Economy versus the Environment


The upcoming October 14th federal election may be a Canadian first - the first time environment and climate change issues might play a defining role in a federal election. While this is a positive step, Canadians should be wary of positions that ask them to choose between the economy and the environment.

We are in the midst of the third election in four years and, despite the polarization of environment / economy issues in the campaign rhetoric, the  reality is that our economic health and the environment are inextricably linked - more now than ever before.

As numerous political commentators have noted, the election may well be won or lost on pocketbook issues as Canadians feel the impact of the global economic slowdown and rising prices for food and gas begin to eat into household budgets. The current meltdown in U.S. financial markets and the downturn in our own stock exchange are also raising anxieties among the electorate.

In the 1970s, when economic times got tough, it marked the end of an era of environmental progress. Here’s hoping we do not to fall into that trap again. Recent polls show that the environmental theme continues to drop down in the list of priorities for Canadian voters. A Globe and Mail/CTV poll found that some 15% of voters believe the environment should be "the most important issue in the next election."  While l 20% thought the economy should be given priority over all other issues. A more recent Ipsos Reid poll places environmental concerns a distant third behind the economy and healthcare. This is a significant drop after the environment had topped the list for the last year.

Notwithstanding, we do not think that Canadians have abandoned their long cherished desires for a cleaner, more environmentally friendly future, or that we collectively should scale back our willingness to shoulder the burdens of dealing with climate change.

In our view the Canadian public still has an appetite for a more aggressive climate change policy from the federal government although there continues to be uncertainty on what that policy should be.

For example commentators and economists continue to debate the merits of a ‘carbon tax’  vs. a ‘cap and trade’ system  even though most would agree that it is imperative that a price needs to be put on carbon if we are to reduce carbon emissions. Economists seem to favour the ‘carbon tax’ which is not politically very attractive in these times of financial crisis while others, we here at Globe included prefer a ‘cap and trade’ regime.  Whichever way we eventually go the real need is for coordinated and concerted action.

Indeed there are a number of  pressing environment-related economic issues that need to be dealt by whatever government is in power, including:

  • Ensuring diversified future energy supplies;
  • Retooling our industrial sectors to make them more sustainable and competitive;
  • Attending to the replacement of our aging infrastructure to better deal with the unavoidable impacts of global warming;
  • Improving drinking water quality for all Canadians; and
  • Doing a better job in mitigating the environmental impacts associated with one of our key economic assets - the Alberta oil sands.

The oil sands have been a favourite target in the national and international media as a symbol of Canada’s failure to attend to a clearly pressing environmental issue, and in some respects the criticisms are deserved.

No one disputes the need to clean up our act with respect to the oil sands, but as noted recently in the National Post by Lawrence Solomon, executive director of the Urban Renaissance Institute, "oil sands developments, far from being among the worst of energy technologies, now have less of a long-term negative impact on the landscape than many of the energy technologies touted as environmental saviours."

We must do more to reduce greenhouse gas emissions associated with the oil extraction process and must ensure that remediation of excavated sites proceeds as promised. But shutting down the oil sands is both unnecessary and unrealistic.

The energy companies involved are keenly aware of the importance that Canada’s politicians and voters have placed on the environment even with the current financial crisis. While the environment as an election issue may wax and wane in the polls, we believe Canadians are committed to taking action on the key environmental issues of the day.  Neither they nor the government that will be elected on October 14th will be able to avoid these obligations.  Nor can they ignore the fact that we are headed towards a North American conversation about energy choices, security and climate change.

Regardless of who wins this contest, the price of carbon will undoubtedly rise and will slowly lessen our dependency on fossil fuel. So too, the next government will have to tackle environmental challenges that not only affect our economic well being, but which also will test our resolve as a nation to deal with the realities of climate change. The real test will be who turns the environment vs. economy trade-offs into winning strategies for economic development and competitive advantage - domestically and globally.

The trick now is to make sure that any environmental policy in Canada is sufficiently clear and concise so that business can plan and make the massive investments needed for major technology shifts such as carbon capture and storage systems, industrial transformation, electricity diversification, renewable energy, or the rebuilding of our crumbling infrastructure into more sustainable systems.

We need to know the rules of the road. Business can live with higher costs and higher taxes; but it can’t function properly under conditions of bad policy or patchwork regulatory regimes. As we have said repeatedly in GLOBE-Net, we need certainty and leadership so business can innovate, invest and compete.

This truly will be Canada’s first ‘green election’ the outcome of which will greatly influence how the business of the environment unfolds for the next few years - and what policies will ultimately set the price for and reduce carbon emissions.

Voters and business are looking for solutions beyond pitting the environment against the economy. Consequently, the question we should ask ourselves on October 14th it is this: Who can deliver the policies that ensure Canada’s natural resources and economy are managed for a greener, more competitive future?

John D. Wiebe
President and CEO of Globe-Net


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