The transition to a low-carbon economy (LCE) has started to take hold in Canada but there remains a lot of unanswered questions on how it will unfold. A recent paper from the Smart Prosperity Institute highlighted many of them.
What’s known is the federal government along with a number of other provinces have (or will soon) put a price on carbon. There have also been substantial public investments in clean technology innovations in a range of sectors. In addition, complementary policies have been put in place to fill the gaps that pricing carbon emissions can’t address. These are all great first steps, but more needs to be done, according to Toward Canada’s Climate Goals: The policy research agenda for getting to 2030 and beyond.
The white paper is essentially raising a series of questions in four, overlapping areas - the policy package, sustainable financing, inclusion of opportunity and ensuring success. Answers to these questions will provide governments, businesses and citizens information critical to understanding the impact of a shift to a low carbon economy.
For example in the policy section, the white paper asks about the role for complementary policies and the implicit carbon price from regulations.
“What complementary policies and investments are needed in addition to carbon pricing and existing climate mitigation/adaption measures? What cannot be done best by carbon pricing? How can we better explain/understand the role of the implicit pricing imposed by regulations and other non-price measures?” asks the paper.
It also delves into the notion of clean innovation, raising the question of its impact on climate change mitigation.
“How do/can clean technology and clean innovation investments reduce the future cost of mitigation? More broadly, what are the clean innovation/clean tech and mitigation interactions? How can we better model the impacts of clean technology?” asks Towards Canada’s Climate Goals. “What are the non-financial barriers to the take up of clean innovation and clean technology? What is the right policy package for clean innovation?”
When it comes to sustainable financing, the white paper highlights various options such as green bonds, yeildcos and coops. It wonders though how “green financing” could become part of mainstream financing.
“What is needed to show the investment and banking community that there are positive returns in sustainable investments? How can the financial community be engaged as stakeholders in and enablers of the transition to the LCE?”
Public companies also need to do their part because they will at some point attempt to raise money through share offerings. Shouldn’t they have a responsibility to report climate risks to shareholders? asks the white paper.
“How can the use of corporate reporting and governance rules/practices support low carbon goals? What should corporate regulators do to encourage more reporting of environmental risks? What is the role of other business transparency measures, such as supply chain transparency initiatives, and how can they be used more broadly?”
A successful transition to a low carbon economy will be determined by ongoing actions to ensure we get there. This means that measures and monitoring mechanisms needed to be in place to keep the transition on track.
“What data are needed in order to track progress? What data should be collected now in order to facilitate retrospective analysis of program and policy performance? Do we have all the tools needed to measure costs and benefits appropriately?” asks Towards Canada’s Climate Goals.
As well, how will the various decision makers know if their policies are working, where do they get their information?
“What are the feedback loops that are emerging that send information from decision-makers (municipalities, SMEs, large corporations, provincial and federal government, Indigenous communities and citizens) back to policy-makers?”
These are but a small number of the very important questions raised by Smart Prosperity that will need to be answered over the coming years. They do indicate though that work on addressing these major questions needs to start now so the transition to a low-carbon economy can be as painless as possible.