It’s the environment and the economy, stupid

On Monday, December 10th, 2012 in Articles by Elizabeth

One of the most persistent and confounding fallacies of political discourse is the idea that we must choose between environmental protection and a healthy economy. According to years of polling, Canadians reject the idea. Poll after poll shows that Canadians think that both can be achieved. Lest anyone assume this is based on an unreasonable desire to have our cake and eat it too, the empirical evidence is all in support of the good sense of Canadians.

Work at Harvard from Michael Porter made the case in 1995 that those countries with the toughest environmental laws and regulations also score highest in competitiveness. In the groundbreaking analysis, co-authored with Class van der Lindt, “Green and Competitive: Ending the Stalemate,” Porter made the case that those countries with the toughest environmental regulations are those rated highest in competitiveness.

“Properly designed environmental standards can trigger innovations that lower the total cost of a product and improve its value.”

Those types of “good” regulations and standards are those that Porter classifies as “innovation-friendly.”

Put simply, pollution is a sign of market failure. It is a waste of energy, value, and resources. And it can create long-term liabilities. The most pressing of all issues (and this is not intended to be narrowly read as all “environmental issues”) is the threat of the climate crisis. The dumping of pollution in the form of greenhouse gases into the global atmosphere is at no cost to polluters because the cost is not internalized.

However, that is not to say there are no costs. The costs to societies are real. Costs are felt in billions of dollars of insurable losses, and billions more uninsured in poorer regions, due to increasingly severe and frequent severe weather events.

A report of the now-shuttered National Round Table on Environment and Economy estimated that annual costs in Canada are already serious and could climb to a significant portion of GDP on an annual basis. If any other economic trend line suggested the economy would suffer, government would be expected to have taken action.

Tragically, the warnings appear to have no impact at all on the Prime Minister as he is so deeply rooted in the binary notion that we can either have the environment or the economy not both.

The first step, carbon-pricing, is accepted as necessary by virtually all international agencies from the World Bank to the International Energy Agency. Even CEOs from major oil multinationals, such as Shell and BP, have called for carbon-pricing, yet still the Prime Minister rejects the idea.

Carbon pricing has been consistent with increased economic growth. Sweden adopted a carbon tax and has reduced greenhouse gases to below its Kyoto target while, over the same period, experiencing substantial growth in its GDP.

As suggested above, the climate crisis is no longer an environmental issue. It is a security threat. As it is ignored year after year, the current warnings of scientists are for levels of global warming that put in doubt the survival of human civilization. Some scientists now speculate about the possibility unimaginable a few decades ago that inaction could result in human extinction.

British scientist Sir Martin Rees puts odds of homo sapiens surviving into the next century at 50-50. I think it is premature to talk about extinction of humankind, but it is not re-assuring that any scientists think the possibility is now open. Nevertheless, it is hard to imagine how human civilization, our institutions and rule of law, would possibly survive the chaos of a planet besieged with the events unleashed at 4 C warming.

And that is the level of warming now projected based on the range of anemic actions of industrialized and hugely polluting developing countries. And we are told we cannot take the actions necessary to act on the climate crisis because it might hurt the economy.

It is totally false to say that we cannot reduce greenhouse gases and move to a low carbon economy without killing our economy, but the flip side is definitely true. If we do not act to move to a low carbon economy we could destroy our children’s future. Inaction will cost our economy more than the prudent actions to address the crisis, but shouldn’t we be motivated to act knowing that our failure could rob our own children of their future?

Elizabeth May is the Member of Parliament for Saanich-Gulf Islands and Leader of the Green Party of Canada.
Originally printed in the Hill Times.

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