There is a need to address climate change policy, or lack thereof, but what level of governance is best able to handle this colossal task? Based on the recent events hosted by CIGI’s Global Economy program, I would argue all levels of governance have a role to play in addressing climate change and the financing of sustainable policies. The consequences of doing nothing affect every level of government in Canada as well as having negative global outcomes that stretch far beyond our borders. How can Canada be a leader in sustainable policy and move from a high carbon to low carbon economy? In order to effectively use international forums, such as the G20, to promote sustainable policies, Canada needs to lead by example on a domestic governance level.
At the recent CIGI hosted Think 20 (T20) Ottawa Conference, the main focus was on prioritizing international monetary and financial cooperation which remains a traditional responsibility of the G20. The T20 is meant to act as an ideas bank to inform the G20 Finance Ministers’ meetings and ultimately the Leaders’ Summit. In Ottawa, the high-level T20 gathering continually drifted toward the idea of the G20 expanding their mandate into major global governance challenges that are outside their traditional functions. The final panel of the conference focused on ‘Addressing Environmental and Sustainability Risks through Financial Regulatory Reforms’ which made evident the entanglement of finance and climate change.
The upcoming G20 in November is immediately before the 21st session of the Conference of the Parties (COP) to the UNFCCC taking place in December 2015, in Paris, France. The failure of the global climate change talks to date is attributed to the framing of the issue itself. Climate is framed as an environmental problem only instead of a financial market-based issue or a public safety issue. The issue ought to be considered one that crosses all traditional categorizations of policy and all levels of governance. What will Canada be able to contribute to the discussion at G20 and at the COP to the UNFCCC?
On May 6, 2015 at CIGI in Waterloo, Professor Chris Ragan from Canada’s Ecofiscal Commission presented their first report The Way Forward that presents a “radically” practical approach to climate change policy and carbon pricing specifically. The focus of the report is on Canada’s domestic policies advocating for a province-by-province approach to moving from a high carbon to low carbon economy. Arguably a pricing approach to emissions would provide a financial incentive to emitters to reduce their emissions so they would pay less overall for their activities. The long term goal is not only to reduce the overall emissions, but to incentivize innovative technologies that may be used in Canada that emit less. The benefit of having the pricing as a function of each individual province is that they may build in their specific industry details into the policy. Examples of provincial leadership in this area can be found in British Columbia, Quebec, Alberta, and most recently announced in Ontario. The report explains there is an additional benefit if all provinces are able to harmonize the price placed on emissions. Each province faces their own climate change issues, increasingly becoming public safety issues, and taking no action is no longer an option. There remains a role for the national government in representing Canada on the issue at international bodies and handling any cross-border issues that may arise from provinces having varied emission pricing. If Canada were able to reduce emissions moving to a low carbon economy with the Ecofiscal Commission’s model or a similar model, it would be able to bring a successful governance example to the table at global forums.
Thoughtful view on sub-national areas & carbon emissions, but no substitute for action at national/global levels http://t.co/UrMxw4jQut— Rohinton P. Medhora (@RohintonMedhora) May 6, 2015
Change is happening and Canada should not be content with remaining a free rider. The costs of not taking action on climate change continue to increase as time passes; the financial costs and the social costs. This is the governance challenge of the present generation and will increase in importance for future generations that will begin to deal with the increase in natural disasters, health related issues, and public safety issues. If Canada can get to a point where low carbon policy is integrated into financial decisions, it will be the start of mitigating some of the impending climate change effects. Addressing climate change is the responsibility of every level of governance, and Canada has an opportunity to lead by example on a domestic level and an international level.