As COP27 kicks-off in Sharm El Sheikh, Egypt, Canada remains at a crossroads on its path to net-zero.
Canada remains a global leader in the production of sustainable energy. Our nation benefits from hydro power, nuclear expertise, vast repositories of critical minerals and a growing array of renewable energy sources and clean technologies, including carbon capture, utilization and storage deployment.
At the same time, Canada is currently among the world’s largest per-capita emitters of greenhouse gas emissions—with current levels more than double the average of G20 nations.
Six years after the Paris Agreement at COP21, which saw world leaders commit to keep global warming below 2°C (3.6°F) above pre-industrial levels, it is clear that Canada—including all levels of government and the private sector—needs to step up.
As the preeminent decision-making forum of the United Nations Framework Convention on Climate Change (UNFCCC), the “Conference of Parties” (COP) brings together signatory governments to discuss joint efforts on climate change.
This year’s meeting is met with growing urgency for Canada to take action on its climate commitments. Moving beyond the political concessions witnessed at last year’s Glasgow meeting, it is important to recognize the potential of COP27.
First, there is an opportunity for Canada to start pulling ahead of its peers and become a global climate leader. Building off its successful bid in November 2021 to host the International Sustainability Standards Board (ISSB), Canada’s governments can lean on the Montreal-based ISSB office to help accelerate the leveraging of private capital that will be required to support Canada’s low-carbon transition.
A coalition of 55 public and private institutions, including the federal government, have pledged tens of millions of dollars towards the ISSB project, indicating clear support across public and private sectors. With a phased-in approach to mandatory climate-related disclosures set to begin for federally regulated financial institutions like banks and insurance companies in 2024, and $9 billion in proposed climate funding as part of Canada’s Budget 2022, the country will need to leverage the ISSB’s mandate to standardize sustainability reporting to help companies and investors better understand the risks they face.
If coordinated properly, these efforts will spur the innovation required to build new solutions and emerging technologies (e.g. blue hydrogen, small-modular reactors, direct air capture, and carbon capture, utilization and storage), bring down costs and incentivize investment in a clean energy sector that already contributes more than $70 billion to Canada’s GDP while supporting more then 282,000 high-paying jobs, according to Statistics Canada.
Second, recurring COP meetings provide an opportunity to strike additional global climate deals. Participating in more ambitious inter-governmental collaboratives would help align Canada’s decarbonization efforts with its responsibility to reduce its fair share of global emissions.
Prior to the pending summit, Canada has submitted a new nationally determined contribution target to the United Nations – updating its pledge under the Paris Agreement to reduce emissions by 2030 by 40% to 45% from 2005 levels. Last year’s COP also saw Canada become a joint signatory on efforts to stop deforestation and cut methane emissions by 30% by 2030.
Even in scenarios where governments fail to reach these shared targets, global agreements send an important message to the rest of the world that they are serious about building a climate-safe future and that there is mutual accountability to climate action.
With “collaboration” serving as one of COP 27’s four central themes, Canada might look to the Glasgow Financial Alliance for Net-Zero (GFANZ) as a model by which to structure future agreements. Bringing together more than 550 firms across 50+ jurisdictions, GFANZ works in collaboration with the UNFCCC Race To Zero campaign to coordinate independent, sector-specific alliances across all economic sectors.
Helping governments mobilize a race to the top on climate ambition, the work of GFANZ demonstrates the potential that lies at the heart of collaborative global agreements while supporting notable progress on: 1) net-zero transition planning for financial institutions, 2) mobilizing capital for emerging markets and developing economies, and 3) supporting the implementation of public policies and regulations.
Lastly, COP27 serves as a stark reminder that we are running out of time to mitigate the worst impacts of climate change. Outlined in a 2018 research publication led by Will Steffen and Johan Rockstrom of Harvard University, the result of human greenhouse gas emissions and biospheric degradation has put earth on a “Hothouse Earth” pathway. The team of climate scientists go on to explain that this trajectory puts earth systems at risk of surpassing “tipping points” along ten natural processes once the earth warms to 2°C (3.6°F) over pre-industrial times.
This has created a daunting scenario. If we are to have any chance of limiting warming to the preferred 1.5°C, global emissions must be halved by 2030 and reach ‘net-zero’ by 2050 according to the Intergovernmental Panel on Climate Change. If not, Canada will face much greater risk, by guaranteeing a climate that is 4-5°C (7-9°F) higher than pre-industrial times, sea levels that are 10 to 60 meters (30-200 feet) higher than today and global average temperatures that soar beyond anything witnessed over the past 1.2 million years.
The reality remains that Canada is at a crossroads heading into COP27. To secure a prosperous and sustainable future, Canada must build off its unparalleled access to human and natural capital, move past its record of missed climate targets and seize the opportunity. Using COP as a springboard to enhance collaborative and climate finance mechanisms, Ottawa can advance its mitigation and adaptation efforts in line with its clean energy and infrastructural strengths. In doing so, they help public and private organizations move beyond stated ambitions towards a clean and resilient future.
David Billedeau is the senior director of natural resources, environment and sustainability at the Canadian Chamber of Commerce. Nicholas Palaschuk is the economic policy researcher at the Canadian Chamber of Commerce.