Canada needs to
implement its own progressive carbon policy rather than following
the “mindless US path”, says famed Harvard University professor
Michael Porter.

In a speech delivered in class=”xn-location”>Montreal yesterday to an audience of
international business, policy and academic leaders prior to the
2010 World Congress of Environment and Resource Economists, Porter
said what we really do need is, in effect, a carbon tax. “That is a
very visible, transparent, fair approach that is likely to trigger
the appropriate innovation.”

The carbon capture-and-trade model that the U.S. “has patched
together” is too complicated and blunts incentives that would
enhance innovation and competitiveness, said Porter at a symposium
organized by the Sustainable Prosperity network.

Professor Porter, widely seen as
the world’s top competitiveness expert, was the keynote speaker of
the High-level Experts lunch panel on how environmental regulations
can be designed to boost innovation and competitiveness. Porter
argues that strong environmental regulation need not hurt the
economy, but can drive innovation and growth.

Quoted in an interview with the Montreal Gazette following his
presentation, Porter said that carbon and energy issues are
becoming critical factors in economic growth.

“Even if you don’t believe in climate change, we do understand
the fundamental importance of energy and energy costs,” he said. “A
carbon tax would lead to a rethinking of energy use, drive
innovation in the green economy and yield profits for “first
movers,” he added.

“I think there is plenty of evidence
that that works (where it has been implemented in Europe), and it
has been implemented in a very intelligent way in B.C., and it’s
working there.”

In earlier writings Porter has written: “Countries need an
entirely new way of thinking about the relationship between
environment and industrial competitiveness. No lasting success can
come from policies that promise that environmentalism will triumph
over industry, (or) that industry will triumph over
environmentalism. Instead, success must involve innovation-based
solutions that promote both environmentalism and industrial
competitiveness.”

“Porter’s message is especially relevant for class=”xn-location”>Canada,” said class=”xn-person”>Professor Stewart Elgie, chair of
Sustainable Prosperity. “If we act now and put a price on carbon
emissions, rather than waiting for the U.S., it will not hurt
Canada’s economy - and will likely improve our competitive position
in an ever-greening global economy.”

Sustainable Prosperity and Resources for the Future hosted the
one day high-level symposium entitled “The Porter Hypothesis at 20:
How Can Environmental Regulation Enhance Innovation and
Competitiveness?.” The Chair’s href=”http://www.sustainableprosperity.ca/files/PH@20%20Chairs%20Paper.doc”
target=”_blank”>Background Paper on the Porter Hypothesis is
available for download .

The event was designed to explore how class=”xn-location”>Canada should position itself to prosper
in a future low-carbon economy, with specific reference to these
issues:

• How can businesses become greener and more competitive, and
  stay profitable



• Is Canada wise (economically) to wait for the US before
  regulating carbon emissions?



• What approach is best for regulating carbon and pollution
  (green taxes, cap & trade, clean technology
  subsidies)?



• What can policy-makers learn to help put in place regulations
  that promise positive economic and environmental
  outcomes?

Michael Porter’s PowerPoint Presentation is available href=”http://www.sustainableprosperity.ca/files/PH@20%20Michael%20Porter%20Keynote%20slides.pdf”
target=”_blank”>here.