Canada’s pandemic recovery focus on low-carbon initiatives made it a leader among G20 countries, according to a group of University of Victoria researchers.
The UVic authors released a study last month that said green stimulus – measures that boost the economy while lowering emissions – first emerged after the 2008 financial crisis. However, environmental measures in Canada’s recovery package fell well short of the G20 average at that time.
That wasn’t the case with the COVID-19 recovery effort, where Canada landed fourth among the 20 nations on the UVic authors’ Green Energy Policy Index, which considered countries’ share of stimulus spending and the number of policies that focused on reducing emissions and assisting the low-carbon transition. There was, however, still a high focus on “brown stimulus,” with recovery funds benefitting the fossil-fuel sector, with some of those meant to help lower the industry’s emissions.
When it comes to lowering emissions, green fiscal stimulus is meant to complement regulations and carbon pricing, said Kevin Andrew, one of the authors and a UVic postdoctorate fellow. Despite the emphasis on environmental spending, he said Canada’s climate goals still depend on key pieces of legislation being passed.
“Given that the goal is to meet these emissions reductions by 2030, a concern would be that we need to move very quickly from idea to legislation that would actually bite,” Andrew said.
“There’s room for Canada to be a green fiscal stimulus leader and people to still have questions about other parts of climate policy.”
The federal government says $125 t0 $140 billion in annual investment will be needed to hit net-zero emissions by 2050, and it concedes no government can do that alone. As emerging industries can be risky investments for companies, Andrew said green stimulus is meant to alleviate some of the risk and up-front costs of getting them off the ground.
An example is the recently announced Critical Minerals Strategy. Andrew said B.C., with its historically strong mining sector, could benefit from the initiative by shifting its mining focus to materials needed in low-carbon technology.
The federal budget shows the Liberals have signalled their green spending vision is moving beyond stimulus and toward medium-term investments, the climate finance expert said. That’s highlighted by a $15-billion Canada Growth Fund, which looks to grow low-carbon industries and support the restructuring of critical supply chains. That could pose plenty of opportunity for Greater Victoria’s cleantech industry, Andrew said.
Beyond the study he helped craft, Andrew has sympathy for workers whose industries are changing quickly. It makes him think of his Hamilton steelworker grandfather who helped him become the first one on his dad’s side of the family to go to university.
But with the dangers climate change poses, he said government spending has to focus on supporting those forced to transition to more sustainable lines of work.
“Whether Canada is a leader or not, the world is changing in this direction.”
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