Diana Carney

Green vs. Growth: the false dichotomy

July 17, 2012

Earlier this month the UK’s Confederation of British Industry (CBI: the UK’s top business lobbying organization) released a report entitled The Colour of Growth: Maximising the Potential of Green Business.

In Canada we are used to hearing about the conflicts between `green’ and `growth’. This report – authored not by an environmental NGO but by the powerhouses of British industry – argues forcefully that this is a false dichotomy. Indeed, its underlying premise is that green is not just complementary to growth but a vital driver of growth in the UK.

The main messages of the report are that:

  • Green means opportunity.
  • In order to stay ahead and fully exploit green growth opportunities the UK needs a coherent, consistent and strategic policy framework from government.
  • The UK should project an overarching brand in the green economy: government action is critical to this.
  • Consumers will only play their role in the green economy if they receive the right facts and consistent government messaging.
  • Long-term strategies for energy-intensive industries must be developed. These should be sector-specific decarbonization roadmaps that enable such industries to play a role in the low-carbon transition.

As one commentator put it: `In essence, the CBI is calling for a policy framework that is both simpler and more ambitious – a system of regulation that is streamlined, stable, and sharply focused on giving businesses the confidence they need to invest.’ (James Murray http://www.businessgreen.com).

UK business (or at least a significant section of it) has clearly bought into the economy of the future and is pushing the government to provide the right incentives and enabling environment for innovation and success. What stands out in the report is the need for consistency and predictability in the policy environment.

Would that were all we needed in Canada. Consistency here is sorely lacking (witness the flip-flopping on home energy retrofits and feed in tariffs, battles over electricity prices as well as the far bigger problem of a government that is committed to facilitating ever-increasing fossil fuel extraction while still paying lip service to a 17% reduction in carbon emissions over 2005 levels by 2020). But our problems run deeper. We also lack a meaningful overall commitment to decarbonization, a sensible debate about the facts and opportunities of the green economy, and any shreds of the international credibility that might enable us to develop a green Canada brand (one of the key proposals in the paper written for Canada 2020 by Stewart Elgie and Alex Wood in The Canada we Want in 2020).

Indeed, while the CBI bemoans a lack of green brand in the UK, a report by the American Council for an Energy-Efficient Economy, also released this month, ranked the UK as no.1 overall in energy efficiency (which must enhance the brand somewhat). Canada came a dismal 11 out of the 12 largest economies, beating out only our old foe, Russia. And while the UK is home to over 75% of all carbon market trading desks, our current federal government has firmly rejected the idea of carbon markets in favour of a slower, far less efficient, regulatory approach. (This, in response to the fact that the public apparently has no appetite for carbon taxes: unsurprising if there is neither leadership nor good information on these topics issuing from government.) It comes as no shock, then, that we pick up all those fossil awards and are currently battling for the future of what the European Union would like to designate as `dirty oil’.

The CBI report states that `In trying economic times, the UK’s green business has continued to grow in real terms, carving out a £122 billion share of a global market worth £3.3 trillion and employing close to a million people. ‘ This is real growth in a dynamic market, something that should motivate all politicians in the current environment. Furthermore, a high concentration of UK green exports go to Asia (around 20%, including 12% to China and Hong Kong), a priority area for Canadian trade.

So where do we start? We do have green business in Canada and we are not doing badly in renewables, despite the pro-fossil fuel stance of our federal government. Ernst and Young recent rated Canada as coming 8th (out of 40 surveyed countries) in terms of `renewable energy country attractiveness’  (the UK ranked 5th, China came out top). It cited the Ontario election result and our relative strength in wind, as well as ambitious plans for harnessing wave power in BC, as key factors in this ranking.

When it comes to green investment, we are well behind European countries and the US. Not only have we been at it for a far shorter time, but we also have far less money invested in the green economy. Investeco, Canada’s first environmental investment company currently manages just $35million for over 100 Canadian Investors. Compare with the UK where just this year a government-sponsored Green Investment Bank that aims to release 3bn (sterling) to fund green infrastructure was incorporated.

So now is the time to cash in on the hidden advantage of playing catch-up: we do not need to reinvent the wheel. Let’s start by heeding the CBI’s advice ….just substitute Canada for UK below:

 `If we are to capture the full value of the low-carbon transition …. we need to think about what a smarter approach looks like within the context of a broader industrial strategy. We should look to build up and promote UK strengths, identify strategic opportunities and ensure that we have the right institutions and intellectual infrastructure to underpin these activities. In doing so, we can make sure that the UK is best placed to supply – and export – the solutions.’
(The Colour of Growth: Maximising the Potential of Green Business, p.6).

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