Bolder, faster, together asks the question: how can we all take responsibility for the past, navigate a turbulent present, and cooperate to protect future generations? Follow this series, coordinated by the Transition Innovation Group at Community Foundations of Canadaexplores the profound societal transformation already underway and accelerating in Canada and around the world.
There’s an old joke that anyone who believes it’s possible to have infinite growth in a finite environment is either a lunatic or an economist. This is no joke – this crazy but pervasive economic belief has had us extracting, exploiting, producing, consuming, wasting and polluting for so long that it has driven us to the precipice of environmental and socio-economic disaster.
Can our assumptions about economic growth and our attachment to the systems that drive it be adapted, and if necessary, dismantled and replaced to prevent our multiple crises from worsening? What does it mean to create a “transition economy”?
In the first part of this two-part article, we’ll focus on the big things that need to happen – that are actually starting to happen – to create a sustainable financial system, decoupled from the fossil fuel economy.
And let me state at the outset that I am not an economist — my direct experience in this field includes co-founding a community business in Vancouver (Alma Street Café), working on new value chains in food products of animal origin with BC SPCA Humane Standards and Labeling Initiativeand overseeing the development of a impact investment portfolio and related innovations at the McConnell Foundation.
In 2006, the United Nations established the Principles of responsible investment organization, the world’s leading advocate of environmental, social and governance (ESG) principles in finance, with more than 3,500 signatories. As a voluntary framework, it supports benchmarking, goal setting and learning, but it does not impose anything.
The 2015 Climate-Related Disclosures Working Group explains how climate risk should be an integral part of financial reporting and economic planning. Companies and countries are beginning to implement its recommendations, but not yet at a pace compatible with the Paris Agreement targets.
The Glasgow Financial Alliance for Net Zero led by Mark Carney (GFANZ) announced last November at COP 26 has been signed by more than 450 financial institutions, but as This article in the FinancialTimes asserts, signatories must act decisively to avoid accusations of greenwashing. Public pressure and regulatory mandates will help ensure that banks, corporations, pension funds and other institutional investors decarbonize their Scope 1, 2, and 3 Emissions by 2050. The new International Sustainability Standards Council also promises to bring more rigor and transparency to the field.
The measures needed are far-reaching and complex to implement, but a direction has been set and momentum is building.
But is it fast enough? In a paper being reviewed by a leading scientific journal and shared with me personally, climate researcher Corey Lesk and his co-authors analyze emissions scenarios for the coming transition, examining both mitigation (prevention) and adaptation to climate-related changes already underway.
Opinion: Can our assumptions about economic growth and our attachment to the systems that drive it be adapted or dismantled and replaced to help save the planet? Stephen Huddart asks. #transformation #NetZero #JustTransition #ClimateJustice
Specifically, they estimate emissions from decarbonizing energy systems, building coastal protection structures including seawalls and wetlands, moving communities away from rising seas, and funding increased cooling. spaces.
The document concludes: “Emissions embedded in the transition are […] highly sensitive to the pace of decarbonization and therefore low climate ambition has a high transition emissions cost. One could also add a high financial cost. In other words, the faster the transition, the safer and cheaper it will be.
Decarbonizing the global energy system is essential, but it doesn’t stop there. This extends to all things that require affordable and readily available energy, such as power generation, transportation, agriculture, construction, and manufacturing.
Whole industries are now starting to decarbonize. In Canada, the non-profit organization Transition Accelerator (full disclosure: I’m a board member) catalyzes the development of a hydrogen hub in Alberta, creating new supply chains in the zero-emission vehicle industry, and working on a Canada-wide power grid. Companies’ commitments to the transition range from The objective of the Canadian Steel Producers Association achieve net zero emissions by 2050, for Maple Leaf Foods claim have already done so.
What’s missing, critics say, is a plan to bring fossil fuels production stopped. As Tzeporah Berman says in a TED conference“For decades, our countries have been negotiating [emissions] targets. But behind our backs, the fossil fuel industry has ramped up production and blocked new emissions.
According to most recent report Canada’s Environmental Commissioner, Canada’s emissions have increased since the signing of the Paris Agreement in 2015, making us the worst performing country of all G7 countries.
In books like Mission Economy: A Moonshot Guide to Changing Capitalism, the London economist Mariana Mazzucato calls for restructuring the economy in the service of societal “missions” where all sectors collaborate on objectives that no one can achieve alone. In November, the G7 Economic Resilience Panel, of which she was a member, released its remarkable final report — now called the Cornwall Consensus. It is said:
“A mission-driven approach to innovation and investment means focusing less on sectors and more on issues (such as those inspired by the United Nations Sustainable Development Goals) that require all sectors to work together. This could catalyze new partnerships focused on societal goals, such as climate change adaptation, climate-neutral and smart cities, and healthy oceans.
The Institute for Sustainable Finance Change speed report reviews the progress made in implementing the historic recommendations of the Expert Group on Sustainable Finance. Mapping and supporting Canada’s zero-carbon commitment with a capital investment plan has progressed, but more needs to be done to connect Canadians’ personal savings, pensions and investments to climate goals.
The report also asserts that sustainable finance should not be limited to climate. The growing gaps in people’s access to affordable housing, nutritious food and a good life make it clear that to avoid climate chaos and avoid social conflicts, the foundations of our economy must change to allow this Mark Carney Terms “the trinity of distributive justiceequality of opportunity and equity between generations.
Navigating safely in these turbulent times requires a transitional economy socially conscious around three themes:
- Adjustment: Fair treatment for workers, including retraining and, if necessary, relocation assistance; incentives for companies to reduce their emissions; and supporting communities whose economies are no longer viable.
- Inclusion: Ongoing commitment to reconciliation and Indigenous economic inclusion for groups seeking equity and sovereignty through access to credit, equitable procurement, and corrective hiring policies. As this paper submitted by Community Foundations of Canada as part of the National Infrastructure Assessment, investments in social, physical and digital infrastructure should be considered together.
- Innovation: Large-scale social modernization and innovation at the community and broader systems level.
In Part 2, we will explore the social context of transition financing as a source of capital, values-based innovation, and civic engagement.