Ehren Cory: How can infrastructure investments help address the challenges and the goal of net-zero by 2050?

Toby Heaps:  What gets funded gets done. Green infrastructure investments are the most fundamental requirement for building a green economy. Getting to a near-zero-emission economy means that we will electrify almost everything and complete the decarbonization of our grid over the coming few decades. Right now, even though we are moving faster than many people thought was possible, we are not keeping up with our own commitments, and we are also missing out on action in the global economy as the low-carbon expansion peels into high gear.

EC:  What role is the Canada Infrastructure Bank playing in those efforts? How will the federal budget affect the CIB’s ability to make a difference in the fight against climate change?

TH: The 2022 federal budget estimated that the annual climate investment gap in Canada is as high as $115 billion per year. Part of this gap is due to a lack of economic incentives resulting from bad policy (unnecessary red tape and carbon-pricing loopholes that massive dump trucks loaded with tar sands are driving through every day), but a significant chunk of the climate investment gap is the result of arcane financial plumbing details that stem the flow of capital to otherwise economic projects. That’s where the Canada Infrastructure Bank comes in. The CIB is like the plumber we need to unclog things and prime the pump so things can really get flowing.

The public investor has been a central player in the building of Canada from the very beginning, from the railway to the highway system to the electric grid, and we need the public investor to step up now to the historic challenge presented by climate change.

The recent federal government announcement to increase CIB’s long-term capital allocations to clean power and green infrastructure projects to $20 billion ($10 billion each) is a welcome and well-earned vote of confidence in the CIB’s central role in unlocking the vast sums of investment required to decarbonize our economy.

EC:  What do you believe needs to change about efforts to tackle climate change?

TH: I would say our attitude and sense of urgency need to change. The revolution is now, not tomorrow. We need to, at least temporarily, increase the flow of public money into essential green infrastructure to prime the pump, get to economies of scale and demonstrate the positive benefits of this infrastructure for making things more comfortable and affordable. This will open the way for institutional, business and individual investment to complete the job. 

We have declared a climate emergency, but we are not acting as if it were an emergency. The COVID response has shown us that we are capable of mounting such emergency responses, and in fact the money spent on combatting the virus is less than what it would take to mount an effective emergency response to climate change. We need to demonstrate that the solutions yield many collateral benefits that are often valued more by people than the lowering of greenhouse gas emissions. We know what it would take, we have a sense of what it would cost, we know we can afford it and that costs of not addressing climate change will be much higher than bringing it under control. And we know the sooner we seize the moment to scale up climate investment, the greater will be our share of the enormous economic expansion of the carbon economy that is now well underway.