It will be interesting to see just how quickly the promises and priorities uttered on the campaign trail this fall will be swept aside by reality when Canada’s next federal government is formed after Oct. 21. That reality will be something fewer and fewer people are denying: climate change.
Central bankers and financial regulators have been cautiously broaching this subject for the past six months. But an American financial regulator said something in mid-June that would have been unthinkable a couple of months earlier.
Rostin Behnam, a Trump appointee with the U.S. Commodities Futures Trading Commission, told the New York Times that the financial risks from climate change are comparable to those posed by the subprime mortgage crisis that caused the 2008 global financial meltdown.
“If climate change causes more volatile, frequent and extreme weather events,” Behnam said, “you’re going to have a scenario where these large providers of financial products – mortgages, home insurance, pensions – cannot shift risk away from their portfolios. It’s abundantly clear that climate change poses financial risk to the stability of the financial system.”
If the Liberals think they are heading into the election with the climate change issue covered with their fixed carbon price and Justin Trudeau’s virtue-signalling, they should probably think again.
If Behnam is even close to being right, central bankers and regulators will be pushing for stress tests, reserves and new disclosure rules to shore up the financial system against climate catastrophe.
Climate change is already considered an economic threat in South America. Why shouldn’t it be in North America and elsewhere?
Thanks to Conservatives’ reluctance to even talk about climate change, let alone propose something tangible, the Liberals are likely to look like the climate solution party during the election campaign, then be in danger of looking woefully unprepared if they form the next government.
Carbon pricing has been sold to the Canadian public as a way to provide incentive to the private sector to continually reduce emissions in order to stay competitive. Canadians have felt insulated from pain. The Liberals have made any costs of carbon pricing revenue-neutral with rebates. Yet, five provinces – Ontario, Manitoba, Saskatchewan, Alberta and New Brunswick – oppose carbon pricing.
Shielding people from climate change may not be as easy after the election for the Liberals.
As for the Conservatives, party leader Andrew Scheer would probably like a redo on that fill-in-the-blanks policy on climate change he issued in mid-June. Conservatives don’t think they are likely to impress voters on environmental issues, so why bother?
If the Conservatives form the next government, they will have to learn to manage this issue early in their mandate.
The climate debate has been around since the 1970s, when it was known as “inadvertent climate modification” among scientists. Not surprisingly, it wasn’t much of a topical issue.
As more people talked about the issue, its name started morphing away from propeller-head language to “greenhouse effect,” then “global warming,” then the present moniker of climate change.
With the spate of catastrophic natural events happening worldwide, descriptions such as “carbon crisis” or “climate crisis” have been cropping up lately in the media.
A few months ago, most Canadians regarded climate change as something important, but they weren’t willing to pay for its solution or be inconvenienced – much the same way they felt about state security before Sept. 11, 2001.
As the climate issue becomes more tangible in most people’s minds, opposition to carbon pricing is likely to continue to diminish. Provincial opposition seems to be losing steam after Ontario and Saskatchewan lost attempts in court to have carbon pricing declared unconstitutional. This is probably why Scheer stopped talking about the carbon tax, even though he labelled it a “job killer” a few months ago.
Most polls show Canadians already think climate change is their No. 1 priority two months before the election.
To expect a federal budget devoted to climate change in 2020 may be unrealistic. But we can probably expect one before the 2023 election.
Quebec to drop withdrawal limit for LIFs in 2025
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