The economy vs. the environment
Not to suggest this is zero-sum game, in which there is only one winner and one loser, however, given the nature of our economy and over-reliance on fossil fuels, certain economic and political factors will hinder our ability to aggressively pursue stricter environmental policies. A hard reality that will need to be addressed at a time when more people will view environmental policies as a luxury item.
For instance, consider Canada’s much maligned tar sands. Producing significantly more greenhouse gas per barrel of oil, these projects are the target of many domestic and international environmental groups (reviewed recently here). However, the tar sands projects are also a significant, albeit controversial, economic driver in western Canada (international capital investment, job creation and taxation). With consistently negative economic forecasts (The Economist Intelligence Unit has downgraded its forecast for GDP growth in Canada this year to -1.6%), any action that will further impede our economy should be considered very carefully. Carbon surcharges, currently proposed by US Congress could create additional costs of several hundred million dollars to these projects. While the intention of these surcharges is to spread the resulting income into technology development and incentives, the more likely result for the tar sands will be making their extraction more costly, thereby making other sources more attractive. With reduced demand comes reduced credit purchase and less reinvestment into green technologies (net loss Canada).
On a more positive note, the various stimulus plans have yielded some modest opportunities. This week, the Province of Ontario announced its plans to fast-track wind projects, seen as an method of creating more green collar jobs. Unfortunately our federal government didn’t have the show the same foresight, when it decided not to include any “greening” initiatives to its tax credit for homeowners.
Shifting our economies towards sustainability will have a cost. Unfortunately, given our current economic situation, that cost is looking increasingly less appealing. However, in this age of Keynesian Economics, opportunities do exist to move towards sustainability while supporting our flagging economy, through sound public policy.
Among the key features of Bill 150:
- Creation of a Renewable Energy Facilitation Office
- Streamlined Approvals Process
- Feed-In Tariff Program
- Expedited Connections for Renewable Power Projects
- Planning Act Exemptions
- Conservation and Demand Management Directives
- Smart Grid
- Generation by Municipal Electric Utilities
- Renewable Energy Cooperatives
I’m glad to see at least one level of government is spending my stimulus dollars on creating new industries (and new jobs), instead of keeping certain other failed industries alive.
Kevin currently manages initial client engagements with the MaRS Venture Group. He also administers a federal fund that provides mentorship to start-up companies across Ontario. See more…