Obama, climate change, and Canada

The federal government’s decision to carefully harmonize our national policy on climate change to US national policy has been explained as basic risk management. Why risk putting ourselves at a competitive disadvantage vis-a-vis our largest trading partner. Why impose a cost on economy, the thinking goes, if the Americans don’t do the same on theirs?

For most of the period since 2008, that approach has been a low-risk one as American policy was stuck in neutral. The high water mark of the House of Representative’s passage of the Waxman-Markey bill is just that: a legislative breakthrough that the Congress has not come close to repeating. The ascendancy of the Tea Party, Republican gridlock of Congress, and President Obama’s preoccupation through his first term with the dire economic circumstances his country is dealing with and his personal commitment to health care reform, have not left much room for concerted action on climate.

But if the government’s approach has benefitted from American hesitancy, it has also opened us up to the risk that the Americans – when they do decide to move – will do so with more urgency than we’re prepared to bear and a great deal more attention to their interests than might be good for us.

If the signals going into Mr. Obama’s second term are anything to go by, there may well be a new focus and priority put on climate than has been the case. First, the President’s inauguration speech – short and combative as it was – made clear that Obama personally views the issue as a defining one. Second, his choice of Senator John Kerry as the next Secretary of State was made knowing that the Senator has his own very strong and long-lasting commitment to action on the issue; and is in a position to make decisions that will have serious implications for Canada - from green-lighting the Keystone XL pipeline to establishing American leadership in the global pursuit of climate change action.

The Secretary of State will be the one receiving the International Panel on Climate Change’s Fifth Assessment Report, the latest landmark report from the global scientific body that has been over the years tracking and validating the science of climate change. The Fifth Assessment Report (FAR) is expected – starting in September 2013 when its report on the scientific basis of climate change - to not only verify that climate change is happening, but that it happening more rapidly and more seriously than anticipated. If we remember that the Fourth Assessment Report’s release in 2008 created a new awareness of the issue and catalyzed public support for action, it is probably not too much to expect that the FAR will do the same in spades.

Most significantly, though, the election is being interpreted by many as reflective of a new liberal ascendancy in American politics. Such an interpretation is one that the various interests groups that exist around climate action in the domestic US context will understand and seek to exploit. The pressure to act on an aggressive American policy will be strong and unremitting for the next two years, as the President seeks to establish a legacy for which he will need to the support of many of his liberal allies.

The other important point is that, while American policy action on climate change has not been forthcoming, that does not mean that the Administration has been standing still when it comes to promoting the development of clean energy services and technologies. In doing so, Mr. Obama has clearly been betting that when action on climate does come, the American economy will be well positioned to profit. In Canada, rather than focusing on the markets of tomorrow, we are focused on the markets of today – which eventual action on climate change will dramatically affect.

The conditions for American domestic action on climate change are strengthening, and will likely peak in the next two years. If and when that action does come, Canada's inaction – which the government has sold as an element of competitive advantage – may yet turn into a large disadvantage. That’s the risk of doing nothing.