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19 April 2010
As published in the Hill Times:
One unfortunate prevailing idea held by this
government is that dealing with climate change needs to entail
significant economic hardship. This view ignores the human and economic
costs from unmitigated climate change. Many expert economists and
studies also indicate that climate change action will be much more
affordable than we now think, especially if we start today. There are
also a host of other issues, like energy security and economic
volatility from oil prices that can be eased by rethinking our carbon
and energy consumption. The climate change issue is not a problem of
facts; it is the failure to imagine what is possible and what the stakes
are.
While we see next to no action at the federal
level, the Globe 2010 conference which Senators from the Senate
Committee on Energy, the Environment and Natural Resources recently
attended is a microcosm of what is happening globally in the green
economy. The resounding reason I heard there for immediate climate
change action can be summed up with the line from Bill Clinton’s
presidential campaign, “it’s the economy, stupid.”
The
good news is that significant business players are becoming involved in
the green economy. Far from being a gathering of only environmental
activists, the major banks, insurance companies and CEO’s of oil and
other commodity companies were there. They are working with carbon
markets, developing feed-in tariffs for renewable energies, investing in
carbon capture and storage and building a solar energy fed city in the
desert. It is exciting to feel the energy these people have. And, it was
clear at the conference that these players accept climate change
science and believe that we must begin dealing with its implications
quickly.
Huge economic opportunities will emerge
as we restructure our economy to meet the climate change challenges and
green industries become mainstream. It was repeated frequently at the
conference that clean tech is the largest venture capital sector
worldwide. CIBC recently appointed a renewable energy vice-chair in its
wholesale banking division. But, more needs to be done and that involves
shifting our paradigm. The ‘green’ economy is just the economy, and
‘green’ jobs are jobs. Period. This is the way Canada’s major trading
partners and competitors are thinking and we are losing ground by hoping
slight, incremental changes will be sufficient.
In
Vancouver, which hosted the Globe conference, I was struck by the work
that is being done regardless of the federal leadership vacuum on
climate change. The city and the province of British Columbia, are proof
positive that tackling carbon emissions and making green investments
can stimulate the economy. Vancouver has a goal of being the greenest
city in the world. It is working hard to build a clean tech hub, similar
to the IT hub that exists in Silicon Valley, and it is attracting jobs
and investments to its fast growing economy. For the Winter Olympics,
Vancouver built the greenest neighbourhood in North America to serve as
its Olympic Village. The city also has a strong provincial partner. BC
has had foresight to price carbon and will be implementing a
cap-and-trade system. BC Hydro is developing its smart grid and is
rolling out smart meters to every customer. The province will make its
public sector carbon neutral by the end of this year and has set up a
crown corporation, the Pacific Carbon Trust, to generate the one million
carbon offsets that will be required. This will create new
opportunities for BC businesses and farmers.
The
governments of Vancouver and BC have implemented proactive policy,
through a carbon price, and it is driving innovation and economic
growth. A typical criticism of prospective government leadership in this
area is that we need to ‘let the markets work’. This is absolutely
true. But, our markets are currently distorted because carbon emissions
are essentially free despite the significant costs of its negative
externalities. We need governments to price carbon, for instance,
through cap-and-trade, or alternately develop strong incentives for low
carbon activities like the feed-in tariff program in Ontario. This will
develop the economies of scale needed to commercialize new technology
and massively deploy it. This, in turn, brings down prices for
consumers. We seem to forget that government has intervened like this
before, most notably in the Oil Sands where the cost of oil extraction
would not have been economic without significant government investment.
The Conservative government says we need to wait for US
cap-and-trade legislation to take action here. But, a cap-and-trade
system may not be achieved in the US for several years and Canada cannot
afford to miss several formative years of green economic development.
Even without cap-and-trade the US is spending significant amounts on
clean energy and technology, eighteen times more per capita than we are.
China is investing similar amounts. In fact, China and the US have a
wide ranging agreement on clean energy partnerships that is far more
substantial than our clean energy dialogue with the US, which at this
rate has turned into a monologue. Canada may bluster about being a clean
energy ‘superpower’, but frankly, our money is nowhere near where our
mouth is.
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