Davos Report Says Climate Change Striking Harder than Expected

2008-style systemic collapse’ expected if human-caused CO2 isn’t halved in decade.

Climate change is striking harder and more rapidly than expected, and the global economy is facing an increased risk of stagnation, according to the Davos World Economic Forum’s most recent Global Risks Report.

“The world cannot wait for the fog of geopolitical and geo-economic uncertainty to lift,” said the report. “Opting to ride out the current period in the hope that the global system will ‘snap back’ runs the risk of missing crucial windows to address pressing challenges.”

The World Economic Forum (WEF) said that it was the first time in the 15-year history of the report that environmental concerns were the top long-term risks in the Global Risks Perception Survey. It said climate-related issues dominated all the top-five long-term risks by likelihood among members of the WEF’s multi-stakeholder community

The report said the last five years are expected to be the warmest on record, and that natural disasters are becoming more intense and more frequent, including unprecedented extreme weather throughout the world during the past year alone. It also said that global temperatures are on track to increase by at least 3°C toward the end of the century, which is twice what climate experts say is the limit to avoid the most severe economic, social, and environmental consequences.

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Powerful economic, demographic, and technological forces are shaping a new balance of power that has resulted in an “unsettled geopolitical landscape” in which states are increasingly viewing opportunities and challenges through a unilateral view, the report also said.

“What were once givens regarding alliance structures and multilateral systems no longer hold as states question the value of longstanding frameworks, adopt more nationalist postures in pursuit of individual agendas and weigh the potential geopolitical consequences of economic decoupling,” said the report. “Beyond the risk of conflict, if stakeholders concentrate on immediate geo-strategic advantage and fail to re-imagine or adapt mechanisms for coordination during this unsettled period, opportunities for action on key priorities will slip away.”

The WEF said climate-related economic risks threaten a “2008-style systemic collapse,” unless net human-caused carbon dioxide emissions fall by 50% in 10 years relative to 2010, and to net zero by 2050. It said reaching these targets will require “serious, interconnected economic and societal transitions” at macro and micro levels that depend on technological innovation and serious commitments from governments and businesses.

“So far, however, commitments are inadequate given the urgency of the challenge and current trends are not encouraging,” said the report. “Most critically, demand for energy is continuing to increase and much of this demand is still being met by fossil fuels.”

The WEF said that global energy demand increased 2.3% in 2018, which was the fastest pace in a decade, and that China, the US, and India account for nearly 70% of the rise. Additionally, energy demand is expected to grow by more than 25% in 20 years due to population growth, increasing incomes, and urbanization.

“There is a clear tension between calls to green society and the drive, particularly in emerging markets, to boost economic growth through investment in carbon-heavy projects such as roads, dams, energy resources, mines and ports,” the report emphasized. It also added that coal power plants built in Asia in the last decade accounted for nearly one-third of the total increase in carbon dioxide emissions in 2018. It also said annual subsidies for fossil fuels are approximately twice that of subsidies for renewable power globally.

“The next 10 years will shape the outlook for climate risk for the rest of the century,” said the report. “To avoid the worst consequences, global emissions need to peak almost immediately and decline precipitously.”

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Charles Emond Named CEO of Quebec Pension Fund CDPQ

Head of private placements replaces Michael Sabia, who leaves after nearly 11 years.

The board of directors of the C$326.7 billion ($247.2 billon) Quebec pension fund Caisse de depot et placement du Quebec (CDPQ) has named Charles Emond as its new president and CEO effective February 1.

Emond replaces Michael Sabia, who announced in November that he would leave the fund after nearly 11 years at the company to run the University of Toronto’s Munk School of Global Affairs and Public Policy.

The board said the decision came after “an exhaustive and rigorous selection process,” and was approved by the government of Quebec.

“For more than 25 years, Charles has accumulated vast international experience and in-depth knowledge of Quebec businesses and the business community,” Robert Tessier, chairman of CDPQ’s board of directors, said in a statement. “Charles has throughout his career demonstrated his ability to carry out complex and important files by mobilizing his teams and managing relations with the various stakeholders with a long-term perspective.”

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Emond is currently senior vice president, Quebec, private equity and strategic planning at CDPQ, which he joined last February after almost 20 years at Scotiabank. He was named head of all private placements in November after Stephane Etroy announced he was stepping down as vice president and head of private investments outside Quebec. CDPQ decided to consolidate all its private investment activities in Quebec and internationally under Emond, giving him oversight of direct and indirect investments in nearly 800 companies.

While at Scotiabank and Scotia Capital Emond led a large group of teams deployed in Canada, the US, Europe, Asia and Latin America. He also directed Scotia Capital’s activities in Quebec. He is a graduate of HEC Montreal and holds the title of CPA and the title of expert in business valuation.

“Managing the Caisse is a challenge that I accepted to take on with great pride and a lot of humility, but also with confidence because I know that I will be able to rely on the expertise and great talent of our teams,” Emond said in statement. “I want to continue to build this organization so that it responds well to the great challenges of our time, including that of developing our economy of tomorrow, investing sustainably, while generating returns for our depositors in the future.”

Under Sabia’s leadership the fund rebounded from the 2008 financial crisis by refocusing on the long term, and the drivers of fundamental values ​​of the companies and projects in which it invests, said CDPQ. It produced returns of 9.9% over 10 years as the size of its assets nearly tripled from C$120.1 billion.

In 2017, Sabia spearheaded CDPQ’s investment strategy to fight climate change, which included reducing the carbon intensity of its portfolio by 25%. Earlier this year, the fund, along with a coalition of major global investors, announced that its portfolio would be carbon neutral by 2050.

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