ENERGY TRANSITION & CLIMATE CHANGE SOLUTIONS: Jan 9, 2021

QUOTABLES:

The energy transition is a pathway toward transformation of the global energy sector from fossil-based to zero-carbon by the second half of this century. At its heart is the need to reduce energy-related CO2 emissions to limit climate change

The International Renewable Energy Agency (IRENA)
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Canadian Headlines:

Canadian banks start doing the math on climate change risks

Bank of Canada working with financial sector to get a grip on how climate change scenarios will affect their bottom line

 At long last, Canada may have reached the point where climate change is no longer a political issue, but rather a clear problem that needs to be solved.

As evidence, take Tiff Macklem. Appointed last June as the 10th governor of the Bank of Canada, his job is to ensure the stability of Canada’s financial system. With the bank’s tradition of political independence, and most of his seven-year term still to come, Macklem can afford to confront the climate threat head-on. 

In a November speech, Macklem declared that “climate change and the transition to low-carbon growth will have profound impacts on virtually every sector of the economy … so we need to understand the implications of climate change for economic growth and inflation.”

Politicians can trade barbs about climate issues, but financial institutions, as stewards of other people’s money, work hard to mitigate financial risks. “Transition risks are often mispriced, and physical risks are generally underappreciated,” Macklem noted. By filling in that knowledge gap, we could save billions in damage and eliminate an existential threat to Canada’s financial stability. 

The 2008 financial crisis pushed climate issues into the background. But the current pandemic, says Macklem, has “focused the public’s attention on extreme global risks and the value of resilience.” A key indicator is the flow of money into ESG funds – portfolios of equities or bonds that prize environmental, social and governance goals equally with profit. According to Macklem, ESG funds in 2020 raised twice as much money as in 2019, which itself tripled the 2018 amount. Canadian ESG issuance has also jumped, Macklem noted, from less than $2 billion in 2017 to almost $13 billion by mid-November.

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World News

The climate crisis led to record insurance payouts in 2020

COVID continues to cause severe economic distress, but natural disasters fueled by a warming planet also took their toll this year, causing record damage and displacing millions according to two new assessments of insurance claims in 2020.

Christian Aid, the relief arm of 41 churches in the U.K. and Ireland, ranked the 15 most destructive climate disasters of the year based on insurance losses. Cyclone Amphan, which hit the Bay of Bengal in May, was the most expensive single event, displacing 4.9 million people and costing $13 billion. Each of the top 10 caused at least $1.5 billion in damages, and five cost $5 billion or more. 

Because the price tag to insurers was higher in rich countries, Christian Aid noted, its report likely undercounts devastation to poorer countries. “South Sudan, for example, experienced one of its worst floods on record, which killed 138 people and destroyed the year’s crops,” the report said.

With its relatively high property values, the U.S. topped the list of countries financially impacted by climate change, incurring $60 billion in damages. Much of that was caused by an unusually heavy Atlantic hurricane season. Altogether, the 30 named storms caused at least $41 billion in damages and displaced an estimated 200,000 people across the U.S., as well as Central America and the Caribbean.

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NEWS AND VIEWS FROM AROUND THE WEB ON ENERGY EFFICIENCY & TRANSITION

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