Canada is not ready for the green shift in the global economy, according to the Canadian Institute for Climate Choices. Actions for the adaptation of businesses and vulnerable communities must be taken now, to avoid the risk of paying the heavy price of inaction, argue the authors of a new report.
The transition to a low-carbon economy, essential to avoid the worst impacts of climate change, is underway and Canada must adapt, according to the report titled Transforming the Canadian Economy for a Low-Carbon World: Pass or Break.
A year ago, Canada made a commitment to become carbon neutral by 2050 – and like it, “more than 60 countries have made a commitment to achieve carbon neutrality by mid-century,” says Renaud Gignac, partner of principal research at the Canadian Institute for Climate Choices. These are 60 countries which represent nearly 70% of world GDP and 70% of world oil demand. It is major. According to him, “the efforts deployed will fundamentally transform the markets”, which is why the Canadian economy must transform quickly in order not to be penalized. However, at present, it is not prepared, according to simulation analyzes carried out by the Institute.
Efforts to be made, quickly
According to the report, a significant portion of Canadian businesses – particularly in the oil and gas sectors or the automotive industry – are still not ready for the transition, as they will face changing global markets.
“Considering that approximately 70% of Canada’s exports and approximately 60% of its foreign direct investments are associated with vulnerable sectors, it is essential to improve Canada’s level of preparedness”, pleads Mr. Gignac.
Among other things, it is not enough to work to reduce greenhouse gas emissions from different areas of the economy, defend the authors of the report. Certain sectors, whose demand is set to increase over the next few years, must be encouraged in order to ensure their competitiveness, while others, whose demand is set to decline – such as the oil industry – must be transformed. by moving towards new branches of activity, while retraining of workers is required.
Workers at risk
While Alberta tops the list in terms of the share of the workforce working in sectors vulnerable to transition (9.1%), no province or territory is spared. In Quebec, for example, nearly 4% of the workforce is vulnerable. In Ontario, the rate is 5%.
“There are over 800,000 workers in sectors vulnerable to transition in Canada. In Quebec, there are approximately 150,000 workers, ”notes Renaud Gignac, adding that it is often the least educated populations and those who experience discrimination who are likely to be the most affected.
In some municipalities where land income and jobs are heavily dependent on vulnerable sectors, there are risks to the sustainability of funding for public services, adds the researcher. “There is a real need to develop local transition plans and to diversify these economies,” he defends.
Market transparency
Regarding the transparency of companies on their environmental record, there too remains to be done to allow investors to differentiate between companies that make real efforts and others, says one in the report.
“There are all kinds of risks that must be disclosed on a mandatory basis by listed companies. But in terms of climate change, the standards are still insufficient, ”underlines Mr. Gignac. If foreign states adopt better information disclosure measures, Canadian companies may be less successful in facing their competitors, explains the researcher.
If the economy is to pass the test of transition, concrete and immediate actions must be taken, he reiterates. “It will cost more not to act than to act now,” he concludes.