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Financing the climate gap

Ottawa needs to leverage the capacity of the private sector to invest in climate solutions

You would be forgiven for thinking that the COVID-19 pandemic reduced Canadians’ appetite for climate action. But it didn’t. Canada, the United States and Europe have embraced ambitious new pathways for reducing greenhouse gas (GHG) emissions linked to building back better from the pandemic. To navigate them successfully, Ottawa needs to leverage the capacity of the private sector to invest in climate solutions.

The Institute of Sustainable Finance (ISF) at Queen’s University estimates that Canada needs an annual investment of at least $12.8 billion over the next 10 years to meet our commitment to reducing carbon emissions under the Paris Agreement on climate change. While that may sound like a lot, it represents only 0.6% of Canada’s GDP in 2018 and less than 10% of annual capital expenditures of firms listed on the Toronto Stock Exchange.

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