Climate Prosperity The Economic Risks And Opportunities Of Climate Change For Canada

Climate Prosperity is a comprehensive, two-year policy research and advisory program being undertaken by the National Round Table on the Environment and the Economy on the economic risks and opportunities to Canada of climate change. Examining what the physical impacts of a warming climate will mean to our environment and what a global low-carbon transition will mean to our economy, Climate Prosperity will offer new insights and analysis into shaping Canada's public policy responses to this most extraordinary challenge.

Climate Prosperity is a comprehensive, two-year policy research and advisory program being undertaken by the National Round Table on the Environment and the Economy on the economic risks and opportunities to Canada of climate change. Examining what the physical impacts of a warming climate will mean to our environment and what a global low-carbon transition will mean to our economy, Climate Prosperity will offer new insights and analysis into shaping Canada's public policy responses to this most extraordinary challenge.

Canada’s Top Climate Change Risks identifies the top risk areas based on the extent and likelihood of the potential damage, and rates the risk areas according to society’s ability to adapt and reduce negative outcomes. These 12 major areas of risk are: agriculture and food, coastal communities, ecosystems, fisheries, forestry, geopolitical dynamics, governance and capacity, human health and wellness, Indigenous ways of life, northern communities, physical infrastructure, and water. The report describes an approach to inform federal risk prioritization and adaptation responses. The Panel outlines a multi-layered method of prioritizing adaptation measures based on an understanding of the risk, adaptation potential, and federal roles and responsibilities.

Ending poverty and stabilizing climate change will be two unprecedented global achievements and two major steps toward sustainable development. But the two objectives cannot be considered in isolation: they need to be jointly tackled through an integrated strategy. This report brings together those two objectives and explores how they can more easily be achieved if considered together. It examines the potential impact of climate change and climate policies on poverty reduction. It also provides guidance on how to create a “win-win†? situation so that climate change policies contribute to poverty reduction and poverty-reduction policies contribute to climate change mitigation and resilience building. The key finding of the report is that climate change represents a significant obstacle to the sustained eradication of poverty, but future impacts on poverty are determined by policy choices: rapid, inclusive, and climate-informed development can prevent most short-term impacts whereas immediate pro-poor, emissions-reduction policies can drastically limit long-term ones.

Canada is highly dependent on the emission intensive sectors and at the same time, sectors that are vulnerable to variations in weather and extreme events. This makes the Canadian economy especially vulnerable to the impacts of climate change and any efforts to address it. The financial services sector is responsible for the provision of capital to all economic sectors and, therefore, it must consider all climate change-related risks and opportunities in its capital allocation decisions. This study explores the perception of climate change by the financial services sector in Canada and the extent of the sector's response to climate-related impacts to date. The study adopted an institutional view of isomorphism to explain the behaviours of the financial sector in relation to climate change. The research was conducted through qualitative analysis of interviews with representatives of the Canadian financial sector and a review of the latest available responses to the Climate Disclosure Project's (CDP) climate change questionnaire. The research's primary focus was on climate change consideration in the lending and investment portfolios of the financial institutions. The research involved investigation of the industry's awareness of five climate-related risks - physical, reputational, regulatory, litigation, and transition risks - in the Canadian context and the level of substantive actions taken by participating institutions. The study found that the level of the sector's preparedness is low because coercive, normative, and mimetic isomorphic pressures have only existed for a short time. The Canadian financial institutions are in early stages of exploring climate change-related risks and opportunities for their lending and investment businesses. The study concludes with recommendations for the industry and proposals for further research on climate-related risks and opportunities for the financial sector through quantitative methods.

A central question in Canadian climate policy remains, "What of the United States?" Uncertainty about American climate policy colours and shapes Canada's own policy choices and direction. By necessity, our integrated economies require serious consideration of harmonizing Canadian climate policy with that of the United States. But different energy economies and greenhouse gas emission profiles in the two countries create different economic and environmental implications for Canada as we pursue a harmonized policy approach.