Is climate action a $26-trillion opportunity? ‘A little baloney’ in minister’s claim

The Canadian Press examines a claim the federal environment minister made to BNN earlier this month

Federal Environment Minister Jonathan Wilkinson announces funding for climate action at the University of Calgary in Calgary, Alta., Tuesday, Dec. 17, 2019. THE CANADIAN PRESS/Jeff McIntosh

“This is not simply an environmental issue. It is an economic issue. The estimates going forward in terms of the size of the prize for countries that are in this game early, developing technologies and deploying technologies that address some of the carbon-related issues, is enormous. It’s been estimated at a $26-trillion opportunity.”

— Environment Minister Jonathan Wilkinson, BNN Bloomberg, Jan. 7, 2020

The Liberal government’s climate strategy is all about finding a balance between the environment and the economy, which involves convincing people that curbing greenhouse-gas emissions in an effort to slow global warming brings a net economic benefit.

Catherine McKenna, the previous environment minister, was fond of throwing out massive numbers to show what fighting climate change could mean for the economy. Ahead of a 2016 trade mission to China, she talked about a $23-trillion opportunity. By 2018, that number had jumped to $30 trillion.

Wilkinson, who became environment minister after the fall election, is also using that talking about, although he pegs it at $26 trillion.

No matter how many trillions of dollars they mention, it is a lot of money — 15 times Canada’s current gross domestic product.

But is Wilkinson’s claim true? Let’s start with where it comes from.

Environment Canada says the figures are largely drawn from a 2016 report from the World Bank’s International Financial Corporation and a 2018 report from The Global Commission on the Economy and Climate.

Both cite U.S. dollars in their findings. That’s important, because US$26 trillion is more than $34 trillion on this side of the border.

The figures were also referring to economic benefits over more than a decade, not annually.

The World Bank projected that with the government policies created in response to the Paris climate agreement, the world would see an estimated US$23 trillion in investment opportunities between 2016 and 2030. That included renewable energy, transportation and waste systems in emerging economies such as China, Russia and India.

Helen Mountford, who is the program director of the global commission that produced the report, said the US$26-trillion figure was based on economic models that compared what economic growth would look like between 2018 and 2030 in two scenarios: not doing anything different to grow a clean economy, and doing what is needed to meet the commitments made in Paris.

The 2015 Paris accord aims to cut emissions enough to keep global warming to as close as possible to 1.5 C above pre-industrial times.

“The current path we’re on, the business as usual sort of economic-growth path is going to be $26 trillion less than taking a smart, climate action pathway,” said Mountford, also vice-president for climate and economics at the World Resources Institute. “It’s an economic opportunity we can seize if we put in place ambitious climate policies in a smart way and do it now.”

The figures are also cited in a global context. There is not a $26-trillion opportunity for Canada alone.

Wilkinson does reflect this when he says the opportunities are there for “countries.”

Celine Bak, president of Analytica Advisors and an expert on the business impacts of climate change, said it’s very difficult to assess what Canada’s share of the $26 trillion could be because as far as she knows, there isn’t anyone in Canada working on a model to figure that out.

“I think it’s an accurate statement globally,” she said. “I think it’s to be determined what part of that will be an opportunity for Canada.”

Mountford says the $26-trillion estimate is likely to be an understatement, because it’s hard to assess how quickly the world is going to decarbonize.

Estimates will depend heavily on how quickly governments adopt more stringent climate policies, but also on how business responds.

There are some signs of momentum, and not just on the government side.

A number of major investors and businesses are moving swiftly on climate goals.

In the U.S., investments in sustainable funds quadrupled from 2018 to 2019. The world’s biggest money manager, BlackRock, announced earlier this month that climate change is going to become a key part of investment decisions. It said it will be pulling its money out of coal production entirely.

READ MORE: B.C. and Alberta Indigenous leaders protest major Teck oilsands project

Last week, Microsoft announced it is shifting to renewable energy entirely by 2025 and will be “carbon negative” by 2030.

That means taking one big step further than achieving net-zero emissions, because it would involve the company taking more carbon out of the atmosphere than it emits.

There are lots of companies preparing to jump on board the trend in Canada, too.

Mike Crawley, CEO of Ontario-based Northland Power, said Europe’s recently announced goal to be carbon neutral by 2050 is a big opportunity for his company, which specializes in building offshore wind power. That energy source will play a major role in Europe’s climate plan, where coal remains a significant source of electricity.

Wilkinson is not pulling a number out of the sky when he says there are estimates that action on climate change is a $26-trillion economic opportunity, but there are many other details important to understanding the number.

For those reasons, his claim earns a rating of “a little baloney” — the statement is mostly accurate but more information is required.

The Canadian Press

Like us on Facebook and follow us on Twitter

Global climate action

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Central zone down to 16 active COVID-19 cases

Alberta Health Services’ central zone is down to 16

Millet Agriplex to become a hub for indoor soccer

Wetaskiwin Soccer Club will be operating out of the Millet Agriplex this season.

Ermineskin Kindergarten has a confirmed case of COVID-19

The school has shut down and Cohort 2 is in self-isolation

Central zone down to 19 active COVID-19 cases on Thursday

Provincially, 158 new COVID-19 cases were identified

Wetaskiwin/ Camrose RCMP conduct a joint forces initiative with Camrose Police Service

The multifaceted joint forces initiative with on Sept. 23, 2020 proved very successful.

Alberta’s top health official says province is not in a second wave of COVID-19

Dr. Deena Hinshaw said Thursday that Alberta had identified 158 new cases in the province

First annual Best of Wetaskiwin Readers’ Choice Awards

Enter to win a $200 gift card for Canadian Tire.

8 charged, $260K in drugs and cash seized in massive Alberta drug bust

Eight people are facing 33 charges in what police have dubbed Project Incumbent

‘We’re losing what makes the Parkland so distinctive,” conservation specialist says

The Lacombe district will lose two sites with provincial park status: JJ Collett and the Narrows

Sylvan Lake woman says Town’s response time to concerns isn’t enough

Glenda Jackman says it took almost a month for the Town to act on her complaint about a playground

Hundreds die from opioid overdoses in Alberta as COVID-19 pandemic hit

Jason Luan said the province is not alone in seeing a rise in deaths,

Alberta politicians reject throne speech

Premier Kenney disapointed with lack of support for Alberta energy

Most Read