According to a group of researchers from the University of Victoria, Canada’s focus on pandemic recovery on low-carbon initiatives has made it a leader among G20 countries.
UVic authors published a study last month that found green stimulus measures — measures that boost the economy while reducing emissions — first emerged after the 2008 financial crisis. environmental measures of Canada’s stimulus package were well below the G20 average at the time.
This was not the case with the COVID-19 recovery effort, where Canada ranked fourth out of 20 countries on the UVic authors’ Green Energy Policy Index, which has taken into account countries’ share of stimulus spending and the number of policies focused on reducing emissions. and support the low-carbon transition. However, the focus was still on “brown stimulus,” stimulus money benefiting the fossil fuel sector, some of which was intended to help reduce emissions from the industry.
When it comes to reducing emissions, the green fiscal stimulus is meant to complement carbon regulation and pricing, said Kevin Andrew, one of the authors and postdoctoral fellow at UVic. Despite the focus on environmental spending, he said Canada’s climate goals still depend on passing key legislation.
“Given that the goal is to achieve these emission reductions by 2030, a concern would be that we would have to move very quickly from idea to legislation that would actually be biting,” Andrew said.
“There is room for Canada to be a leader in green fiscal stimulus and for people to still have questions about other aspects of climate policy.”
The federal government says an annual investment of $125 billion to $140 billion will be needed to achieve net zero emissions by 2050, and it admits that no government can do it alone. As emerging industries can be risky investments for businesses, Andrew said the green stimulus aims to mitigate some of the initial risks and costs of getting them started.
An example is the recently announced Critical Minerals Strategy. Andrew said British Columbia, with its historically strong mining sector, could benefit from the initiative by shifting its mining focus to materials needed for low-carbon technology.
The federal budget shows the Liberals have signaled their vision for green spending goes beyond stimulus and toward medium-term investments, the climate finance expert said. This is underscored by a $15 billion Canada Growth Fund, which aims to grow low-carbon industries and support the restructuring of critical supply chains. This could provide many opportunities for Greater Victoria’s cleantech industry, Andrew said.
Beyond the study he helped author, Andrew has sympathy for workers in rapidly changing industries. It reminds him of his Hamilton steelworker grandfather who helped him become the first member of his father’s family to go to college.
But with the dangers posed by climate change, he said public spending needed to focus on supporting those forced to switch to more sustainable activities.
“Whether Canada is a leader or not, the world is moving in this direction.
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