Justin Trudeau’s priority in meeting Donald Trump was to find common ground with the unpredictable U.S. president. The Prime Minister is desperate to ensure Canada doesn’t feel the lash of Trump’s protectionist stance on trade. So it’s not surprising that Trudeau seems to have avoided bringing up the awkward subject of climate change.
Few issues divide Ottawa and the new White House as starkly as the risks of our warming world. While the Trudeau government has made carbon pricing a center-piece of its environmental and economic agenda, Trump and the Republican-controlled Congress are notoriously blasé about greenhouse gas emissions.
The Prime Minister has previously said that the United States stepping back from climate action would present an “extraordinary opportunity” for Canada to capitalize. Canada and the US have been at odds on climate policy for more than a decade. First, it was Obama who played climate hawk, while Harper dilly-dallied. Now it’s flipped. Trump and a GOP-controlled Congress are notoriously blasé about the risks of our warming world. Trudeau made a carbon price to mitigate climate risk a centerpiece of Canada’s economic and environmental agenda. When the Liberals came to power in Obama’s time, it seemed a good bet that a newly unified climate stance would continue under a Trudeau/Clinton partnership. That brief interlude of co-operation ended. Though he didn’t say it in Washington, back home Trudeau must now continue to make the case Canada that can go it alone.
The Prime Minister has faced intense pressure from the fossil-fuel lobby, which claims that climate action is economically untenable for Canada in the light of Trump’s policies.
With the Trump card in play it may seem prudent to delay. For some, the additional strain climate action puts on economic activity is sheer folly. We must align environmental regulation with the Americans, the argument goes, or we put our competetiveness at risk. The smart money, however, says otherwise. Climate change is as much economic opportunity as regulatory burden. Not only should Canada act on climate greenhouse gas emissions with a carbon price, but Trump has handed us a perfect opportunity to double down on a complementary and aggressive clean energy technology (‘cleantech’) strategy.
Acting on climate change is certainly a moral issue. Canada has a long history of standing on the right side of the great moral questions of the time. There’s every reason to think Canadians have the stomach to go some way alone on climate. And what the Liberals proposed — a federal floor on carbon pricing that maxes out at fifty dollars a ton — is hardly radical, nor overly burdensome. Since provinces can re-distribute the funds any way they see fit, including reducing things like payroll or income tax, it’s a mistake to see it as a cash grab. And it won’t hurt the economy; the impact, according to Craig Alexander, chief economist at the Conference Board of Canada, is “relatively modest”.
Therein lies the rub. While well-intentioned and politically palatable, Canada’s modest carbon price is not enough. It won’t come close to meeting our climate targets. Nor, by itself, does it position Canada to gain economic advantage. Yet it’s already under attack by those who prefer the status quo. How to square the environmental need for more aggressive action with the political impossibility of imposing a carbon price that gets us there?
The key is to understand the link between Canada’s economic self-interest and global emissions. Canada can move the needle on climate risk far more by exporting innovative cleantech solutions than we ever will cutting our own emissions — especially by exports to emerging economies where energy systems are still being developed. Low-cost Canadian energy storage projects in India, for example, or next-generation cellulosic ethanol plants in China, bring have far more economic and environmental potential than similar efforts at home. Policies that accelerate cleantech exports align our economic self-interest with climate action.
Critics are fond of pointing out Canada is responsible for less than two per cent of global emissions. Flip that argument on its head: if our cleantech sector took by taking just our pro-rata share — two per cent of the global cleantech market — already hundreds of billions of dollars and growing rapidly — our cleantech sector would employ more people than auto manufacturing.
The upcoming Federal budget can ensure Canada gets more than our pro-rata share of the market. The U.S. has successful programs we can learn from. The Cyclotron Road program in California links entrepreneurs to the might of the U.S. National Labs. We have 22twenty-two labs of comparable caliber. We might copy the U.S. Department of Energy in providing critical support in the form of low-cost debt for early commercial deployments of capital-intensive technology. That program was profitable to the U.S. government, and accelerated the likes of Tesla into the market. Successful as these programs were, they are in jeopardy under Trump. Which spells opportunity for us.
The Trump administration’s repudiation of climate science offers Canada the chance to show global leadership and affirm the moral basis of global citizenship in the 21st century. And if the U.S. wants to back off cleantech, let’s eat their lunch. Canada has the capacity to take more than its fair share of the market. their market share, and now is the time to do it.
