Ecclectica » Competitiveness and the Environment: A green AND prosperous land?

by The Honourable Scott Smith
Minister of Competitiveness, Training and Trade

Scott Smith

Tommy Douglas, hands down Brandon University's most distinguished alumnus, liked to paraphrase a quotation from William Blake, giving it a social democratic turn. He talked of "building a new Jerusalem in this green and pleasant land." If he were here with us now in the 21st century he might have added a further twist to the quotation, holding up the vision of "a green and pleasant land," in the newer sense of 'green', as environmentally sound. Indeed Tommy was at the federal NDP convention in 1983 where the party pledged, "We believe present human endeavours must become environmentally sound in order to ensure that future generations may have access to an abundant and diverse biosphere."

But is it realistic in today's world, already being clobbered by the effects of human-induced climate change, to hope that we can become green without sacrificing economic prosperity?

The evidence to date is that yes, it is possible. Along with the challenges come many economic opportunities, especially for Manitoba.

You don't have to be rabidly optimistic to join me in this view. Even the hard-nosed magazine Business Week, has said, "Under Doer, sustainable development has become an economic linchpin in the Canadian province of Manitoba." (Business Week, 2 December 2005). The magazine named Premier Gary Doer one of the Top 20 world leaders in tackling climate change, and awarded Manitoba first place among regional governments world-wide in reducing greenhouse gas emissions.

The Stern Review on the Economics of Climate Change found that the benefits of taking action now to mitigate climate change far outweigh the costs. The painstaking 700-page report was undertaken by the economist Sir Nicholas Stern for the British government and released just last fall. Stern estimates that by investing a mere one per cent of global GDP a year in minimizing emissions we can ward off major disruptions to the economy and society that could cost the planet a 20 per cent reduction in GDP. His findings have become the basis for Britain's Climate Change Bill, introduced in March of this year, which would make the country the first to impose legally binding targets for cutting emissions. The report has been lauded by the world's leading economic authorities, such as Paul Wolfowitz, Amartya Sen, Joseph Stiglitz and Jeffrey Sachs.

"There are significant new opportunities across a wide range of industries and services," the Stern Review notes. There will be huge markets for low-carbon energy products, and the effort to control emissions will reduce industrial inefficiencies and save corporations money. New investments and new technologies will mean more economic opportunities. "At the economy-wide level, climate-change policy may be a lever for reforming inefficient energy systems and removing distorting energy subsidies, on which governments around the world currently spend around $250 billion a year."

Tim Flannery, the author of the best-selling book The Weather Makers: How we are changing our climate and what it means for life on earth, has examined the widely ranging estimates on the costs of tackling climate change, from "virtual national bankruptcy to an overall benefit," and concludes that compliance with Kyoto "may even do our economies some good by directing investment into new infrastructure." However, he points out, the costs are "only half of the equation," the other half being the dire consequences of doing nothing. By the way, Flannery came to Manitoba last spring at the invitation of Dave Chomiak, the former minister of energy, and met with him, Finance Minister Greg Selinger and Premier Gary Doer on climate change issues. Flannery said he was on the same page as the Manitoba government, and praised us for our initiatives on emissions control.

Even more sanguine about economic effects of doing more with less carbon is the physicist and founder of the Rocky Mountain Institute, Amory B. Lovins. "The good news about global warming," he asserts in a recent edition of Scientific American, "is that it is cheaper to fix than to ignore." His main argument is that "using energy more efficiently offers an economic bonanza–not because of the benefits of stopping global warming but because saving fossil fuel is a lot cheaper than buying it. The world abounds with proven ways to use energy more productively, and smart businesses are leaping to exploit them."

Businesses are going green. An article in the influential Foreign Policy (September/October 2005) asked the question, "If Kyoto is so dangerous, why is corporate America already playing by its rules?" The authors, Stuart Eizenstat, who headed the US delegation to the Kyoto Protocol negotiations, and Ruben Kraiem, are partners in a law firm that helps companies bring about voluntary reductions in their impact on the climate. "Global business leaders are not waiting for environmental mandates to be handed down from Washington," they say. Business leaders are aware that if they fail to take the lead in developing green technology to bring down their carbon consumption, they will ultimately lose out to competitors who have overtaken them in energy efficiency. These people are pencil sharpeners and cost-cutters, not tree-huggers.

David Suzuki tells us that since the environment is the very foundation of the economy, protecting our environment is essential if we are to have a competitive economy. Countries that realize that sound environmental practices are good for the economy, such as Sweden, Germany, the UK, Denmark and the Netherlands, "are strategically using public policies to spur innovation, investment, technological progress and behavioral change." And here's the kicker: "The countries that are far ahead of Canada in terms of environmental protection are also outperforming Canada economically."

Manitobans, however, don't need to turn to scientists and economists, or to other parts of the world, to see the economic benefits of tackling climate change. They can look to what's happening in their own province today and see how our leadership in climate change and energy efficiency is giving us a competitive edge.

Hydro is our "ace in the hole," as the premier has said, when it comes to Manitoba gaining still more of a competitive edge in an environmentally conscious 21st century. As the Scotia Bank's senior economist told the Winnipeg Free Press last February, "Manitoba Hydro is a huge opportunity for Manitoba. I think you're looking at a wonderful future…It's better than black gold because black gold has a big question mark hanging over it." Manitoba's current hydro-electricity generating capacity can be doubled to 10,000 megawatts, an undertaking bigger than the largest Alberta oil sands project, which would trigger $10 billion in new investments in the Manitoba economy. Preliminary work is underway on the Wuskwatim project and last fall we announced that we would be proceeding with the 1,250 megawatt Conawapa project. First Nations will be sharing in the profits, training and employment opportunities of these developments. And now Ottawa has just pledged support for an east-west power grid. A grid linking Manitoba and Ontario would enable our Crown corporation to deliver huge dividends, both environmental and financial. Our clean hydro power could enable Ontario to shut down their northern coal plants – a step that could bring about the single largest reduction in greenhouse-gas in the country.

We already have one of Canada's biggest wind farms in St. Leon, which is turning out enough power to meet the energy needs of 35,000 homes. Over the next decade the province's 1,000 megawatt wind strategy will stimulate $2 billion in private investment, $100 million in wind-rights payments to landowners and $150 million in property taxes to local municipalities creating economic opportunities for our rural communities, First Nations, construction firms and advanced manufacturing suppliers.

Manitoba is cashing in on the clean energy to be found underground. It's become the North American leader in promoting geothermal heat energy pumps for heating and cooling buildings, with over 5,000 geo-thermal installations a year, more than three times the Canadian average on a per-capita basis. Sales of geothermal pumps earn Manitoba businesses over $25 million a year, an amount set to double in the next few years.

Manitoba has been ahead of the curve when it comes to mandating the use of ethanol in fuel mixes. Here too there are many economic spin-offs, such as more stable income for farmers, less need to import gasoline, alternative markets for farm produce and more jobs in rural areas. It is also encouraging more biodiesel production in rural communities through tax incentives that will give the industry time to grow.

Hydrogen has been called the ultimate fuel of the future. It's abundant and, when used as a fuel, produces no emissions other than clean water vapour. Manitoba was the first province to produce a detailed plan for the development of hydrogen. We're aiming to be the first jurisdiction in North America to produce hydrogen economically, thanks to our abundant supplies of water and hydroelectricity. That could mean a whole new sector for our economy, including value-added products such as fuel cell buses, hydrogen storage and fuel dispensing systems. Last fall, in collaboration with Winnipeg's New Flyer Industries and other partners, we tested a zero-combustion hydrogen-powered bus. In December, Premier Doer signed an agreement with Governor Schwarzenegger of California to promoting further trade partnerships between the two jurisdictions in the areas of low- and no-emission vehicle technology, most notably in the production of hybrid and hydrogen buses and the plug-in hybrid vehicle. And in January of this year the American government announced a $9 million grant for New Flyer and its consortium partners to develop hydrogen-powered buses for the nation's capital. This builds on the memorandum of understanding that Manitoba signed with Iceland in 2003 to share knowledge and experience on leading-edge hydrogen technology.

Manitoba Hydro's Power Smart energy efficiency strategy has helped reduce electricity consumption by 300 megawatts, enough needed to power a city the size of Brandon. Power Smart is a virtual dam, freeing up for export one and a half times the energy generated by a hydro project such as Wuskwatim. Twice in a row the Canadian Energy Efficiency Alliance has given Manitoba the top marks for energy efficiency in the country. The highly successful strategy not only allows Hydro to export more electricity to lucrative markets, but also helps fuel a growing industry in retrofits and more energy-efficient products such as windows. It's been estimated that Power Smart has been responsible for the creation of some 5,000 jobs in Manitoba.

Finally, it's also worth bearing in mind the economic edge that emissions credit markets could conceivably give our province. Economists predict that these markets will be operating in every jurisdiction in Canada and the US by the end of the decade. Jeffrey Rubin, the chief economist of CIBC, says "the carbon wars" are coming to Canada with a vengeance. When a price is put on carbon, clean energy hubs like Manitoba stand to reap the benefits

The rules of the game are changing as the world wakes up to the reality of climate change. But, as I've in this article, Manitoba is ahead of the curve. Our strategies for turning the challenges of tackling climate change to Manitoba's economic advantage have made us leaders.

Yes, Tommy, Manitobans share your vision of a green and pleasant land, and are pursuing this vision as never before.

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