4 low-cost, high-impact ways for Canada to lower emissions

In a train rushing from Ottawa to Toronto last Monday morning were all variety of environmentalists, government officials, civic-minded analysts and lobbyists, all with emissions on their minds.

They were armed with good ideas and ambition, and so they were on their method to meet money — the companies that can, in theory, put money into those ideas to the tune of a whole bunch of billions and make them a reality.

But provided that the conditions are right.

And there’s the conundrum of climate change, the challenge of our times. Corporations alone — regardless of what their environmental, social, and governance (ESG) commitments are, regardless of what their shareholders and markets nudge them to do — are unlikely to do enough on their very own to crush emissions.

And policymakers actually can’t give you enough money to do it themselves, especially because the amounts of investment needed to compete with america and the European Union are giant.

Over the approaching month, we as a rustic will likely be hashing out how we is not going to just cut emissions as required, but additionally how we could pay for that effort, make some money and set ourselves up for profitability over the long term.

Attracting much-needed investment

In the subsequent few weeks, Prime Minister Justin Trudeau will meet with the presidents of each the European Union and america, partly to evaluate where their well-funded incentives on climate will leave Canada and its ability to draw much-needed investment.

After which comes the federal budget, with its measures and spending to make sure Canadian business can sustain with the American and European Joneses.

“The federal government’s job is to take heed to the private sector on what one of the best market signals are to mobilize private capital toward meeting our climate change objectives,” Environment Minister Steven Guilbeault told those train-riders and their colleagues on the downtown Toronto conference that pulled all of them together.

His comments were clearly meant to signal to Bay Street that his government is all in.

This sort of talk could cost us an incredible sum of money in the subsequent budget and afterwards, if the federal government will not be strategic in the way it uses its fiscal power. But there are some smart things government and business could do fairly quickly that wouldn’t break the bank, and so they appear to be coming together.

Sustainable finance

For one, we appear to be closer to defining how sustainable finance can work.

After years of dialogue and half-hearted voluntary measures, public and private-sector players have finally reached a typical understanding on what should qualify as a full-blown green investment, what needs to be considered useful for the energy transition, and what needs to be excluded altogether.

Definitions are only concepts, in fact, and so they won’t solve every problem around unlocking private-sector investment.

But they do set an ordinary for what counts and what doesn’t. And that ought to help everyone higher understand whether firms and investors are literally cutting emissions or whether or not they’re just engaged in greenwashing.

Higher yet, definitions don’t increase the federal deficit. They add clarity, they instill confidence, and so they don’t really cost taxpayers anything.

Guaranteed price on carbon

Similarly, hopes are high that the federal government’s talk of issuing “contracts for difference” will soon be a reality. These contracts guarantee investors a price on carbon over time, carbon politics be damned.

The federal Liberals promised as much last spring, and committed within the Fall Economic Statement to embed them into the Canada Growth Fund when it finally launches — likely soon.

They’re useful because Canada has a tumultuous history of carbon policy, with radical changes coming with recent political configuration on the federal level. Why would anyone invest on the idea of carbon eventually trading at $170 a tonne when they think the subsequent iteration of presidency might dismantle that price? Or if they think the marketplace for trading carbon won’t actually work properly?

Designed properly, contracts for difference could inject some confidence into the marketplace and unleash a few of those billions low-carbon advocates are so desperately in search of.

A lift to Indigenous interests

Financing instruments aside, we also can hope the federal budget gives a lift to Indigenous interests who wish to buy equity stakes in energy and natural resource projects.

Obviously, basic respect in addition to quite a few court rulings have made clear to anyone hoping to develop projects in Canada that they absolutely must fully involve Indigenous Peoples whose interests are in play. Taking an ownership stake is one enticing method to do that, but access to capital will not be a given, mainly because collateral is tough to come back by.

But when the federal government were to step in with federal loan guarantees, that equation looks lots more promising — again at no immediate hit to the federal deficit.

Which brings us to the touchy subject of presidency approvals for resource projects. Canada’s fame is of a rustic where approval to get things done takes way too long. The regime changes with every passing government — form of like climate policy.

And now, our American and European allies want us to think by way of working with them on energy security. Could we not discover a method to fast-track projects that meet those expectations?

Obviously, the federal budget will contain money and measures that can aim at igniting the clean economy, pulling in great ideas and massive investment. And if those policies are designed to reinforce quite than simply subsidize, they need to deliver returns in the shape of growth, jobs, trade and lower emissions.

But certainty and clarity are only as vital, and so they don’t cost nearly as much.