{"id":24477,"date":"2026-01-30T13:38:52","date_gmt":"2026-01-30T13:38:52","guid":{"rendered":"https:\/\/www.rbc.com\/en\/?post_type=rbc_tl&p=24477\/how-to-avoid-triggering-a-capital-flight"},"modified":"2026-02-02T20:08:17","modified_gmt":"2026-02-02T20:08:17","slug":"canadas-cold-calculus-in-a-warming-arctic","status":"publish","type":"rbc_tl","link":"https:\/\/www.rbc.com\/en\/thought-leadership\/climate-action-institute\/climate-crunch\/canadas-cold-calculus-in-a-warming-arctic\/","title":{"rendered":"Climate Crunch: Canada\u2019s cold calculus in a warming Arctic"},"content":{"rendered":"\n
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\u2794 Winter Olympics: running out of slope?<\/p>\n\n\n\n

\u2794 Chinese EVs: low emissions, high drama<\/p>\n\n\n\n

\u2794 Notes from Davos: The looming fight for grid power<\/p>\n<\/div>\n<\/section>\n\n\n\n

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Hot takes<\/h2>\n\n\n\n

\u2794 Only four locations would be able to host Winter Olympics by 2050 if current climate trajectory persists.<\/strong> The 2026 Winter Olympicorganizers are powering venues in Milan and Cortina d\u2019Ampezzo with certified renewable electricity and sustainable sourcing, even as the February event is expected to emit around 930,000 tons of CO2. More crucially, snow management remain an issue as the Alpine region has seen a 25% drop<\/a> in snowfall since 1980. It\u2019s a problem that\u2019s unlikely to go away: a new University of Waterloo<\/a> study shows that of the 92 potential Winter Olympic host locations, only 52 would remain-climate reliable for the winter edition and 22 for the Paralympics in the future, if current climate policies persist. Without snowmaking technology\u2014only four<\/a> will reliably be able to host the event by 2050.<\/p>\n\n\n\n

\u2794 China-made EVs could lower Canadian transport emissions\u2014but at a political cost.<\/strong> The decision to allow Chinese EVs in return for Canadian agri-food access comes as Canadian federal and provincial governments have rolled back subsidies. EVs have done the heavy work of lowering Canda\u2019s emissions over the past six years, with transport emissions down 6% compared to 2019, according to Climate Action 2026<\/a> report. Cheaper EVs could help maintain the momentum. But rumblings from Washington suggest the deal could complicate CUSMA negotiations.<\/p>\n\n\n\n

\u2794 Canada\u2019s agri-food processors are not waiting for policy perfection. <\/strong>In Atlantic Canada, processors are investing to extract more output from less energy and water, while farmers see emission cuts as a way to boost productivity, observed our Interim Head Lisa Ashton<\/strong>, during her trip to Prince Edward Island to share Climate Action 2026<\/a> report\u2019s findings. PEI farmers are leading the way with their 2040 Pathways<\/a> plan to reduce GHG emissions, accelerate on-farm climate adaptation actions, and boost economic outputs and trade by 2040. It\u2019s an example of how farmers can organize and design a pragmatic plan to drive environmental and economic outcomes for their businesses.<\/p>\n<\/div>\n<\/section>\n\n\n\n

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Warming up to the north<\/h2>\n\n\n\n

Nowhere has climate change, resources and geopolitics collided more quickly. U.S. interest in the Arctic island of Greenland and Russian ships patrolling<\/a> the region should compel Canada to cover\u2014and bolster\u2014its northern bases.

Climate change is the trigger for interest in the Arctic: <\/strong>Washington\u2019s sudden interest in the \u201cpiece of ice<\/a>\u201d is sparked by a climate-change induced thaw that\u2019s opening up the region to activity\u2014 benign or otherwise. The Arctic has just ended a year of record heat and shrunken sea ice<\/a> as northern latitudes become rainier and less ice-bound due to the climate crisis, scientists say. That\u2019s also accelerated a race for control by the U.S., Russia and \u201cnear-Arctic state\u201d China. Canada needs to catch up.

While the Arctic\u2019s location is strategic\u2014so are its resources. <\/strong>The northern region contains significant fossil fuel reserves\u2014an estimated 13% (90 billion barrels) of the world’s undiscovered conventional oil resources <\/a>and 30% of its undiscovered conventional natural gas resources. In addition it also contains rare earths, nickel, cobalt, graphite and other elements that are vital for energy transition. While it\u2019s unclear whether the region can meaningfully meet rising global energy demand at cost and at scale any time soon, the faster the region warms, the more attractive and accessible its resources would become.

Sovereignty and strategic competition: <\/strong>Canada\u2019s Arctic sovereignty is shaped by competing interpretations under the United Nations Convention on the Law of the Sea, with Canada ratifying the treaty and defining extended continental shelf claims, while the United States has signed but not ratified it.<\/p>\n\n\n\n

The North American Aerospace Defense Command (NORAD<\/a>) detected and tracked Russian military aircraft operating in international airspace near Alaska in 2025, while China and Russia launched a joint patrol in 2024<\/a>.<\/p>\n\n\n\n

Canada\u2019s calculus:<\/strong> Canada makes up 28% of the Arctic land area<\/a>, second only to Russia\u2019s 67% Arctic landmass. However, the Canadian Arctic accounts for just under 2% of the Arctic region\u2019s economy, and negligible population.

The Major Project Office\u2019s focus on developing Churchill Port<\/a> at the mouth of Hudson Bay, the Red Chris Mine Expansion and the North Coast Transmissions Line and Ksi Lisim LNG, along with a separate $1-billion<\/a> investment to strengthen the North\u2019s trade and transportation infrastructure, suggests Canada is joining the Arctic race. Getting these proposals to completion would be the ultimate test. The projects\u2014and more defence spending\u2014will be vital to allay U.S. concerns about the vulnerability of the Canadian Arctic.  But they also need to be respectful of climate and Indigenous issues.
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Notes from Davos: The looming fight for grid power<\/h2>\n\n\n\n

By John Stackhouse, Senior Vice President, Office of the CEO, RBC<\/em><\/p>\n\n\n\n

John was at Davos last week to make sense of the new world order and a global economy that\u2019s resembling more a bartering and babbling souk <\/em>than a tightly wired marketplace. Among his observations, two directly impact energy and climate: the competing priorities for grid power, and the continued rise of renewable energy\u2014against all odds. Read the excerpts:<\/p>\n\n\n\n

A\/C or AI: It\u2019s gridlock
<\/strong>The next energy crisis won\u2019t be fuelled by oil or gas; it will be strained by the world\u2019s faltering electricity grids. Electricity demand globally is rising three times faster than total energy demand, driven by air conditioning and electric vehicles, as well as data centres.

While 90% of Americans have access to air conditioning, the number is 20% in India, 18% in Indonesia and 5% in Nigeria\u2014each with some of the world\u2019s fastest-growing cities. Add to that the growing demand for EVs, which now account for a quarter of global car sales, up from 5% in just five years.

Fatih Birol, head of the International Energy Agency, said the world will need 10,000 terra-watts of new electricity in the next decade, which is the equivalent of adding another U.S., Canada, Europe and Japan. Without any innovation breakthroughs, that would require 70% more copper, and a vast expansion of steel and critical minerals processing.<\/p>\n\n\n\n

A renewable lease on energy:<\/strong> <\/em>There were two vastly telling moments in Davos\u2019s main Congress Hall, one speaking to scarcity, the other to abundance. Donald Trump went off script to lambaste renewable energy, especially wind which he said was for \u201closers.\u201d

A day later, Elon Musk used the same stage to profess a glorious future for renewables, especially solar which he said could power all of America if he had his way. Just give him a parcel of land, 160×160 kilometres, and tariff-free solar panels! Away from North America, renewables are still the driver of energy growth and have shifted from a \u201ctransition\u201d source to a default for new supply in many markets. Europe reached roughly 50% renewable generation in 2024.

In other fast-growing markets, renewables are increasingly seen as energy additions, not just replacements for fossil fuels. Falling battery costs (solar is down roughly 80% in India) and longer lifetimes (30\u201335 years) have helped shift economics from a simple cost per unit to a cost per lifecycle.

Read John\u2019s full Davos commentary here<\/a>.<\/p>\n<\/div>\n<\/section>\n\n\n\n

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The Institute in Action<\/h2>\n\n\n\n