Climate crisis inaction isn’t worth the cost

In a social media post following her mid-August visit to Alberta, Deputy Prime Minister and Finance Minister Chrystia Freeland was pictured shaking hands with fellow Albertan, Premier Danielle Smith. In addition to representing two opposing political parties, these two leaders have also expressed starkly contrasting views on both the source and impact of global warming, as well as on how best to address it. As part of its stated objective of reaching net-zero emissions by 2050—itself a shockingly inadequate target date, if the rise in the global average temperature is to be kept below 1.5 C— the federal government has imposed a carbon tax on fuel consumption. Meanwhile, Smith has done her utmost to slow even this transition from fossil fuels to clean energy, most recently by applying a seven-month moratorium on new investments in wind and solar energy projects in Alberta. Though the public has not been made privy to all the two leaders said, one can only hope that the deputy prime minister effectively communicated to her provincial colleague that the threat posed by warming is real, and potentially catastrophic for Canada and for the planet as a whole. As a September report by the Globe Institute at the University of Copenhagen and the Potsdam Institute for Climate Impact Research lays out, of the nine planetary boundaries “that keep the Earth within the kind of living conditions that have prevailed over the last 10,000 years, the period during which humanity and modern civilization developed,” six boundaries have been exceeded (climate change, deforestation, bio-diversity loss, synthetic chemicals including plastics, freshwater depletion, and nitrogen use), with two more—ocean acidification and harmful dust particles in the air—now borderline. The only boundary whose limits we have remained within—thanks to the 1987 Montreal Protocol—is the amount of ozone within our atmosphere. Joseph Ingram is a fellow of the Canadian Global Affairs Institute, a former president of the North South Institute, and a former World Bank special representative to the United Nations and the World Trade Organization. Photograph courtesy of Joseph Ingram Hopefully Freeland drew Smith’s attention to the fact the concentration of carbon dioxide in the atmosphere is today in excess of 422 parts per million (PPM), with emissions currently growing at more than two per cent per annum. And with per capita subsidies to the fossil fuel sector amongst the highest on the planet, Canada is a major contributor. When one considers that, until the advent of the industrial revolution, CO2 was for the previous 10,000 years no more than 280 PPM, we need to acknowledge the critical urgency of reducing our emissions of all greenhouse gases, including CO2. Failing to do so will result in the global average temperature rising to between 2 C and 3 C above pre-industrial levels, creating unprecedented conditions for all life on the planet, and, as the report put it, “with no evidence whatsoever that humans can survive in that environment.” Pushback to government policy reforms needed to reverse this process of collective sabotage comes primarily from scientific illiterates, adherents of superstition, and fossil-fuel vested interests (whose scientists had already in the 1970s identified the disastrous consequences of continued GHG emissions while hiding the results from the public to ensure short-term financial gain). The common refrain from all of them—Smith and federal Conservative Leader Pierre Poilievre included—is that a rapid transition from fossil fuels and other destructive compounds will be too costly and disruptive to consumers, the economy, and to society as a whole. In response to this deeply flawed reasoning, Freeland needed to draw attention to the fact the increasing frequency and severity of climate-related events is creating unprecedented financial pressures on insurance and reinsurance companies, which, in many parts of the world (including Florida, California, and British Columbia), are increasingly unwilling to provide home, damage, or crop insurance. When one considers the historically high levels of global debt, and that about half of global financing (about $240-trillion) is channelled through largely unregulated non-bank financial institutions, the impact of warming on today’s financial architecture could indeed make the 2008 financial collapse look like child’s play. Climate-related disasters could lead to: 1) unprecedented claims on property and casualty insurance companies effectively wiping out their capital bases; 2) food shortages and supply chain collapse leading to astronomic levels of inflation; and 3) a formal banking sector with balance sheets saddled with insurance company liabilities and defaults. As ominously concluded in a recent Financial Times editorial, “the interplay of the climate crisis with financial fragility alone threatens potentially insurmountable dangers unless immediate action is taken.” It is these potential costs that Freeland and the Trudeau government need to communicate unequivocally to those who push back against transitioning quickly to a clean environment on grounds that it isn’t cost effective to do so. Hopefully, this is also what Freeland personally communicated to her fellow Albertan. Failure to have done so could make her and the federal government complicit in the dangerous delusion of climate change denial. Joseph Ingram is a fellow of the Canadian Global Affairs Institute, a former president of the North South Institute, and a former World Bank special representative to the United Nations and the World Trade Organization. The Hill Times