CLIMATE CHANGE SOLUTIONS:Oct 26 2019

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What a Liberal minority government means for Canada’s environment

New findings: Hidden costs to sea level rise; promoting women increases profits; and analysts’ negative impact

Electric revolution: As EV demand increases, can utilities and cities keep up?

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What a Liberal minority government means for Canada’s environment

From the carbon tax to fossil fuel subsidies, here are eight things we can expect from a minority government

Well, well, well, the dust has settled (kind of) and Canada has a Liberal minority government.

Wait, what exactly is a minority government?

Here’s how it works: there are 338 seats in Canada’s House of Commons. To govern unilaterally, a party needs to win 170 seats. That’s what we Canucks call a majority government.

If no party wins more than 170 seats, you have what we call a minority government. That means the party that forms government will need the support of other parties to pass any legislation. It also means they can face a non-confidence vote at any moment, so they better keep themselves in the good graces of some allies.

Who those allies will be is the big, unanswered question at this hour.

What we know is this: the Liberals need 13 extra seats to stay in power. As of Tuesday morning, the Conservatives won 121 seats, the NDP won 24 seats, the Bloc Quebecois won 32 seats and the Greens won three seats.

The Liberals could work with either the NDP or the Bloc Quebecois (or some combination thereof) and remain in power.

Both the NDP and the Bloc have strong environmental platforms — arguably stronger than the Liberals — so if anything the Liberals can be expected to take a stronger stance on environmental issues.

There’s much we don’t know, but here are a few things we can reasonably expect to happen on the environment file.

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New findings: Hidden costs to sea level rise; promoting women increases profits; and analysts’ negative impact

Sea Level Rise Has Hidden Costs for Business

If your business is near the ocean, you’re probably already thinking about ways to adapt to sea level rise. Here’s another concern: municipalities exposed to climate risk pay more for bonds to finance new infrastructure.

“If towns or counties find it too expensive to build a road or parking garage, they may halt projects,” said researcher Marcus Painter. “Businesses can find their supply chain or even employee access interrupted.”


Promoting Women Increases Profits in Emerging Economies

A 10 per cent increase in the percentage of senior women managers is associated with a 1 – 1.5 per cent increase in Return on Assets, according to a new study of firms in South Korea.

“There’s a large productivity effect from the hiring and promotion of female managers,” explained researchers Jordan Siegel, Lynn Pyun, and B.Y. Cheon. Women increase productivity because they manage in a more consultative way than men and also generate more fresh ideas. 

Yet, women are often excluded from management in developing – and developed – countries. In South Korea, the vast majority of domestic companies do not have a single female manager. Firms that hire women gain a real competitive advantage.


Analysts Are Bad for Corporate Social Performance

We all know it: Markets drive short-term thinking. Financial analysts are an important player in this dynamic. Research shows that firm corporate social performance (CSP) significantly improves when analyst coverage decreases.

Researchers Cuili Qian, Louise Lu, and Yangxin Yu studied the effect of brokerage mergers and closers that reduced firm coverage by analysts. In a study of U.S. publicly listed firms during 2001-2013, they found that less coverage led to higher firm CSP over the next two years.

When analysts set quarterly earning goals for firms, managers may feel “that socially responsible investments with a long-term horizon cannot contribute to hitting short-term performance targets,” the researchers write.

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Rethinking the renewable strategy for an age of global competition

Renewable-based power generation is rising. As the market evolves, what will it take to succeed, and what kinds of players will win?

Over the past decade, renewables have developed from niche technology to global industry. With environmental concerns rising to the top of global and regional agendas, the debate has shifted from “When will renewables take off?” to “How much faster will they grow?” As the cost of renewables continues to fall sharply and their growth rates soar, a virtuous cycle is set in motion. The need for clean power in emerging economies only adds to the momentum.

Earlier concerns about intermittency and grid stability are fading as countries increase their share of electricity generated from renewable sources and as battery costs plummet. In Germany, for instance, renewables represented 38 percent of gross electricity consumption in 2018, up from 25 percent in 2013. At the same time, battery costs decreased from $650 per kilowatt-hour (kWh) in 2013 to $176 per kWh in 2018.1 According to McKinsey’s latest Global Energy Perspective Reference Case, renewable-based power generation will represent more than half of the global total by 2035

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