'Money talks': Federal environment minister calls on businesses, banks to fight climate change

Environment Minister Steven Guilbeault says businesses and financial institutions around the world need to do more to fight climate change and climate financeneeds to be on the agenda for the next United Nations climate summit.

Guilbeault spoke about the need to mobilize private international climate capitalon Wednesday in Brussels, wherehe announced that Ottawa is allocating $450 million to the world's largest climate fund the Green Climate Fundincreasing its previous pledge in 2019 by 50 per cent.

Ottawa's most recent contribution consists of $180 millionin loans and $270 millionin grants.

"We need more money, and we need more money from all sources," said Guilbeault.

It's widely acknowledged that richer countries and international businesses based there have been responsible for the bulk of global carbonemissions.

The $450 million for the Green Climate Fund comes from the $5.3 billion the federal government has earmarked forinternational climate finance over five years.

The Green Climate Fundsupports developing countries' efforts to transition to low-carbon, climate-resilient economies and protectnature.

"Money talks, so we encourage other contributors, traditional and new, to use this second replenishment of the Green Climate Fund to raise their ambition," Guilbeaultsaid.

He specifically called on the private sectorto step up.

"We clearly know that there's not enough public money to meet the challenge of fighting climate change or adapting to climate change, which is where the private sector capital mobilization comes into play," Guilbeault said.

The private sector must be "held accountable" for dragging its heels on climate action in Canada and globally, said Julie Segal, senior manager of climate finance at Environmental Defence, a Canadian-based environmental organization.

SegalsaidCanadian banks are still investing billions of dollars annually in "climate-damaging activities" like fossil fuel production.

"So they areunder-investing, particularly Canadian financial institutions, in climate solutions andover-investingin climate pollution," she said.

If the Canadian government got serious about encouragingprivate investments in efforts to fight climate change, Segal said, it would introduce rules and regulations for Canada's financial institutions to help shift Canadian money away from high-emitting sectors.

World Bank needs to do more: Guilbeault

GuilbeaultmeetsThursday with his ministerial counterparts from China and the European Union in Brussels forthe Ministerial Meeting on Climate Action (MoCA).

These talks are focusedon implementing the Paris Agreement. They're also meantto help wealthier countries iron out their concerns ahead of the UN's upcoming COP 28 climate conference in Dubai.

Guilbeault said one of the outcomes of November's COP28 should be a "firm commitment" to getting financialinstitutions like the World Bank and the International Monetary Fundtoaddress the existential threat of climate change while preventing millions from slipping into poverty.

In a recent joint op-edwith Australia's climate change and energy minister,Guilbeault wrote that the efforts of multilateral institutionsto financeclimate-related measures at affordable rates havebeen "patchy and at times inaccessible to the nations that need it most."

Patricia Fuller, who served as Canada'sambassador for climate change from 2018 to 2021, said discussions have been happening for years about boosting access toclimate finance fordeveloped countries.

"I think the new aspect here is just the levels of debt distressin developing countries, which unfortunately coincide to a great degree with the impacts of climate change," Fuller said.

The United Nations recently estimated that 52 developing countries home to half of the world's population living inextreme poverty suffer from severe debt problems. Almost half of these countries spend 20 per cent or more of their public revenue on servicingexternal public debt.

Fuller said the issue isn't whether multilateral institutions must step up their climate finance, but rather how they do it. The question that needs to be answered, she said, is whether these institutions increase their risk tolerance or receive capital increases from shareholders like Canada.