Frankly, a Low-Carbon Economy Creates Jobs and Growth

Harper was refreshingly frank recently. As reported in the Globe and Mail, he used a June 9 joint news conference with visiting Australian Prime Minister Abbot to declare, “No matter what they say, no country is going to take actions that are going to deliberately destroy jobs and growth in their country. We are just a little more frank about that.

… It’s not that we don’t seek to deal with climate change, but we seek to deal with it in a way that will protect and enhance our ability to create jobs and growth, not destroy jobs and growth. Frankly, every single country in the world feels the same way.”

Well, that’s pretty clear. It seems that we have a stark choice: enjoy jobs and growth by bringing land-locked fossil fuels from the oil sands to market and by continuing to rely on a fossil fuel economy, or choose job-killing climate stabilization actions. Jobs and growth will trump climate stabilization efforts every time, everywhere.

But what if, as Mr. Harper hints, “we could deal with [climate destabilization] in a way that will protect and enhance our ability to create jobs and growth, not destroy jobs and growth.” What if transforming Canada’s economy to a low-carbon, green economy provided more jobs and better growth than a business-as-usual high-carbon economy? Is that possible? Well, yes it is, and it’s not new news.

A Low-Carbon Economy Provides More Jobs  

In 2009, Robert Pollini, James Heintz, and Heidi Garrett-Peltier in the Department of Economics and Political Economy Research Institute (PERI), University of Massachusetts-Amherst, published a landmark study: “The Economic Benefits of Investing in Clean Energy.” Its findings are summarized in the adjacent figure: an economy based on clean renewable energy creates over three times as many jobs as an economy based on dirty fossil fuel energy.

The 2012 Canadian National Roundtable on the Environment and the Economy (NRTEE) report, “Climate Prosperity: Framing the Future- Embracing a Low-Carbon Economy,” reinforces this finding. If Canada transitioned to a low-carbon economy by 2050, 402,000 full-time equivalent jobs would be created, versus 224,000 FTE jobs with a business-as-usual scenario. This should be welcome news for politicians committed to job creation.

A Low-Carbon Economy Stimulates Growth

Economic growth is usually measured by gross domestic product (GDP). GDP is enhanced by expenditures. The above NRTEE report projects the capital expenditures required to make the transition to a low carbon-economy in Canada by 2050. As shown in this figure, investment in low-carbon goods and services are about twice as high as the business as usual case. For politicians committed to GDP growth, that is a very good thing.

At an international level, a May 2014 report by the International Energy Agency (IEA) estimates that achieving a global low-carbon energy system will require investments of $44 trillion by 2050, or $1.2 trillion per year. That will provide a huge boost for the GDPs of countries that are serious about avoiding climate destabilization. Amazingly, the investment is profitable. Transitioning to a low-carbon economy results in $115 trillion in fossil fuel saving, netting $71 trillion in savings, globally.

GDP Growth plus Well-Being Growth

As an aside, using the GDP as measure of country well-being and progress is ludicrous. As explained in my March 2011 blog, “5 Reasons Why a GPI [Genuine Progress Indicator] Should Replace the GDP,” the GDP measures the wrong things and ignores the right things. The bonus from investing in low-carbon economy is that both the myopic GDP and the rings of things that really matter in the adjacent figure are all positively impacted.

So, Mr. Harper should take his own admonition to heart – that “no country is going to take actions that are going to deliberately destroy jobs and growth in their country.” Happily, we can deal with climate destabilization in a way that will “protect and enhance our ability to create jobs and growth, not destroy jobs and growth.” The transition to a low-carbon economy provides more jobs and better growth than continuing to support a fossil fuel-based economy. Surely, this transition will be embraced by Mr. Harper as a job creator and growth stimulant. Otherwise, people may distrust his economist credentials and question his motives for continuing to support the irresponsible agenda of the fossil fuel sector. Frankly.

As usual, the above slides are from my Master Slide Set.

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