As politicians argue about climate change and carbon pricing, one undeniable fact is getting lost: the world is moving to a cleaner, smarter, low carbon economy.
That is not a left wing or right wing issue. It is an environmental and economic reality. One that requires leadership from an Ontario government of any stripe — through smart policies, incentives and (yes) carbon pricing, to help Ontarians prepare for and prosper in a changing world.
Look around, you can see the change happening. High efficiency buildings with next generation lighting and energy management systems; electric cars on roads lined with bike paths; solar panels on rooftops and farmers’ fields; industries adopting state-of-the art clean technologies.
These once-rare things are increasingly common, and soon they will be the norm. Clean energy now draws more investment than fossil fuel energy worldwide. The sale of gas-powered cars has been banned by 2040 (or sooner) in many countries, including Britain, China, India and France.
This shift to a clean economy is being driven, in large part, by the concerted efforts of governments around the world (spurred by the Paris Climate accord) to bring in low-carbon policies and incentives. This has helped to unleash private initiative and accelerate the pace of clean technology development — reducing the costs of solar panels and electric car batteries by 80 per cent in the past seven years, for example.
Ontario has been among the global front-runners in this economic shift. Like other leading governments, it has used a mix of public policies and incentives to help accelerate the move to energy efficient buildings, smarter transportation, cleaner industries, and greener power. For example, by phasing out coal-based power, the province massively reduced greenhouse gas emissions and harmful air pollution — saving thousands of lives and billions of dollars in health costs.
The centrepiece of Ontario’s efforts has been a cap-and-trade system, linked to California and Quebec. This system puts a price on carbon, to reflect the real environmental costs — an approach that is widely supported by economists as well as business and environmental leaders, because it is the most cost-effective way to reduce emissions, stimulate innovation, and drive energy efficiency.
That is why carbon pricing is now used in seven of world’s 10 largest economies. It isn’t a left wing or right wing idea. In fact, Canada’s first two pricing systems were brought in by right wing governments in Alberta and B.C. And it is championed by conservative leaders around the world, such as Angela Merkel, Arnold Schwarzenegger, and Preston Manning. It reduces emissions at less cost than any other type of policy.
It is no coincidence that the four provinces that have priced carbon had the strongest GDP growth in Canada last year (including Ontario). In fact, since B.C. brought in its carbon tax in 2008, it has reduced emissions by 7 per cent more than the rest of Canada (for sectors it covers), while its GDP growth has outpaced the rest of Canada’s by two-to-one.