Global shift to greener economies happening because of economic benefits, panelists say

Laura Ryckewaert / Hill Times

Governments and economic leaders around the world are increasingly speaking out about the economic impetus to address climate change and the need to shift to green economies, but Canada is dragging its feet and investing money and attention into further developing existing, traditional energy sources, experts said Saturday at a Broadbent Institute summit panel on green economies.

“There are many people who think we can only have a greener economy by having less of the other things, and other people who think we can have more of the innovation and prosperity but only by having a less green economy. I think that’s fundamentally wrong,” said panelist Chris Ragan, associate professor of macroeconomic and economic policy at McGill University in Montreal, adding the two sides need to stop being pitted against each other.

The Broadbent Institute’s first-ever Progress Summit is being held at the Delta hotel in downtown Ottawa from March 28-31. On Saturday, Mr. Ragan, Bruce Lorrie, president of the Ivey Foundation, Tom Rand, Cleantech adviser at the MaRS Institute, and Clare Demerse, a fellow with the Broadbent Institute and director of federal policy at the Pembina Institute, took part in a discussion on “The (good) business of building a green economy.”

Panel moderator Jeremy Runnals, managing editor of Corporate Knights magazine, said it doesn’t take a hard look to see that change is underway globally when it comes to economic policies and the environment. Over the past year-and-a-half, global economic leaders, including International Monetary Fund director Christine Lagarde, have spoken out about the economic impetus to address climate change, he said.

Globally, a transition to clean energy is already well underway, said Ms. Demerse, with more than $1.5-trillion invested in the global clean energy sector to date. Ms. Demerse said in some international markets, alternative energy technologies like wind and solar are already “cost competitive with the fossil fuel alternative.” With an international shift towards green energy policies and a reduction of carbon emissions, Ms. Demerse said there’s a strong fiscal argument to investing in new energy sources that are environmentally friendly.

 “At this point in Canada we’ve got a couple of options. One is we can choose to build that resilient, diversified clean energy economy that can compete successfully in a low-carbon world, or we can run the risk of sinking billions more into infrastructure for oilsands production that the world’s markets ultimately may not want,” said Ms. Demerse.

She said greenhouse gas pollution from the oilsands is at a level that oilsands growth is set to undue other efforts made to reduce carbon emissions over the years. Ms. Demerse said if countries around the world begin taking the environment more seriously, oilsands development will look increasingly “fragile.”

“So making that clean energy transition, I would argue, is a safer economic choice for Canada, even before we look at the risks we would run economically from climate change itself,” she told attendees.

Mr. Ragan, who qualified himself as a macro economist and not an environmental economist, said finding “clever” policies that encourage both innovation and environmental protection would create a better economy overall.

A redesign of our current fiscal structure is a “crucial piece” of the puzzle, he said. Governments need to be prepared to make those kinds of shifts, like imposing new taxes on activities that create pollution, while in turn lowering taxes on personal income to address “both halves of that package.”

“None of this ought to be, in a sensible world, a partisan issue,” said Mr. Ragan, who later added that Canada has been “passive-aggressive obstructionists” in the global environmental conversation in the last few years.

In response to Mr. Runnals questioning whether an economic indicator other than GDP should be used to measure economic growth, Mr. Ragan said in terms of calculating national assets, when a tree is cut down to make lumber, we should probably also be accounting for the loss of that tree, an idea that was met with applause from attendees.

Mr. Lorrie said better information and better measurements will help bring about more investment in green technology, and said right now there’s an information-gathering deficit, pointing to the cessation of the long-form census as an example.

Mr. Rand said “energy incumbents” continue to invest in finding more oil and gas reserves which are likely to be limited by environmental regulation as the world works to combat climate change, rather than investing to find new sources of energy. Mr. Rand said he thinks enhanced geothermal energy is the “holy grail” of clean energy. Despite the fact that clean energy investments make economic sense, Mr. Rand said the market isn’t rational, and companies need to be incentivized to invest in clean energy.

Ms. Demerse said Canada needs to take its own approach to improve environmental regulations and shift to a green economy and can’t look to the U.S. as a marker because the circumstances simply aren’t the same as the U.S. does not have an oil sands equivalent.