Economic Risks and Climate Change

  • National Newswatch

There is clear economic risk to Canada in ignoring climate change. There is also great economic opportunity in dealing with it.The resistance to Northern Gateway, Energy East and Keystone XL pipelines is evidence that the Canadian and US publics want greater assurance of environmental responsibility in developing energy projects.Well into the ninth year of its mandate, the Canadian government has failed to facilitate the construction of a single pipeline to open new markets. It has failed to provide the leadership to secure the social license - the permission of the public - to build these projects. People are unconvinced that there is an independent "third party" protecting their environment.The costs to Canada from these concerns are not speculative. Even at $75 per barrel, every day that the Gateway Pipeline is delayed costs about $37 million in lost revenue, Keystone XL $60 million and Energy East $82 million. That's $65 billion per year.Risk of not finding new markets is heightened given that the US is essentially the only export market for Canada's oil and gas now, and the US could well be self-sufficient in gas and possibly in oil in the foreseeable future.Canada will also miss the economic opportunity in technological development, capital investment, and jobs that will come with dealing with climate change. Dollar for dollar, investment in renewable energy and in energy conservation creates more jobs than investment in oil and gas projects. Fighting climate change will catalyze an economy of the future, not damage it.Some argue that there is no point in Canada acting on climate change until big polluters like China, the US and others do. But, each time one of them makes a serious commitment to doing so, the Canadian government argues we have to wait for yet some other country to act first.In his book, "Waking the Frog: Solutions for Climate Change", Tom Rand makes the point that China is quite happy to "out-psyche" us into thinking that they are doing nothing while in fact they are working away on the technologies to realize a renewable energy future and to monopolize the technologies to do it. We will be left behind.Climate change impacts are already costing the economy money and jobs. The Calgary, Toronto and more recent Western flooding, the receding Great Lakes, droughts, etc. have cost billions in damage and disrupted economic activity and jobs. Insurance rates and coverage are becoming issues.Enlightened government would be leading Canadians to tackle these risks with a different vision of our energy future. An alternative vision begins by government dropping the unrelenting attacks on environmental groups and review processes, and convincing the public that it "has their back" on the environment. Ironically, the social license to develop our oil and gas resources responsibly will be earned by embracing environmental concerns, not by fighting them.Next, we need to use the wealth generated from oil and gas development to transition to an energy future where renewable energy and conservation are significant.The federal government must work with the provinces. How difficult would it be for the Prime Minister to bring the Premiers together to talk about the risks of climate change?The federal government should also structure an open public discussion of the issue. The Klein era round table process in the mid 1990's was a masterful way of engaging Albertans in constructive discussion of change. A well-focused Royal Commission process could do the job too.Those who get squeamish about government intervention in all of this should remember that government played a critical role in the development of the oil sands at a time when they were far from commercially viable. Why should there not be government leadership in catalyzing renewable energies that face the same challenges and the same potential economies of scale, and technological breakthroughs that ultimately made the oil sands commercially viable?This Canadian government, with its jobs mantra, should be all over the economic risks of ignoring climate change and the huge opportunities that exist in leading the charge to deal with it. A big part of that would be the development of renewable energy and conservation strategies.Grant Mitchell is a Liberal Senator representing Alberta.