Low Carbon Economy: 2 Canadian proposals and International Evidence of Decoupling

Smart Prosperity  is a new Canadian group, launched at the Globe 2016 conference in Vancouver, and supported by a civil society groups including business, youth, Indigenous people, researchers, environmental groups (including WWF, Pembina Institute, Nature Conservancy), and  labour organizations, notably the United Steelworkers.  Its launch document,  New Thinking: Canada’s Roadmap to Smart Prosperity  outlines five action areas:  1.  Accelerate clean innovation across the economy;  2: Boost energy and resource efficiency;  3: Price pollution and waste ; 4: Invest in advanced infrastructure and skills;  5: Conserve and value nature.

From the Broadbent Institute, which is also a member of the Smart Prosperity collaborative, comes A Green Entrepreneurial State as Solution to Climate Federalism by Brendan  Haley. The author supports a uniform national carbon pricing system, but continues.. “ the government should also not limit itself to market-based approaches, since other policy actions are needed to create low-carbon economic and political momentum attuned to regional needs and catalyzing concrete low-carbon innovations.”  Conclusion: “The federal government can support the development of low-carbon transition pathways by providing analytical tools in areas such as GHG accounting, energy systems analysis, and scenario development. The results can inform the allocation of federal R&D efforts, infrastructure funds, and green development bank investments.”   Haley acknowledges a large debt to the work of Mariana Mazzucato and her widely-cited book, The Entrepreneurial State: Debunking Public vs. Private Sector Myths (2013) . Mazzucato has since published The Green Entrepreneurial State  (SPRU Working Paper October 2015) , and “A State-powered Green Revolution” in The Syndicate (March 10).

Two recent international reports add to the  mounting evidence that a low carbon economy can be achieved within a healthy economy.  The International Energy Agency in Paris titled its March 16  press release,  “Decoupling of Global Emissions and Economic Growth Confirmed”  ,  as it released data showing energy-related emissions of CO2 steady for the second year in a row, while renewable energy surged.    And an OECD study,  Do Environmental Policies Affect Global Value Chains?   (March 10) concludes that regulations to curb pollution and energy use do not necessarily hurt businesses by creating new costs – challenging the theories of carbon leakage made by some.  Based on historic trade data for developing and developed economies, the OECD report concludes that countries with stringent environmental laws suffer a very small disadvantage in pollution-intensive sectors such as steel-making, chemicals, plastics and fuel products, but that this is compensated  for by advantages in cleaner industries like machinery or electronics. The study uses an “OECD Environmental Policy Stringency indicator”, is a composite index which assigns  higher values to represent a more stringent policy. An interactive table  shows Canada’s Stringency score at 2.8 in 2012, (which is the OECD average). The most stringent country is Denmark (4.2), followed by Netherlands (3.6); the U.S. and Japan rank 2.6.

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