The Climate Barometer: High finance and the High Arctic

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May 24, 2021

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This past week was a big one for the Arctic -- and not just because it featured in the geopolitical realm, with the U.S. and Russia at odds over the latter's increasing military presence in the region.

As the foreign ministers of Arctic Council nations met in Iceland, study after study showed how significantly the Far North is changing and will continue to change as the planet warms.

The first warning came from Rafe Pomerance, an environmentalist and academic who told AFP that "the Arctic is in the process of disintegrating."

Pomerance is one author of a new study arguing that global emissions agreements -- the Paris Accord, for example -- fail to take into account the effects of thawing permafrost and zombie fires. Permafrost melts as temperatures rise, releasing higher amounts of methane into the atmosphere.

Pomerance and his team estimated that greenhouse gas emissions from the Arctic could be as much as 40 per cent higher than projected this century because of this phenomenon.

Of course, permafrost is not the only thing that is disappearing in the Arctic. Sea ice is, too -- and a new study claims some of that melting activity can be chalked up to the arrival of "heat bombs" from the Pacific Ocean. Researchers say the warmer Pacific water is able to endure years beneath the North Pole, during which time it helps accelerate ice melt.

Those two studies were only part of the picture when it came to distressing news about the Arctic last week. The Arctic Council reported that climate change is to blame for steep declines in the regional population of species including caribou and shorebirds.

Finally, in what may be the most significant finding of all, scientists say the line often repeated here about the Arctic warming twice as fast as the rest of the world is no longer accurate -- because it's now warming three times as fast as the rest of the world.

The Arctic Monitoring and Assessment Programme says that between 1971 and 2019, the Earth's average temperature rose by 1 C, while the Arctic's increased by 3.1 C. That increase appears to have accelerated over the past 15 years.

To find anything approaching good news for the Arctic last week, we had to look beyond the science and go back to geopolitics, where environment ministers from the G7 nations vowed to speed up their efforts to fight global warming. The specifics of their effort don't measure up to what the highly regarded International Energy Agency had called for just days earlier, but they do represent incremental progress toward the much larger actions many experts have said will be necessary.


Taking a look at stories about the environment that caught our attention this week
  • The COVID-19 pandemic is taking a toll on Canada's trees. High demand for home renovations has led to skyrocketing demand for lumber, driving up prices in turn. That's also the best explanation anyone has come up with for the increase in lumber thefts, which have been reported at construction sites across the country. Some thieves don't even care if the wood they nab has been cut and processed first: tree-poaching has become a more common crime in British Columbia.
  • For the second time in as many months, Health Canada has backed off on banning a neonicotinoid pesticide. In April it was clothianidin and thiamethoxam, with the agency saying they have not found any reason to believe the chemicals pose a problem for insects. Imidacloprid received the same treatment last week, as the regulator concluded that the risks posed by that substance are considered acceptable, as long as the pesticide is used within certain limits.
  • One of the consequences of climate change is an increase in extreme weather events, and we're heading into prime season for two such phenomena. We have our first named Atlantic storm of the year, even though hurricane season does not start until June 1, while wildfire watchers are warning that this year could be an exceptionally severe one in Western Canada, thanks to a dry start to the year.

An in-depth look at an important climate issue

Not an entity traditionally associated with climate change, the Bank of Canada has nonetheless found itself in the midst of that file.

Greenpeace urged Canada's central bank last week to do more to steer financing activity toward more climate-friendly investments, including by purchasing green bonds itself instead of only offering them, as the federal government has told it to do.

The environmental group says it also wants to see addressing climate change spelled out as one of the bank's key goals, when the opportunity for that to happen rolls around later this year.

While banking may seem on the surface to be an industry that has little to do with the climate change, its ability to set the framework in which the entire financial sector operates is increasingly being seen as a key lever to drive change. Earlier this month, the central bank of the Netherlands said that the financial system of that country will be at risk unless its next government does more to spur personal and private-sector investment into a greener economy.

There are many forms that could take. One example can be drawn from New Zealand, which recently became the first country in the world to require banks to report on the impact their investments have on climate change. The hope is that, when confronted by numbers showing how various investment portfolios affect the planet, investors will start to consider something other than expected short-term financial outcomes.

Something like that is probably a long way away from happening in Canada. Although some of our biggest banks have committed to achieving "net-zero financed emissions" by 2050, it's hard to see the path to reaching that milestone as long as the oil and gas sector remains a healthy target of investment activity.

International analyses have shown that the likes of RBC, TD Bank and Scotiabank are among the most prominent funders of fossil fuels in the world, and some critics have argued that the big banks' eagerness to invest in that industry is one of the reasons Canada is struggling to embrace a true climate transition.

Still, there are signs that is changing -- albeit slowly. Some financial institutions are working with the Bank of Canada on a pilot project to better assess the financial risks that come with climate change. The result of that effort is expected by the end of the year, meaning it will likely be 2022 at the earliest before we see any significant shift in investor activity.



CTV News Science and Technology Specialist Dan Riskin shares his exclusive insights

When it comes to cleaning up polluted environments, cost can be a major problem.

Take, for example, excessive algae.

In some bodies of water, an abundance of algae means fish die off and the water itself changes colour.

It has been estimated that it would cost nearly $20 million for all farms in Ohio that feed Lake Erie to reduce their nutrient pollution – the act that causes the algae population to take off – by 30 per cent.

The benefits of a cleaner lake, meanwhile, would only recoup about half that amount.

However, as CTV News Science and Technology Specialist Dan Riskin explains in this week's Riskin Report, there's something missing from that calculation – and it has major implications for protecting local waterways all over the world.


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