Ideas

November 3, 2020

Episode #024: The Cost of Canada’s Low-Carbon Economy

Canada has some ambitious climate goals and achieving those goals will require significant capital investment. But just how much will the transition to a low carbon economy cost? According to a recent report released by the Institute for Sustainable Finance, Capital Mobilization Plan for a Canadian Low Carbon Economy, it won’t be as much as we think. It is estimated that we will need to invest approximately $90-166 billion over the next 10 years for Canada to achieve its climate goals.

In this episode, co-author of the report and Associate Professor of Finance at the Smith School of Business, Ryan Riordan, takes us through the key findings of the report, from which sectors of our economy offer easy (and affordable) wins and the role our energy sector has in the transition to what is standing in Canada’s way and the necessary ingredients to enable the right policy environment to realize these investments.

In This Episode:

  • Why the $128 billion required investment is doable for Canada
  • Challenges to deploying this investment and why we need enabling capacity and infrastructure before allocating capital
  • Why natural resources are a big bet we need to get right
  • Allocating investments to sectors to achieve climate goals
  • Implications of this required investment for Alberta
  • Opportunities for a pan-provincial/national strategy
  • Cost of capital and the challenges and opportunities in accessing the necessary capital
  • Sources of financing—public and private
  • The importance of an enabling and stable policy environment to create certainty for firms to invest in long-term, emissions-reducing projects

Resources Mentioned:

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How much will Canada’s transition to a low-carbon future cost? @SmithQueensMBA Associate Professor of Finance @algoriordan joins @awlegge on AlbertaBETTER to unpack this question and explore where capital should be allocated. Listen: Share this episdoe

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