There is only one future economy, and it’s green

We can no longer discuss the economy in isolation from the climate crisis. Put bluntly, we have no economic future if we continue to assume the changes to meet the Paris Agreement commitments are mere tweaks on “business as usual.” Nor do we avoid climate disaster through carbon pricing alone. We need to set a course to get off fossil fuels entirely.

Prime Minister Justin Trudeau is the first prime minister in our history to say so out loud. In his recent opening address at the Vancouver Globe conference he said, “We all know we have to get beyond fossil fuels.”

For those who think this is only a rhetorical statement, check out the latest science. Dr. Joeri Rogelj, research scholar at the International Institute for Applied Systems Analysis in Austria, is the lead author of a critically important new paper published in February 2016 in the respected journal, Nature Climate Change. The paper, “Differences between carbon budget estimates unravelled,” represents the work of numerous scientists in Europe as well as from the Canadian Centre for Climate Modelling and Analysis within Environment Canada.

They conclude that all of our estimates of the atmospheric budget for the amount of greenhouse gases (GHG) that can be dumped into the atmosphere before the catastrophic impacts of climate change become unavoidable have been far too generous.

Dr. Rogelj says: “In order to have a reasonable chance of keeping global warming below 2°C, we can only emit a certain amount of carbon dioxide, ever. That’s our carbon budget.

“This has been understood for about a decade, and the physics behind this concept are well understood, but many different factors can lead to carbon budgets that are either slightly smaller or slightly larger. We wanted to understand these differences, and to provide clarity on the issue for policymakers and the public.

“This study shows that, in some cases, we have been overestimating the budget by 50 to more than 200 per cent. At the high end, this is a difference of more than 1,000 billion tons of carbon dioxide.”

One impact of understanding the concept of a global carbon budget is that most of the known reserves of fossil fuels must stay in the ground. The 2012 World Energy Outlook of the International Energy Agency made this point. It set out starkly: No more than one-third of proven reserves of fossil fuels can be consumed prior to 2050 if the world is to achieve the 2°C goal.

But that calculation was made under the too generous analyses that predate the new assessment. The carbon budget is shrinking. As Governor of the Bank of England, Mark Carney, made clear in his presentation at a side event to COP21, the fossil fuel industry is saddled with “unburnable carbon.” Carbon Tracker, an independent financial think-tank now tracks the problem of stranded carbon assets. As the carbon bubble bursts, many companies will be found to have over-estimated their assets. They are over-valued and are a bad investment. Investment dollars are increasingly migrating away from fossil fuels. Two years in a row, 2014 and 2015, global investment in renewables has outstripped global investment in fossil fuels.

And note, thus far, all calculations I have cited are to keep global average temperature to no more than 2°C. The Paris Agreement, with leadership from Canada, called for striving to avoid increases above 1.5°C. What is the difference?

As one leading IPCC scientist explained it to me at the COP21 meeting in Paris, if we want a reasonable probability of keeping the Greenland ice sheet intact, we should stay at no more than 1.5°C. We might avoid losing the Greenland ice sheet at 2°C, but the odds are not nearly as good. And what happens to Canada if we lose the Greenland ice sheet? Sea level rise of seven to eight metres. And it is even worse for Canada, according to the team led by Dr. Richard Proctor of University of Toronto, if we lose the Western Antarctic ice sheet.

The damage to our coastal cities would not merely be “environmental damage.” It would be an economic catastrophe. We cannot merely greenwash our current economy. This is a challenge of re-imagining our current economy.

While a challenge, it is also an economic opportunity on the scale of the transition from horse and buggy to the Model T Ford. This is an economic revolution in which many innovative entrepreneurs and corporations will be huge winners

Canada has been lagging in the new industrial revolution. For the sake of job creation, innovation and competitiveness, we have to catch up. In 2016, there is no economic strategy that does not start with the fundamental question: does this investment help us get off fossil fuels?

Originally published in the Hill Times.