2020: A Different Approach on Climate Change
2019 was characterized by polarizing responses to geopolitical events. People felt compelled to “take sides” in ideological debates; right vs left, AOC vs Trump, good vs bad, us vs them, etc. The desire for compromise was eclipsed by manufactured outrage. Viable policy solutions were not as sexy as angry protestors. Have we gone too far? Have we become too divided? This is where 2020 could be different. A new year and a new decade may provide the opportunity to formulate sensible solutions to the most pressing matters.
A current issue–posing a significant threat to humanity–is climate change (I want to preface the balance of this piece by stating that global warming is a reality. It is a proven scientific fact). There is much disagreement over how to solve this problem. Proposed solutions are controversial. Many experts contend the implementation of effective environmental policies will adversely impact the economy. However, environmentalists maintain the economic costs are secondary. Greta Thunberg states, “we are at the beginning of a mass extinction, and all you can talk about is money and fairy tales of eternal economic growth.” Indeed, we are not living in a fairy tale–the economy is not fictitious. The real economy is driven by income, employment, housing, and other key indicators. We cannot simply ‘throw caution to the wind’ vis-à-vis the economy because the ramifications would be disastrous. Many individuals would starve, some corporations would declare bankruptcy, and certain elected bodies would be unable to provide essential services (due to lost tax revenue). Here, amidst the tension between the environment and economy, is a chance to compromise.
Management of the Canadian natural resource sector illustrates how governments and corporations could work together to ensure a feasible transition towards a greener economy. Currently, clean energy technology is not sophisticated enough to provide consumers with sufficient alternatives to the services provided by oil and gas. Therefore, in the short-run, the government should support companies by facilitating the exportation of their products and pipeline expansion. On the production side, Canada’s energy market complies to a strict regulatory framework. Our resources are cleaner than most other large producers (e.g. Russia). If Canadian firms cannot meet the market’s demand, the government will have to import dirty oil and gas. The transportation of products via pipelines is safer than rail. A lack of egress (ability to transport oil and gas) has forced many firms to move their products across Canada on trains. Potential crashes pose a significant risk to the environment. For example, in July 2013 47 people were killed when a train–carrying crude oil–derailed in Lac-Megantic, Quebec. The town is still recovering from the disaster.
Utilizing our natural resources offers a plethora of economic benefits. The oil and gas sector employs many workers, particularly in Alberta. Strong employment levels drive consumer spending which creates economic growth through the multiplier effect (“The multiplier effect refers to the proportional amount of increase in final income that results from an injection of [consumer] spending”). Resource companies could export their products to foreign markets, assuming Canada’s demand is fully satisfied. This will increase firms’ top line while ensuring that other countries have access to high quality oil and gas products. The Canadian government would also benefit from enhanced profitability through increased corporate tax revenues. The government could invest these funds in projects that create sustainable technologies. Assuming green technology continues to improve, Canadians could transition towards environmentally friendly consumption habits in the long-run. Corporations in the energy sector would have the financial resources–assuming Ottawa passes legislation that facilitates a steady flow of their products–to invest in research and development and labour training. This would allow them to alter the provision of their services. Additionally, the government could provide subsidies and/or tax credits to encourage firms alter their business models going forward.
What I have suggested is not a perfect solution. Unfortunately, there is no easy fix. Politicians, on extreme ends of the spectrum, will continue to frame this debate as a zero-sum game. An ‘all or nothing’ or ‘life or death’ situation. Such a strategy ensures headlines and it may even win a few votes. But it fails to create effective outcomes. Decision makers should ask themselves how they can best represent their electorate. The answer should be to conceive balanced, workable solutions that benefit all of society’s stakeholders. In an early Democratic primary debate, John Delaney, a moderate Congressman, advocated for passable legislation in a hyper partisan environment. Elizabeth Warren responded, “I don’t understand why anybody goes to all the trouble of running for president of the United States just to talk about what we really can’t do and shouldn’t fight for.” Warren must not realize that collaboration can change the world so that we no longer need to fight. And that the best outcomes are often the product of constructive discourse between individuals with divergent perspectives.