Canada could take a lead in tackling climate change while still prospering economically, according to a study released today. The report says that the country could reduce its greenhouse gas pollution to 25 percent below the 1990 level in the next decade, and at the same time grow the economy by almost 20 percent. Canada’s current target is a reduction of 3 percent below 1990 levels by 2020.
The study isn’t actually predicting a big boom in the economy if Canada gets tough on climate change, but it says it shows that the economy won’t take much of a hit if strong greenhouse gas reductions are implemented.
The study from the Pembina Institute and the David Suzuki Foundation comes on the same day that a struggle over control of the government led to Prime Minister Stephen Harper shutting down parliament. Leaders were arguing over a stimulus package for the economy, and the move by Harper (a Conservative), blocks a potential takeover by a coalition government made up of the more environmentally-friendly Liberal and New Democratic parties. The coalition will have another chance at taking over when parliament starts up again in late January.
The country’s gross domestic product will dip slightly under the tougher greenhouse gas targets, with the study showing a business-as-usual scenario is likely to boost the economy by another two percentage points. But the report points out that in the 2006 Stern Review on the economics of climate change, it’s estimated that the costs and risks of uncontrolled climate change are equivalent to a loss in GDP of at least 5 percent and up to 20 percent or more.
The study says meeting that tougher 25 percent greenhouse gas reduction target will require a significant price on carbon and proposes a starting point of C$50 ($64) per tonne in 2010, rising to C$200 by 2020. The study pushes for either a carbon tax or a cap-and-trade system, as well as targeted regulations and investments to expand the use of cleantech.
Those kinds of cleantech-friendly policies could be more likely to happen under a coalition government. The coalition has promised steep cuts to greenhouse gas emissions and a cap-and-trade system, according to the Canadian Press, but details of the coalition’s plans have yet to be released.
In the scenario laid out in today’s study, by 2020 Canadians could save more than C$5.5 billion each year on gas if there were more efficient vehicles, more public transit, and shorter commutes. A price on carbon could also generate a windfall in government revenue, with the study saying that it could bring in C$87-89 billion per year by 2020. But the government wouldn’t get a chance to spend that cash, as the study said that most of that revenue would go back to Canadians in the form of reductions in income tax.