The New Climate Economy (NCE)(external link), a major international initiative aimed at studying and communicating the benefits and costs of acting on climate change, which is part of the Global Framework on the Economy and Climate, launched its flagship report, Better Growth, Better Climate, on September 16th. It has already been garnering major media attention both abroad(external link)and here in Canada(external link), and will feature prominently at the upcoming United Nations Climate Summit, scheduled to kick off in New York on September 23rd.

This new project is aligned closely with Sustainable Prosperity’s focus areas, and as such, this blog (1) describes the project; and (2) discusses implications for us in Canada.

(1) The New Project & Report

The NCE project’s central proposition is that there is a strong economic case to curb climate change (with actions to reduce emissions and stabilize atmospheric levels of greenhouse gases – carbon dioxide in particular), even without considering the benefits of mitigating the risks(external link) that come with a warming planet. This project follows a trend of recent releases from respected economic bodies (such as the IMF(external link) and the World Bank(external link)) that continue to dispel the myth that meaningful emissions reductions will damage economies. By looking at action on climate change with a positive lens – focusing more on benefits of new forms of economic activity that come with action instead of the doom and gloom that is so prevalent throughout the media – this report will likely breathe momentum into the global attempt to reduce carbon pollution(external link).

The project is chaired by Felipe Calderon (former President of Mexico) alongside a suite prominent commissioners(external link) including Co-Chair Nicholas Stern and the OECD’s Angel Gurria, with Jeremy Oppenheim (who is taking a leave of absence from the top sustainability role at McKinsey’s London office for the NCE work) serving as programme director. Mr. Oppenheim spoke recently at SP’s Big Ideas conference in Ottawa, focusing in large part on opportunities for clean-tech in Canada, and highlighting the abundant room that exists for Canada to improve its sustainability performance. You can view the video of his presentation here(external link), and read through his presentation slides here(external link). The Globe and Mail covered the conference – with emphasis on Oppenheim’s talk – in its article titled "Ottawa risking oil investment, conference told(external link)".

The NCE outlined 10 “transformative actions” necessary for a successful shift to a low carbon economy, including:

  • broadly incorporating climate risks into decision making,
  • ending fossil fuel subsidies,
  • addressing urban sprawl with smarter infrastructure/development,
  • pricing carbon emissions, and
  • forging a significant global agreement on addressing climate danger.

These actions touch on many of our research focuses here at SP, such as our work on the effectiveness of carbon pricing tools (see our recent pieces on the BC Carbon tax(external link) and the Quebec Cap and Trade System(external link)) but also to research in our other other program lines such as our recent piece on the importance of natural capital to our economy(external link) and our work looking at the cost of suburban sprawl(external link).

(2) SO WHAT for Canada?

In the wake of the NCE report, there is a clear message for Canada: the development of low emissions policies is accelerating globally and Canada must keep up. This applies both in terms of implementing new policy and augmenting innovative activity. While the NCE report looks at the low carbon economy from the standpoint of a global transition, much of our work at Sustainable Prosperity has looked at this from a Canadian point of view(external link).

Canada will have to respond to the various issues raised in the NCE action plan; notably, the calls for integrating climate considerations into core decision making, deploying funding targeted at clean innovation, establishing consistent price signals that encourage clean economic activity, and partaking in a strong international agreement.

Oppenheim’s presentation at SP’s recent conference emphasized that clean tech markets are big and growing quickly. A 2012report(external link) echoes Oppenheim’s point, remarking that the value of clean tech manufacturing hit EUR 198 billion in 2011. A relatedreport(external link) indicates that while Canada has some late stage, commercialized companies operating in the clean technology area, it lacks leadership in terms of innovation surrounding clean technologies – crucial for moving forward and remaining competitive with our peers. It’s evident that markets for innovative clean technologies are growing rapidly(external link) – and this is particularly notable in the United States and China, Canada’s leading trading partners.

Moreover, Canada needs a more cohesive and efficient approach to carbon reduction; one which includes growth in environmental markets. There is leadership at the provincial level with BC’s textbook example of a carbon tax, and Quebec’s cap-and-trade scheme in conjunction with California. Following their recent annual meeting, and galvanized by the mandates of newly appointed Quebec and Ontario Premiers Couillard and Wynne, the Canadian premiers (all of them) agreed to a national energy strategy(external link), with a focus on climate change and the transmission of energy(external link). This is encouraging. As a nation, we need to do more. And, it can be done. Look at the world’s biggest emitter, China, that recently announced plans for a nation-wide carbon market(external link).

Following the release of the NCE report, NCE Chair Calderon will address the UN Climate Summit 2014(external link).

In sum:

The NCE report points to the immense economic opportunities that go along with a low carbon economy. Transitioning sooner rather than later is in the interests of people and companies. And Canada has a lot to gain. To realize on those potential gains requires, in particular, accelerating the reform of our fiscal system to promote (and accordingly better reflect the value of) the low carbon economy and fuel new innovative activity.

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