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Climate advisers use dying days to tell firms, government to pull up their socks

Ottawa’s advisers on environment and the economy may have lost all their funding, but they’re not about to retreat quietly.

The National Round Table on the Environment and the Economy was told in the federal budget that it had one year left to live.

But until its funding runs out, president David McLaughlin says he will continue to issue its reports as usual, detailing how climate change is affecting the economy, and what governments and business should do about it.

To that end, the advisory body issued a report this morning warning that most businesses are woefully unprepared for the inevitable effects of climate change that are creeping up on them.

Both business and governments need to rethink the way they manage the risks associated with climate change, McLaughlin says.

“We say climate change is a material risk,” he said in an interview.

Previous analysis done by the round table shows that climate change will drain $5 billion a year from the Canadian economy by 2020. The costs will climb steeply after that, chopping Canadian economy activity by between $21 billion and $43 billion a year by 2050, depending on how much action is taken to reduce greenhouse gases by then.

But neither Canadian business nor government has the plans in place to wrestle with the losses – even though climate will eventually touch every sector of the economy, the report says.

“Climate change doesn’t respect the quarterly financial reporting process. You’ve got a disconnect between the way businesses run and think about their business…and in terms of the climate,” McLaughlin said.

“The business cycle doesn’t match the climate cycle. What we’re saying is look, you’ve got to think differently a bit and look ahead and plan ahead.”

The round table talked with businesses across the country to figure out what companies were doing to manage the risks associated with the effects of climate change. The researchers also looked to learn from the few companies that do have solid plans, both in Canada and in other countries.

They suggest that companies review all their activities through a climate lens, to figure out where they are vulnerable.

They also urge securities regulators to step up their enforcement of disclosure guidelines, to make sure companies are spelling out climate change risks for investors.

Companies should also be taking a close look at their infrastructure, and anticipating future needs based on what climate change will do to the structures they rely on to market their products and services, the report says.

“Climate change is so pernicious in the way it affects business and the way it affects the economy….that businesses have to look right across their operations and see where climate change has an impact, and look and see what they can do about it.”

Government is not off the hook, the report stresses.

While the government produces some information that could be of value to businesses planning for the future, it needs to do a better job disseminating relevant information to companies, in frank language, the report says.

Governments also need to be more mindful of how critical infrastructure will be affected by climate change, and make this information available to firms.

Plus, governments need to anticipate climate-related market failures and be ready to step in when necessary, the report says.

In fact, the round table has been playing this role.

But Ottawa is in the midst of eliminating the advisory and research group, which specializes in assessing the environment’s effects on the economy and often acts as a bridge between companies and the government.

As part of the cost-cutting measures in the spring budget, the federal government chopped all $5 million of the panel’s annual budget, starting next year.

Officials for Environment Minister Peter Kent said the round table’s work was readily available elsewhere.

But that is not the case, says McLaughlin.

“This is new and original information that we’re putting out,” he said.

“Maybe the government in some cases” produces some of the analysis that the round table is working on. “But that work isn’t always public,” McLaughlin adds.

The occasional think tank has done some similar work, too, but not in a systematic way or with the sophisticated modeling that has led to the round table breaking ground on detailing the probable effects of climate change, he said.

Indeed, the federal government itself has asked the round table for two major pieces of research over the past year, McLaughlin points out.

One of them is set to be published in a month’s time, and promises to be poignant.

On the request of Kent, the panel has gone to every province and added up all the climate change mitigation efforts across the country. Its report will show how far the provinces and the federal government have come in meeting Ottawa’s greenhouse-gas emission targets for 2020.

The report promises to be controversial, since many environmentalists, experts and even the Office of the Auditor General believe Ottawa is not on track to meet those targets.

Read the “Facing he Elements: Building Business Resilience in a Changing Climate” reports online.

You might also be interested in: Provincial government needs to climate proof Ontario says Environmental Commissioner 

 

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