Elizabeth May – OPINION: Canada needs to up its game on climate finance

Canada needs to up its game on climate finance

Measures for greater transparency and development of a new taxonomy for climate finance made up a small and unambitious section of the Fall Economic Statement.


DUBAI, UNITED ARAB EMIRATES—Here at COP28, one of the hot topics is climate finance.

The innovations under discussion remind me of the kind of globally re-organizational changes at the 1944 Bretton Woods conference than of the changes inked at Conferences of the Parties (COPs).

In our Parliament, the most forward-looking work on climate finance is ISG Senator Rosa Galvez’s Bill S-243, the Climate-Aligned Finance Act. Bill S-243 is the gold standard for the rules and regulations one would want to align actions of banks, insurance companies, pension plans, and other financial institutions with climate goals. One would wish the government to not only adopt and support S-243, but also to reintroduce it as government legislation in the House, and advance it to royal assent.

We are seeing snail’s-pace progress in Canada with such things as the adoption of Guideline B-15 on Climate Risk Management by the Office of the Superintendent of Financial Institutions. Measures for greater transparency and development of a new taxonomy for climate finance made up a small and unambitious section of the fall economic statement.

Meanwhile, “climate finance” at COPs tend to be one-off announcements of financial commitments to the various funds opened in connection to the United Nations Framework Convention on Climate Change. We already have an “Adaptation Fund,” and Global Environmental Facility, the Global Climate Fund, and the dwindling funds of the Kyoto’s now-mothballed Clean Development Mechanism. At COP27 last year, the long-debated Fund for Loss and Damage was finally put in place. COP28 opened with funding pledges to start implementation of the Loss and Damage Fund with real dollars. But even with $100-million from the United Arab Emirates, $100-million from the United States, and a similar amount from the European Union, the amount in the fund hovers at around $400-million. As one World Bank representative put it in a gathering of parliamentarians: two major storms will wipe out all the commitments made at COP28.

Other big amounts that move the needle on financing were announced at COP28. ALTÉRRA, a US$30-billion catalytic climate vehicle, has been trumpeted as promoting international efforts to create a fairer climate finance system with an emphasis on improving access to funding for the Global South. This program has Mark Carney’s fingerprints all over it. Carney has been designated the UN special envoy for Climate Action and Finance, and co-chair for the Glasgow Financial Alliance for Net Zero. ALTÉRRA will aim to mobilize US$250-billion globally by 2030, steering private markets towards climate investments with a focus on transforming emerging markets and developing economies.

Also announced here in Dubai is a collaboration involving the UAE government with members forming a who’s who of global capital: ADQ, Blackrock, HSBC, Masdar, Ninety One, and the World Bank Group. Abu Dhabi will host the Global Climate Finance Centre (GCFC) to accelerate the development of climate finance frameworks and skills, and champion best practices both in the UAE and globally. The GCFC aims to address key barriers linked to financial frameworks that hinder investment flows, to help make climate finance available, affordable, and accessible as a COP28 legacy for action.

But even these new institutions are not close to the kind of reshaping of global financial flows advocated by a growing list of countries. Barbados’ Prime Minister Mia Mottley, herself a graduate from the London School of Economics, backed by no less than Lord Nicholas Stern, former World Bank chief economist, is calling for systems of global governance over new revenue flows. A small levy on travel, a carbon price on global shipping, and the transaction tax known as the Tobin tax could provide the sustainable funding at scale that will be required, both in addressing economic losses due to climate events and funding the rapid and massive investment needed for the shift to renewable energy. At COP28, the call for reforming the multilateral development banks such that they be fit for purpose in a polycrises world is frequently heard.

All of this suggests we urgently need a new Bretton Woods to put in place rules and institutions to ensure human society can navigate and survive the coming storms.

Elizabeth May is the Green leader and MP for Saanich-Gulf Islands, B.C.

Read the article on The Hill Times website here: Canada needs to up its game on climate finance – The Hill Times