billion fund that developing nations can tap into to help transition their economies.
At last count Tuesday, the fund was still roughly $20 billion short.
So Carney’s announcement that the financial sector will meet its target — while national governments so far have not — will be welcome news for the government of U.K. Prime Minister Boris Johnson.
In Glasgow, anticipating Carney’s announcement today, climate campaigners expressed caution about the will of the banking sector to be a force for good in climate mitigation and adaptation.
“We all need the financial system to shift — but if we start celebrating, that is going to give us the impression that we’re already there and we’re not,” said Eddie Perez of Climate Action Network Canada.
NDP Leader Jagmeet Singh, seen here in Gatineau, Que., in October 2019, warns financial institutions could use the Carney initiative to ‘green wash’ their fossil fuel investments. (Justin Tang/The Canadian Press)
For example, he says Royal Bank claims it is a climate champion but continues to invest heavily in Canada’s oil sector.
“I think everything that gets us closer to 1.5 degrees is something that we should look up to, but we need to be much more. We have to scrutinize the strategy to see what comes out of it,” Perez said.
The goal of keeping global warming to 1.5 degrees above preindustrial levels by mid-century is seen as a crucial test for the global community.
NDP cautions against empty promises
NDP Leader Jagmeet Singh, who’s also at COP26 this week, says there’s a risk that banks and other financial institutions will use the Carney initiative to essentially “green wash” their fossil fuel investments to make them appear more politically acceptable.
“It is actually a net impact that benefits the fight against a climate crisis? Or is this just a symbolic gesture that doesn’t actually make any concrete difference in the fight?” Singh asked.
Former Liberal environment minister Catherine McKenna praised Carney’s work, but she too stressed the need for the financial sector to increase transparency.
“People need to know, where are they investing? Are they continuing to invest in coal?” McKenna told CBC News.
WATCH | PM Justin Trudeau pitches global carbon tax at COP26:
Trudeau pitches global carbon prices at COP26
15 hours ago
Prime Minister Justin Trudeau used his platform at COP26 to pitch a global carbon pricing program. Though several European countries are on board, it’s a tough sell without the support of big emitters like the U.S. or China. 2:00
As evidence that the agreement is already making a difference, a statement released Wednesday morning claims that 90 institutions that first signed on to GFANZ have already committed to reducing their portfolio emissions by 25-30 per cent within four years.
It also says 38 central banks in countries comprising 67 per cent of the world’s emissions have started to transform their risk-management system to better account for climate-related risk.
Carney says the agreement is the beginning of what he expects will be a long process to win over public trust that the financial sector can help bring about positive climate change.
“The only way you convince people, and the only way people should be convinced, is through a track record of emissions reduction. So it starts from here.”
Have questions about this story? We’re answering as many as we can in the comments.
OTTAWA – Canada’s unemployment rate held steady at 6.5 per cent last month as hiring remained weak across the economy.
Statistics Canada’s labour force survey on Friday said employment rose by a modest 15,000 jobs in October.
Business, building and support services saw the largest gain in employment.
Meanwhile, finance, insurance, real estate, rental and leasing experienced the largest decline.
Many economists see weakness in the job market continuing in the short term, before the Bank of Canada’s interest rate cuts spark a rebound in economic growth next year.
Despite ongoing softness in the labour market, however, strong wage growth has raged on in Canada. Average hourly wages in October grew 4.9 per cent from a year ago, reaching $35.76.
Friday’s report also shed some light on the financial health of households.
According to the agency, 28.8 per cent of Canadians aged 15 or older were living in a household that had difficulty meeting financial needs – like food and housing – in the previous four weeks.
That was down from 33.1 per cent in October 2023 and 35.5 per cent in October 2022, but still above the 20.4 per cent figure recorded in October 2020.
People living in a rented home were more likely to report difficulty meeting financial needs, with nearly four in 10 reporting that was the case.
That compares with just under a quarter of those living in an owned home by a household member.
Immigrants were also more likely to report facing financial strain last month, with about four out of 10 immigrants who landed in the last year doing so.
That compares with about three in 10 more established immigrants and one in four of people born in Canada.
This report by The Canadian Press was first published Nov. 8, 2024.
The Canadian Institute for Health Information says health-care spending in Canada is projected to reach a new high in 2024.
The annual report released Thursday says total health spending is expected to hit $372 billion, or $9,054 per Canadian.
CIHI’s national analysis predicts expenditures will rise by 5.7 per cent in 2024, compared to 4.5 per cent in 2023 and 1.7 per cent in 2022.
This year’s health spending is estimated to represent 12.4 per cent of Canada’s gross domestic product. Excluding two years of the pandemic, it would be the highest ratio in the country’s history.
While it’s not unusual for health expenditures to outpace economic growth, the report says this could be the case for the next several years due to Canada’s growing population and its aging demographic.
Canada’s per capita spending on health care in 2022 was among the highest in the world, but still less than countries such as the United States and Sweden.
The report notes that the Canadian dental and pharmacare plans could push health-care spending even further as more people who previously couldn’t afford these services start using them.
This report by The Canadian Press was first published Nov. 7, 2024.
Canadian Press health coverage receives support through a partnership with the Canadian Medical Association. CP is solely responsible for this content.
As Canadians wake up to news that Donald Trump will return to the White House, the president-elect’s protectionist stance is casting a spotlight on what effect his second term will have on Canada-U.S. economic ties.
Some Canadian business leaders have expressed worry over Trump’s promise to introduce a universal 10 per cent tariff on all American imports.
A Canadian Chamber of Commerce report released last month suggested those tariffs would shrink the Canadian economy, resulting in around $30 billion per year in economic costs.
More than 77 per cent of Canadian exports go to the U.S.
Canada’s manufacturing sector faces the biggest risk should Trump push forward on imposing broad tariffs, said Canadian Manufacturers and Exporters president and CEO Dennis Darby. He said the sector is the “most trade-exposed” within Canada.
“It’s in the U.S.’s best interest, it’s in our best interest, but most importantly for consumers across North America, that we’re able to trade goods, materials, ingredients, as we have under the trade agreements,” Darby said in an interview.
“It’s a more complex or complicated outcome than it would have been with the Democrats, but we’ve had to deal with this before and we’re going to do our best to deal with it again.”
American economists have also warned Trump’s plan could cause inflation and possibly a recession, which could have ripple effects in Canada.
It’s consumers who will ultimately feel the burden of any inflationary effect caused by broad tariffs, said Darby.
“A tariff tends to raise costs, and it ultimately raises prices, so that’s something that we have to be prepared for,” he said.
“It could tilt production mandates. A tariff makes goods more expensive, but on the same token, it also will make inputs for the U.S. more expensive.”
A report last month by TD economist Marc Ercolao said research shows a full-scale implementation of Trump’s tariff plan could lead to a near-five per cent reduction in Canadian export volumes to the U.S. by early-2027, relative to current baseline forecasts.
Retaliation by Canada would also increase costs for domestic producers, and push import volumes lower in the process.
“Slowing import activity mitigates some of the negative net trade impact on total GDP enough to avoid a technical recession, but still produces a period of extended stagnation through 2025 and 2026,” Ercolao said.
Since the Canada-United States-Mexico Agreement came into effect in 2020, trade between Canada and the U.S. has surged by 46 per cent, according to the Toronto Region Board of Trade.
With that deal is up for review in 2026, Canadian Chamber of Commerce president and CEO Candace Laing said the Canadian government “must collaborate effectively with the Trump administration to preserve and strengthen our bilateral economic partnership.”
“With an impressive $3.6 billion in daily trade, Canada and the United States are each other’s closest international partners. The secure and efficient flow of goods and people across our border … remains essential for the economies of both countries,” she said in a statement.
“By resisting tariffs and trade barriers that will only raise prices and hurt consumers in both countries, Canada and the United States can strengthen resilient cross-border supply chains that enhance our shared economic security.”
This report by The Canadian Press was first published Nov. 6, 2024.
