In the debate over Canada’s role in fighting climate change, two truths collide: we’re the world’s fourth biggest producer of oil yet account for less than 2 percent of global carbon emissions. This conundrum is often misconstrued to suggest nothing we do matters.
“Let’s face it,” concluded a typical column published by the Canadian Energy Centre, the Alberta government’s recently shuttered pro-oil think tank. “Canada is responsible for only 1.5 per cent of global GHG emissions. Shutting down the oil and gas industry, let alone the entire country, wouldn’t have much of a worldwide impact.” That perspective is ubiquitous among Conservatives, but it’s also broader: in 2020, Deputy Prime Minister Chrystia Freeland told the Financial Times, “Even if Canadians ceased emitting all carbon, we wouldn’t move the dial.”
That’s a grade-school approach to ethics (my daughter likes to argue that even if she cleans her room, the rest of the house will remain messy), but the underlying problem is real. It’s also universal: there are just six countries—China, the US, India, Russia, Brazil, and Indonesia—whose emissions surpass 2 percent of the global total. Everyone else is a bit player, including Canada. Think of it as the climate activist’s “Inconvenient Truth”: our greatest efforts at home—emissions caps, electric vehicle mandates, the carbon tax—can achieve only a tiny global impact. Moral imperative and strategic futility seem to cancel one another out.
But the existential threat remains. The ten warmest years in human history were all in the past decade, and 2024 is on track to be the hottest year yet. Calamitous impacts are mounting everywhere. In Canada, extreme weather caused almost $8 billion in insured losses this year, as of September, shattering the previous annual record ($6.2 billion in 2016) before summer was even over.
No country alone can reverse this. In that sense, the “let’s face it” crowd has a point. If only they stopped using it as an excuse to do nothing and followed the thought through instead. Climate-concerned Canadians should absolutely look past our borders. Focus on the developing world. If you’re genuinely wondering how best to fight climate change, that’s where the answer lies.
The biggest source of greenhouse gas emissions is now the Global South, with China and India leading the pack at 30 and 8 percent of global emissions respectively. Not because they’re fossil fuel hogs—that’s countries like ours—but because their huge populations outweigh their tiny per capita carbon footprints. Even excluding China (which is now leading the world’s decarbonization efforts, building the wind and solar equivalents of five large nuclear plants a week), a business-as-usual trajectory has Africa, Latin America, and Asia contributing more than half the globe’s carbon emissions by 2030.
That’s not to blame them for the present emergency. The 1.36 degrees of warming now hammering the planet was almost entirely caused by industrialized nations’ fossil fuel consumption. But the next 1.4 degrees will come from the Global South—unless countries in the Global North step in to help them leap-frog fossil fuels and go straight to clean energy. This is a major focus of global climate diplomacy. At COP29, this year’s UN climate conference, being held this month in Baku, Azerbaijan, international climate finance is a core theme.
Convincing developed nations to invest heavily in climate finance is “the mother of all fights,” says Caroline Brouillette, executive director of Climate Action Network Canada. The outcome “will make or break the world’s capacity to limit warming to 1.5 degrees.”
This struggle began with the Paris Agreement in 2015, where wealthy nations first agreed to raise $100 billion (US) per year for the developing world. “You couldn’t have had the Paris Agreement without these finance commitments,” Brouillette says. In 2022, that $100 billion commitment was achieved, thanks, in part, to diplomatic efforts led by Canada and Germany. That was an important milestone—but also a baby step. A slogan now doing the rounds in climate finance circles is “billions to trillions.” The International Energy Agency is calling for international climate finance (all figures in US dollars) to reach $4 trillion by 2030; the UN’s climate body has set a goal of $6 trillion; McKinsey estimates a mere $2 trillion would enable developing nations to adapt to climate change (build protective infrastructure, from dykes to air conditioning) and deploy clean power on a scale that will meet their energy needs without adding to emissions. Whichever estimate you go with, it’s clear that “a quantum leap this year in climate finance” is required, as Simon Stiell, the UN’s climate change executive secretary, said in a speech last April.
It’s in Canada’s best interests to help make this happen—our climate’s future is in their hands, after all. Increasing our own contribution is a crucial first step: we’re currently contributing about $1 billion per year, though more than half of that is delivered through loans instead of grants. That’s a fraction of what extreme weather is already costing us. As the federal government mulls its post-2026 contribution, the Canadian Coalition on Climate and Development is calling on Canada to triple this amount and dramatically increase the proportion of grants over loans. One thing the developing world doesn’t need is more debt.
Following that advice would allow Canada to take the more important next step: convince others—wealthy nations and financial institutions—to join us. Canada has a strong tradition of “punching above its weight” in global affairs, as former prime minister Lester B. Pearson once put it. We helped invent modern peacekeeping, rallied the world to save the ozone layer, and have often championed international diplomacy in a violent world. This tradition has faltered in recent years. The climate crisis presents an opportunity to revive it.
The developing world needs energy. We need them to keep it clean. Renewables are getting cheaper every day, and in much of the world, solar is already the cheapest form of electricity; but fossil fuel’s grip on geopolitics and global finance is such that it continues to suppress the widespread adoption of alternatives. This is an act of sabotage on the stable climate our collective future depends on.
A prime example of that sabotage comes from Colombia. When that country announced a halt to all new oil and gas exploration last year, international financial institutions quickly slapped it with credit downgrades and higher interest rates that left it struggling to meet its debt payments. “Ambition cannot be punished,” Colombia’s delegation protested at COP28 last year, as reported by Argus. “Instead of having incentives to move forward with this political will, our access to capital is becoming more expensive.” If the global community doesn’t reverse course, Colombia undoubtedly will.
It isn’t just oil-producing nations that get screwed. Under the current rules of international finance, poor countries pay more for clean energy because lenders like the World Bank charge them higher interest rates—a constraining factor when you need a loan to build a clean power plant. Risk and crisis expert Avinash Persaud explained this dynamic in a 2023 interview with the World Economic Forum. Persaud compared the challenge of building a solar farm in South Africa as opposed to Germany: “If two similar projects can earn a rate of return on capital employed of 10 percent, and the cost of capital is 4.0 percent in Germany and 10 percent in South Africa, it will happen in Germany but not South Africa.”
In this game, everyone loses. Colombia and South Africa don’t just need our money; they need our help changing the rules of global finance. Canada should provide that help and convince our wealthy neighbours to join us.
We should also get on with lowering emissions at home, of course. There’s no getting around that. But for anyone scoffing that domestic climate policy hasn’t stopped Canada’s wildfires, I’m sure that genuine concern would be assuaged by a commitment to international climate finance. Success there would indeed overshadow anything we do at home. Best of all, it has nothing to do with moral propriety or atonement and isn’t the least bit altruistic. It’s just the smartest way to help ourselves.
With thanks to the Trottier Foundation for helping The Walrus publish writing on climate change and the environment.
