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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