American conservationist David Brower ironically observed that “we are at war with nature, and we are winning.” The floods in Pakistan are one front in our clash with the planetary boundaries that define the rules for everything we do, but the war with nature will come to your doorstep soon.

Of course, there is no possibility of winning such a war, and UN Secretary General António Guterres has declared that “making peace with nature is the defining task of the 21st century and must be the top priority for everyone, everywhere.”

We know how to make that peace. The outlook would be bleaker if we did not know what needs to be done, or if what we needed to do was not also the path to renewed prosperity and economic justice.

The Corporate Knights Climate and Economic Renewal Plan describes a pathway to peace based on energy efficiency, electrification and expanding the supply of carbon-free energy. Some of its key components include:

• Retrofit, modernize and electrify most of the existing nine million residential and commercial buildings across Canada, with a priority on affordability for everyone.

• Rapidly expand the supply of renewable electricity and storage and increase inter-provincial grid connections.

• Increase electric vehicle market shares to 100% of light vehicles and 75% of trucks, with 10 million EVs on the road by 2030 and a fully built-out trans-Canada fast-charging infrastructure, supplemented by 2,000 kilometres of new bicycle rights-of-way and infrastructure support.

• Reduce the greenhouse gas emissions of steel and cement production by 50% or more by 2030.

• Support the economic conversion of Canada’s oil patch to a post-petroleum era by redeploying expertise and resources to growth sectors and high-value-added opportunities such as the burgeoning carbon fibre market.

• Increase the supply of critical minerals while exemplifying the social, ethical and environmental attributes of what mining must become in a sustainable economy.

• Convert 30% of agricultural land to low-till cultivation practices by 2030.

Compared with current climate-change-response spending in Canada of $15 to $25 billion per year, the Corporate Knights plan has capital requirements of $126 billion per year over the next critical decade. This aligns with other estimates that an effective emergency response to climate change will require investments in the order of 5 to 6% of GDP.

How this total is split between public and private sources of capital will depend on policy and will vary by sector, but the overall effort required is still within the range of our previous efforts to respond to existential threats and broken economies. A $126-billion-per-year investment plan for climate and economic renewal is certainly possible in Canada, an economy with an output of $2 trillion per year and capital investments of $450 billion per year, and whose government alone just spent $500 billion in an emergency response to the COVID pandemic.

Unlike most of the expenditures on COVID, many of the investments needed to respond to the climate emergency would not only pay for themselves but would position Canada for decades of economic prosperity. As the world ramps up its efforts to address the climate crisis in the 2020s, it will create a $9-trillion-per-year market for smart building solutions, electric vehicles and related batteries and infrastructure, renewable grid technology, critical minerals, sustainable biotechnologies, plant-based protein and other building blocks of the post-fossil economy.

Just as the successful economies of the 20th century were those that were able to capitalize on fossil fuels and combustion technologies, the successful economies of the 21st century will be those that have the technologies and know-how to operate within planetary boundaries.

As we have witnessed in Pakistan and countless other places in recent months, climate chaos is relentless, unforgiving and on the march. The status quo is no longer the safe option, and it hasn’t been for some time now. And in any case, as David Brower also once remarked, “I don’t think we were built to be safe; I think we were built to try things.”

Ralph Torrie is the research director at Corporate Knights.

Related post:

For more on the plan visit corporateknights.com/investmentplan.

The post The price of making peace with nature appeared first on Corporate Knights.

Some parts of the Inflation Reduction Act negotiated by coal baron and West Virginia Senator Joe Manchin face continuing opposition from the U.S. climate community. But analysis by the non-partisan Energy Innovation think tank shows the overall package avoiding 24 tonnes of greenhouse gas emissions for every tonne it permits from new oil and gas production, Inside Climate News reports.

“The numbers really are very, very clear here,” said Anand Gopal, the organization’s executive director of strategy and policy. “This is a very good deal for the climate.”

“I can’t stop talking to my kids about the climate provisions,” said Senator Chris Murphy of Connecticut. “This is the first time they’ve been legitimately excited about my job. We really owe it to the next generation to get this right, and a lot of young people in this country were developing an acute sense of hopelessness that adults weren’t taking seriously the climate crisis.”

“We’ve been fighting for this for decades,” agreed Hawaii Senator Brian Schatz, as he left the Senate chamber in tears. “Now I can look my kids in the eye and say we’re really doing something about climate.”

“This bill is going to change America for decades, and you did it,” Senate Majority Leader Charles Schumer told his colleagues.

The massive and unexpected climate win began to take shape in late July, less than two weeks after Manchin said he was walking away from months of negotiations on the Biden administration’s much larger Build Back Better initiative. With Manchin onboard, Democratic leadership still had to negotiate with the other potential holdout in their caucus, Arizona Senator Kyrsten Sinema. While her main concerns with the legislation were unrelated to its climate and energy provisions, she ended up wrangling an additional $4 billion for drought relief in the water-starved southwestern U.S.

Leading into the final series of votes, pundits also predicted “bruising” pushback from Vermont Senator Bernie Sanders, including an amendment to pull Manchin’s substantial fossil fuel handouts out of the final bill. But Sanders’ amendments received little or no traction, with a couple of them defeated by 1-99 and 1-97 margins.

Energy Innovation’s assessment shows the legislation reducing U.S. emissions 37 to 41% from 2005 levels by 2030, short of the country’s Paris agreement target of 50 to 52% but close enough to “make up the difference with executive actions and changes to state law,” Inside Climate says. Analysis by other U.S. groups reaches similar conclusions.

Now, the U.S. House of Representatives “is set to reconvene at the end of the week to vote on the package,” The Hill reports. “Final passage by the House would send it to the White House for President [Joe] Biden’s signature less than three months before the midterm elections.”

Thousands of Lives, Millions of Jobs

Independent reviews of the bill point to benefits far beyond the immediate climate gains.

Analysis for the U.S. Blue Green Alliance by the Political Economy Research Institute (PERI) at the University of Massachusetts Amherst found the more than 100 climate, energy, and environmental investments in the bill will create more than nine million jobs over the next decade—including five million in clean energy, 900,000 in clean manufacturing, 900,000 in efficient buildings, 600,000 in “natural infrastructure”, 400,000 in clean transportation, and 150,000 in environmental justice.

The Energy Innovation analysis “projected that particulate matter pollution in the United States would fall—potentially preventing 3,700 to 3,900 deaths annually by 2030, in addition to 99,000 to 100,000 avoided asthma attacks, and 405,000 to 417,000 avoided lost work days,” Inside Climate writes.

“It’s a large industrial policy bill with incredible amounts of incentives for onshoring of clean energy and clean technology, manufacturing,” Gopal said. “It’s a pretty big job adder, with possibly up to 1.5 million new jobs by 2030, a lot of that concentrated in manufacturing, construction, and service.”

As expected, the final vote in the evenly divided Senate pitted 50 Democrats and Independents against 50 Republicans. Vice President Kamala Harris cast the tie-breaking vote in her role as Senate President.

In addition to its “game-changing” menu of climate and clean energy initiatives, the bill will generate $300 billion in new tax revenue from the country’s wealthiest corporations and reduce the country’s deficit by $300 billion according to Democrats, $90 billion over 10 years according to the independent Congressional Budget Office, The Hill says.

A detailed analysis by the Rocky Mountain Institute shows the bill cutting inflation and strengthening the U.S. economy, even as it slashes emissions.

“For the United States, the Inflation Reduction Act offers an unprecedented opportunity to lower energy costs, increase investment in clean energy economic opportunities, and stimulate jobs and economic growth,” the Snowmass, Colorado-based RMI writes. The focus on domestic manufacturing will also add reliability and efficiency to the “fragile global supply chains” that drove inflation in the period after the COVID-19 lockdowns.

“Over time, these investments promise to boost U.S. innovation and stimulate regional economic growth, from car manufacturing in the Midwest to solar production in the Sun Belt,” RMI says. “The broad investment should improve overall U.S. economic competitiveness: By accelerating a clean energy industrial revolution, the bill can permanently lower costs for U.S. households and businesses.”

Other analysis of the legislation pointed to “seismic” gains for solar and grid electrification, a coming “market transformation” driven by “generous incentives” for home and vehicle electrification, and a 10 to 50% reduction in the cost of microgrids to boost local resilience.

Elated U.S. climate groups were quick to heap praise on the decision.

“The Inflation Reduction Act is a victory for all Americans and shows the world that the United States is still an ally in the global fight against climate change,” said World Resources Institute President and CEO Ani Dasgupta. “This legislation isn’t a panacea for climate change—and no bill ever will be,” she added. So “U.S. states, cities and the private sector all need to step up their efforts for the U.S. to fulfill its climate targets and prove to the world that America stands by its word.”

“Rising inflation and global instability have put America’s energy security in jeopardy,” said Advanced Energy Economy CEO Nat Kreamer. “A federal clean energy investment of this magnitude is our best defence. The era-defining investments in the Inflation Reduction Act will more than pay for themselves by creating thousands of good American jobs, decarbonizing our electricity and transportation sectors, and reducing Americans’ energy bills.”

The Price of a Deal

With the Senate bill in the books, ClimateVoice founder and former Google green energy head Bill Weihl still pointed to “predatory delay” by America’s biggest companies as the leading barrier to climate action in Washington, DC.

“Big Oil, pro-fossil fuel companies, trade associations, and others have enormous power and influence, and they use it to stymie progress on climate policy,” he told Climate & Capital Media. “Meanwhile, most other companies sit on the sidelines. They weigh in occasionally—but far too rarely and with far less intensity and volume than those seeking to preserve the status quo and delay real action.”

Those forces were at work in the days leading up to Sunday’s vote. In an odd twist Saturday, the Wall Street Journal reported that Senate Republicans were lobbying their fossil industry allies—not the other way around—in a last-ditch effort to stop the bill.

“The time is now for America’s [fossil] energy producers to stand up and be very clear about how these destructive policies will raise prices, destroy jobs, and make us less secure,” Senator John Barrasso of Wyoming, chair of the Senate Republican Conference and ranking member of the Senate Energy and Natural Resources Committee, said in a statement.

A day earlier, Mountain State Spotlight and ProPublica were out with a history and critique of the Mountain Valley Pipeline, a partly-completed fracked gas line that was a part of Manchin’s price for supporting the wider climate bill. The project has raised local concerns about impacts on water, forests, and endangered species, even as its cost has ballooned from $3.5 to $6.6 billion.

“It’s a hard pill to swallow,” said Mark Jarrell, a retired golf course manager now deep into the fight against the pipeline. “We’re once again a sacrifice zone.”

Under a side deal between Manchin and Schumer, the White House and Congress will “step in and ensure final approval of all permits” the pipeline needs, the news story states. “In essence, the Democratic leadership accepted a 303-mile, two-state pipeline fostering continued use of fossil fuels in exchange for cleaner energy and reduced greenhouse emissions nationwide.”

A one-page summary of the side deal committed “relevant agencies to take all necessary actions to permit the construction and operation of the Mountain Valley pipeline”, and switch jurisdiction over any future disputes to a court that Manchin hopes will be more sympathetic to the project, Grist reports. But it doesn’t appear to exempt the pipeline from major environmental laws, like the National Environmental Policy Act and the Endangered Species Act, that it’s run afoul of in the past.

“From what I’m seeing, they still need to show they comply with the law even if the summary language is that it should be approved,” Center for Biological Diversity lawyer Jared Margolis told Grist. “There’s nothing in this language that suggests to me that Congress is directing the courts to rule in Mountain Valley’s favour in ongoing litigation.”

This article is republished from The Energy Mix. Read the original article.

The post Nine million green jobs could be on the way as U.S. Senate passes $369-billion climate bill appeared first on Corporate Knights.

The West Virginia senator (and coal baron) announced Wednesday afternoon that he had agreed to support a bill – called the Inflation Reduction Act of 2022 – that will see $369 billion go toward climate solutions, such as subsidies for electric vehicles and tax credits for home energy retrofits. Less than two weeks ago, Manchin had said he wouldn’t support such a bill until he saw July’s inflation numbers, which still haven’t been released. 

“By a wide margin, this legislation will be the greatest pro-climate legislation that has ever been passed by Congress,” said Senate Majority Leader Chuck Schumer in a statement.  

The bill is not as ambitious as President Joe Biden’s Build Back Better bill, which would have spent around $500 billion on climate action. That legislation did not move forward, as Manchin refused to back it in the evenly divided 50–50 U.S. Senate. But the new bill’s authors say it could put the U.S. “on a path” to cut greenhouse gas emissions by roughly 40% by 2030.  

Manchin released a lengthy statement on the bill Wednesday that mainly addressed inflation and national debt, as the legislation will also raise $739 billion in revenue and spend $300 billion on deficit reduction. The 725-page bill will additionally spend $64 billion extending subsidies for the Affordable Care Act. 

“[We] must stop pretending that there is only one way to combat global climate change or achieve American energy independence,” Manchin said in his statement. “The Inflation Reduction Act of 2022 addresses our nation’s energy and climate crisis by adopting commonsense solutions through strategic and historic investments that allow us to decarbonize while ensuring American energy is affordable, reliable, clean and secure. The need to balance all of these critical energy priorities is no longer open to debate given the energy threats we face.” 

The bill also includes $10 billion for an investment tax credit to build cleantech manufacturing plants that make electric vehicles, solar panels and wind turbines; $2 billion in grants to retool existing car factories; and $27 billion for a “clean energy technology accelerator.”  

Some climate advocates greeted news of the deal with cautious optimism. Fred Krupp, the president of Environmental Defense Fund, called the bill’s investments “an historic step by Congress to improve people’s lives,” adding that the package of tax credits “would rapidly accelerate our shift toward a modernized economy and make electric vehicles, clean power and clean manufacturing more affordable.” 

Others were worried that it would continue to prop up the fossil fuel industry, pointing to the fact that, as part of the deal, Democratic leadership has agreed to speed up the permit process for pipelines, along with other energy infrastructure, before the end of the fiscal year. “Streamlining permitting for natural gas pipelines and exports is not climate action, it is the opposite. More subsidies for dirty hydrogen, carbon capture, and nuclear energy are not climate action, they are the opposite,” said Wenonah Hauter, the executive director of Food & Water Watch.  

There may still be some hurdles in the way of the bill becoming law, such as centrist Democratic Senator Kyrsten Sinema, of Arizona, who hasn’t announced whether she’ll support the package yet. But Democrats won’t require the support of any Republicans for the bill, as they’re planning to use the budget reconciliation process, which can pass with 51 votes (including Vice President Kamala Harris’s tie-breaking vote). If Congress does pass the bill, supporters say it will be the single-biggest climate investment in the country’s history.  

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That isn’t to say there wasn’t progress last year. The conference’s British hosts trumpeted COP26 as a “step forward in global efforts to address climate change.” The summit resulted in some significant pledges by governments around deforestation and methane emissions, as well as by leading financial firms vowing to achieve net-zero in their portfolios by 2050. But as climate disasters escalated in 2021, many were left feeling frustrated that more wasn’t achieved through all the summit’s “blah-blah-blah.” 

“There is much that is good, some bad, some lacking and without a doubt lots still to do to build on in a deal which may yet prove to be a turning-point,” said Mark Campanale, executive chair of the London-based think tank Carbon Tracker in a post-summit statement. “That’s especially true if governments can return next year, and the next, with more ambitious emissions targets.”

At the end of the summit, Climate Action Tracker, an independent analysis that measures country emissions, found that even if leaders achieve all their 2030 and long-term targets, the world is still on track for 2.1°C of warming.

Bold climate action is looking uncertain for the world’s second largest climate polluter, as U.S. President Joe Biden’s Build Back Better bill stalled in late 2021. In December, coal-friendly West Virginia Senator Joe Manchin had delivered what appeared to be a death blow to the bill, telling a Fox News host that he would vote “no” on the US$1.75-trillion package. The bill had carved out a whopping $555 billion to combat climate change, including $300 billion in tax incentives and rebates for clean energy, electric vehicles and greener buildings. Even the United Mine Workers of America, which represents West Virginia’s coal miners, called on the senator to reconsider his opposition to the bill.

There is much that is good, some bad, some lacking and without a doubt lots still to do to build on in a deal which may yet prove to be a turning-point.

-Mark Campanale, executive chair of Carbon Tracker

In his first public comments about the bill in 2022, Manchin said no negotiations were happening at the time. He added, however, that “the climate thing is one that we probably can come to agreement much easier than anything else.” If the bill does survive, its scope likely will be far narrower than what was originally proposed.

There are signs that 2022 may be more constructive, at least in Canada, where Prime Minister Justin Trudeau issued mandate letters to his cabinet ministers in December that signalled an unprecedented government-wide effort to tackle the climate crisis. The letters underscored a more robust climate approach, including a zero-emissions-vehicle mandate, a 100% net-zero electricity grid by 2035 and mandatory climate-related financial disclosures for banks, pension funds and others.

Admittedly, Canada has been notorious for not following through on its carbon-trimming resolutions. But Canadian climate activists are hopeful that the government will be more active on the climate file in 2022, given Steven Guilbeault has been appointed to serve as the country’s new minister of environment and climate change. Guilbeault, who was once a director of Greenpeace Quebec, had a long to-do list in his mandate letter and is expected to unveil a new federal climate plan in March.   

Ten months from now, Egypt will host the 27th UN climate summit. Expect fossil fuels and climate injustice to be in the hot seat. The UN had billed COP26 as humanity’s “last best chance” to tackle the climate crisis. Let’s hope the political actions of 2022 will meet the ambitions of 2021.

The post What will climate ambition look like in 2022? appeared first on Corporate Knights.

After four years of Donald Trump’s coal and fracking cronies, U.S. environmental groups were elated that progressive, professional experts were taking back government.

Sure, there was a jolt of concern in mid-November when Biden appointed Louisiana Congressman Cedric Richmond as incoming director of the White House Office of Public Engagement, with special responsibility for climate issues and the pandemic. The 12-year congressman earned a reputation as a climate conservative, supporting fossil-fuel exports and offshore drilling while opposing efforts to tighten regulations on fracking and the disposal of toxic coal ash.

But Biden went on to make better choices. In December, he appointed former Environmental Protection Agency (EPA) administrator Gina McCarthy, a key architect of the Paris Agreement, to run a new White House office on climate change. As president of the Natural Resources Defense Council, McCarthy sued the Trump administration more than 100 times over its attempts to ease environmental regulations.

And then there’s Michael Regan, Biden’s popular pick as the new EPA head. Regan began his career as an air-quality specialist with the EPA. He then spent eight years at the Environmental Defense Fund, an advocacy organization best known for championing early bans on whaling, leaded gasoline and hazardous chemicals such as CFCs.

For the past four years, Regan was an activist secretary of the North Carolina Department of Environmental Quality. Inheriting a dispirited department that was defanged by a previous Republican administration (sound familiar?), Regan tightened regulations and signed significant mitigation deals with chemical and energy companies. “Michael Regan will be exactly the kind of administrator that the EPA needs to fix the damage that was done under four years of Trump and tackle the climate and health crisis facing Americans,” said Jeremy Symons, an environmental consultant who worked with Regan at Environmental Defense.

As the first Black person to run the EPA, Regan will also focus on environmental and economic justice. On his appointment he announced, “We will be driven by our convictions that every person in our great country has the right to clean air, clean water and a healthier life, no matter how much money they have in their pockets, the color of their skin or the community that they live in.”

Given the Trump-inspired insurrection at the Capitol on January 6, this message can’t can’t be emphasized enough. A divided America needs healing. A job-creating green revolution will boost the economy, put the U.S. on a more sustainable track and promote social justice.

Canadians accustomed to the Trudeau Liberals’ lukewarm embrace of climate policies have spent four years worrying about America’s rejection of the environmental crisis. Now, armed with a committed cabinet and an unexpected (albeit slim) majority in the Senate, the 78-year-old Biden may soon challenge Canada to keep up.

The post Biden sets new pace in climate race appeared first on Corporate Knights.

No one disputes that there will be vestigial demand for fossil fuels for decades to come. No one disputes that low oil prices would severely damage the oil sands. No one disputes that it will be decades before the transition to electrified transport is complete. But does the transition to EVs need to be complete before it contributes to chronically low oil prices? Importantly, what will the oil supply-demand balance look like later in this decade, and in future decades? Will prices be high enough to sustain one of the more expensive sources of oil? No one will dispute that someday EVs will threaten oil demand and thus prices.

Today, annual EV sales data are used to assess and dismiss the threat. Looking at annual sales data suggests the risk to the sector is years away – but that is looking at where the puck is, not where it will be.

Looking only at annual EV sales data means failing to recognize that once an EV enters service, it remains in use for a decade or more. Every fossil-fuelled vehicle displaced by an EV permanently removes oil demand for that vehicle. Cumulative EVs is the critical factor, not annual sales. Specifically, how many EVs are required to impact crude oil prices? And when might that occur? Is it decades into the future? Or is it imminent? How much does a small drop in oil demand affect price?

A 2% oil-supply surplus caused a 70% drop in oil prices between 2014 and 2015. That surplus was primarily due to Saudi Arabia flooding the market with crude oil. They are doing the same thing today, which, compounded by COVID-19, is causing acute problems. Electrification of transport is chronic, however, and its effect on oil prices will increase over time until a transition is virtually complete.

So how many EVs could cause a small oil-supply surplus? A report published by the Bowman Centre for Sustainable Energy suggests the answer: about 40 million EVs worldwide. And, disruptively, it could happen by mid-decade.

So, what to do?

First, we need to recognize the severity of problems facing the oil-producing provinces. Jobs are disappearing, and companies are under financial stress, leading to ripple effects across their economies and attendant social problems. These challenges are being imposed on Canada by global forces; our government leaders cannot change this global shift, regardless of political rhetoric.

Oil-producing provinces, the federal government and Canadians need to develop and implement a transition plan. An action plan designed for oil-sector workers and society at large. A plan that positions the oil sands as a resource that contributes to society and our economy as the 21^st century unfolds.

A detailed, equitable, data-driven and realistic transition plan will recognize the value of bitumen for non-fuel uses. In addition, such a plan will embrace electrification of transport as an opportunity. Visionary, courageous and cooperative leadership is required to drive technical and social solutions to ensure that the provinces, citizens and Canada build back better.

What happens if we are wrong? Nothing – there is no downside. Implementing a transition plan will create jobs and wealth in addition to those in a scenario where the oil sands prosper as in the past.

Ed Brost is a professional chemical engineer with over 35 years experience in the energy sector with Shell, Ontario Hydro and Atomic Energy of Canada. Ed is currently managing director of Innovation and Sustainable Development with Carbovate Development Corp. and volunteers his time as an associate with a non-profit, the Bowman Centre for Sustainable Energy.

The post Even our least electrifying politicians can’t stop what is coming appeared first on Corporate Knights.

A decent roadmap

If we look at the speech using a clean economy and caring lens, there were four essential lines. The commitment that “climate action will be a cornerstone of our plan to support and create a million jobs across the country” is a game-changing update to the government’s narrative around climate change. The related promises to support energy-efficient building retrofits and to launch a new fund to attract investments in zero-emission product manufacturing suggest that Canada may be on the way to having a clean industrial strategy.

In stating that “the government will make a significant, long-term, sustained investment to create a Canada-wide early-learning and child-care system,” the feds recognized that the majority of job losses (63 percent) caused by the pandemic-induced economic crisis have affected women, many of whom may not be able to return to the workforce without better child-care options.

The government’s intent to wave off the fiscal hawks and continue to dig deep to help us build back better was made clear when it noted that “this is not the time for austerity.”

The government further signaled it is serious about building back better by saying it would work with the provinces and territories to “make the largest investment in Canadian history in training for workers,” with the first item listed as “supporting Canadians as they build new skills in growing [read ‘green’] sectors.”

What was missing from the throne speech?

On the green recovery side (a package of investments and regulatory reforms to relaunch the economy on the back of green industries), there was a fair bit of detail on the new investment fund meant to support zero-emission vehicles and batteries – which will largely benefit central Canada. But there was scant mention of how to rev up the low-carbon resource sector in the West. This includes (in order of technology readiness): sustainable biofuels, hydrogen, and the potential bonanza of extracting carbon fibres from bitumen.

The immense potential for the farming and forestry sectors to contribute to climate solutions was given just one line, referring to “farmers, foresters, and ranchers as key partners in the fight against climate change, supporting their efforts to reduce emissions and build resilience.”

There was no mention of how to ensure that Canadians reap our fair share of capital gains and intellectual property rights in return for the billions of dollars of public investment about to be directed at the recovery. It would have been nice to see some indication of how the government plans to ensure that our pension funds get the inside track on these growth investment opportunities in Canadian enterprises. There was also a missed opportunity to lay down markers for more democratic ownership models, including provisions to encourage employee-owned businesses and co-ops.

The next economic update and a nation building strategy

Now is the time for the federal government to go “all in” for a caring economy and a green recovery by using its fiscal power and monetary sovereignty to make the investments that will expand, mobilize and redeploy our productive capacity for building the Canada we want and the Canada we need for the 21st century.

On a long-term basis, we are going to invest an additional 0.5 percent of GDP into the caring economy to make affordable and quality child care and elder care a universal reality. And over the next five years, to ensure that Canada plays to its full potential in seizing clean-growth markets, we will invest an additional one percent of GDP per year to build up the clean economy.

How are we going to pay for it? We can issue bonds today that will be directed at investments in affordable child care, long-term care for seniors and a green recovery, and we can afford to do it without raising tax rates. We can do this because these programs stimulate economic activity that will generate future government tax revenue that will be greater than the interest on the bonds.

Here’s how it works: affordable child care creates jobs to deal with the “she-cession” and boosts labour force participation overall, which in turn fuels higher growth and tax revenues. A child care program (building on lessons learned from the Quebec model) would require additional federal investment of $80 billion over the next 10 years. On an annual basis, we estimate this investment would represent 0.35 percent of GDP (assuming 50-50 cost-sharing with provinces and territories). That expenditure in turn would be offset by higher economic growth – by reducing the gender workforce gap, GDP would go up a corresponding 2.4 percent by our estimates (based on an IMF paper extrapolating from the Quebec child care experience). This would represent an increase in federal revenues of $8.3 billion per year (or 0.36 percent of GDP, using the 15 percent federal revenue-to-GDP ratio).

Securing dignified long-term care as an element of universal health care almost certainly requires setting up a national long-term-care insurance program, with a strong community and home care component, according to the National Institute of Aging. Setting this up will likely require significant federal government contributions in the order of an additional 0.25 percent of GDP, assuming a matching contribution by provinces and territories. Together, this would raise Canada’s spending on publicly funded long-term care from 1.3 to 1.8 percent of GDP, in line with our OECD peers, and take some of the load off the 35 percent of Canadians who balance paid work with unpaid caregiving.

The federal contribution would be offset by higher levels of GDP. Corporate Knights estimates that GDP would rise by one percent, by factoring in a 35 percent productivity boost among the Canadians who currently balance paid work with unpaid caregiving, plus the economic boost associated with creating the new long-term care spaces, as estimated by the Conference Board of Canada. Savings in the order of 0.12 percent of GDP would arise from the hospital beds freed up through increased provision of long-term-care spaces and in-home-care support services, which are 80 percent more cost-effective.

Meanwhile, the government could support technological innovations and attract large-scale private investment into clean-growth areas that align with Canada’s strengths by issuing low-cost, long-dated sovereign bonds (issued now to lock in low interest rates). The European Union has a similar system. Corporate Knights economists estimate this would create a new engine of growth based on boosting the growth of clean industries, raising Canada’s 2030 GDP levels between five and 10 percent. At seven percent GDP growth, federal tax revenues would increase by 1.1 percent of GDP, enabling us to manage our sovereign debt loads and sustain a clean and caring economy over the coming decades.

Table:

Sources: Corporate Knights estimate based on Building Back Better Synthesis Report, Canadian Institute for Health Information, Caregiving and Care Receiving by Statistics Canada, Conference Board, Finance Canada, IMF, National Institute on Ageing, RBC Economics, Scotiabank Economics.

Investing in a caring and green recovery will expand, mobilize and redeploy Canada’s productive capacity, enabling us to manage the sovereign debt and sustain a clean and caring economy over the coming decades.

Toby Heaps is the co-founder and CEO of Corporate Knights.

Céline Bak is the president and founder of Analytica Advisors.

Ralph Torrie is the president of Torrie Smith Associates, and a senior associate with the Sustainability Solution Group.

This article was originally published by Policy Options.

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“It’s not just a case of sticking a whole bunch of shovels into the ground,” said Don Drummond (Queen’s University) . “We need a new mechanism and new sources of growth in Canada. The traditional sources aren’t working.”

The panel featured:

Ambassador Sabine Sparwasser (Germany), Ambassador Kareen Rispal (France), Don Drummond (Stauffer-Dunning Fellow & Adjunct Professor, School of Policy Studies, Queen’s University, Canada), Rainer Agster (Executive Board Member, Adelphi, Germany), Richard Florizone (President & CEO, International Institute for Sustainable Development, Canada), Sanda Ojiambo (CEO & Executive Director, UN Global Compact), Claire Tutenuit (Déléguée Générale, Entreprises pour l’Environnement, France).

To watch the full recording of the roundtable, head to CKTV.

See our recent coverage of the EU budget deal for a taste of the discussion, as well as Shawn McCarthy’s piece explaining the consequences of building back to business as usual.

About this series

In the spirit of globalizing a green recovery, Building Back Better Together explores key insights for how the international community can build back better post-COVID. The roundtables bring together Canadian, German and other European experts, policy-makers and business leaders to exchange insights from the current crisis to spark a global green recovery. 

This virtual series takes place under the banner of Ottawa Climate Talks, initiated by the German Embassy, which have explored climate-related topics since 2015. 

Our goal: To inspire Canadian and European decision-makers to seize this opportunity to Build Back Better Together.

These roundtables are aimed at policy-makers, business leaders, investors and civil society members from around the world, with a strong Canadian and European contingent. Each session will be preceded by a table-setting backgrounder by Shawn McCarthy, shared with registered participants in advance of the roundtable. The discussion will be international in breadth, with focused learning to support action across borders.

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In advance of this week’s throne speech, a coalition of grassroots groups has launched the first Canadian bill that shows a $20 bill’s long-term value if the federal government invests in a green recovery.

Recent calculations made by economists at Corporate Knights found that for every $20 invested in a green and just recovery, $307.85 would be contributed to Canada’s GDP over the next 10 years. This figure was calculated by factoring $125 in direct investments by the private sector and other governments, as well as multiplier and indirect benefits.

The Green New Bill campaign talks up the potential value if the to-be-announced recovery package is invested in a green future, in particular on those low-carbon Canadian assets best aligned with global growth trends. Canadians are being invited to explore the $307.85 bill to learn more about the real socioeconomic impacts of a green recovery, from job creation to lowering global emissions to saving money on our energy bills.

Ralph Torrie, senior associate with Sustainability Solutions Group, said in a statement, “We can lay down a foundation for wealth creation, create a huge number of jobs [and] put Canada on a pathway to being carbon free by 2050 while restoring and supporting nature in the process. It’s a once-in-a-lifetime opportunity to make the changes that are necessary to get on the road to an economic and environmental recovery.”

The Green New Bill is an educative initiative informed by a coalition of grassroots groups, including the Green Budget Coalition, the Strathmere Group, CAN-Rac, Corporate Knights and the Task Force for a Resilient Recovery, led by the David Suzuki Foundation. The campaign figures are based on Corporate Knights’ Building Back Better strategy, which includes a $40 billion federal fund for research, development and deployment of breakthrough technologies to unlock billions of dollars of value from zero-carbon commodities, electric vehicles and batteries, non-energy applications of petroleum resources such as lightweight carbon fibres, and other innovations where Canada has the ingredients to succeed in globally competitive markets.

The fund would crowd in $105 billion of private capital while focusing on ensuring that all Canadians benefit from the intellectual property generated. The prize for getting this right? Canada gets to be the supplier of choice for $125 billion of zero-carbon commodities annually by 2030 while creating 1,000,000 person-years of employment.

Here’s how the plan breaks down 

Greening homes and workplaces: $3.80 yields $130 in GDP impact

With every $3.80 invested in greening Canadian buildings forecasted to yield $130 in GDP within a decade, investing in residential- and commercial-building retrofits and electrification is considered the most effective – and quickest – way to stimulate economic recovery, create jobs and facilitate emission reductions. That explains why doing so tops the agenda of most post-pandemic recovery strategies. By 2030, deep retrofits of 60% of Canadian homes and buildings will reduce our annual GHG emissions by 57 megatonnes and create more than three million person-years of employment.

Federal retrofit investing could provide grants and low-interest loans to jumpstart a nationwide campaign to upgrade the efficiency, comfort and quality of all types of homes and workplaces. The campaign hopes that the federal government will also finance workforce training and innovation in new business and financial models to reduce the costs of mass retrofits, as well as contribute to auditing and planning costs. Torrie says building heating/cooling and electricity savings of more than $20 billion per year will recoup the investment.

Greening the grid: $1.23 invested, $52.38 in GDP impact

The transition to a low-carbon future necessarily includes a massive shift to electricity for vehicles and buildings while at the same time ensuring that the electricity supply is carbon-free. Decarbonizing the grid in Canada will require $129 billion in investments that would generate more than 900,000 person-years of employment over the next 10 years and slash 75 million tonnes of greenhouse gas emissions. For every $1.23 invested in greening the grid, the GDP impact would be $52.38.

Federal spending would be highly leveraged in this sector, with the government taking a leadership role in the promotion of interprovincial trade in electricity. The key will be to focus on financing the construction of new transmission capacity between provinces that have a surplus of carbon-free electricity and those still dependent on fossil fuel generation. In provinces with high solar and wind potential, the federal government can speed the transition to a carbon-free grid by investing in renewable electricity and utility-level storage, for example by buying the emission reductions at the going carbon price. Torrie estimates that fuel and electricity savings of more than $24 billion per year will recoup the investment.

Among its many benefits, the Green New Bill will help reset relationships with Indigenous communities, says Torrie. “The decentralized and renewable technologies that comprise the emerging energy system are lighter on the land, lend themselves more readily to Indigenous community ownership and employment, and facilitate a real commitment to the standard of free, prior and informed consent.”

Supporting the electric vehicle revolution: $2.57 invested, $44.41 in GDP impact

Electric vehicles already have a lower total cost of ownership than gas-powered cars, but the initial cost and a lack of charging stations are barriers to uptake. In this plan, EVs make up more than 40% of all the cars and trucks on the road by 2030. Government spending in this area is focused on building the charging infrastructure in homes, communities and all along the Trans-Canada Highway, as well as on providing incentives for early adopters of electric vehicles, including buyers of trucks, school buses and transit buses. In addition, $370 million of the $2.57 billion would go to the construction of 2,000 kilometres of new bike and pedestrian rights-of-way. All totalled, the EV and active transportation transition are expected to generate more than 800,000 person-years of employment by 2030 and reduce GHG emissions by 66 million tonnes per year.

Nature-based solutions: $4.05 invested, $8.51 in GDP impact

Specific initiatives in this area include planting 10 billion trees, sequestering carbon by converting marginal agricultural land, and reducing the use of nitrogen fertilizer on Canadian farmland. These short-term measures will require $22 billion in federal investment, create 160,000 person-years of employment and reduce annual GHG emissions by 35 million tonnes. Complementary policies to protect at least 25% of Canada’s land and oceans and to encourage sustainable agriculture and forestry will ensure that these sectors continue their time-honoured contribution to Canadian prosperity.

Supporting Canadian innovations: $7.46 invested, $56.27 in GDP impact

The Build Back Better strategy includes a $40 billion federal fund for research, development and deployment of breakthrough technologies for zero-carbon commodities, batteries, electric vehicles, non-energy applications of petroleum resources, and other innovations where Canadian firms can succeed in globally competitive markets. The fund would crowd in $105 billion of private capital while ensuring that all Canadians benefit from the intellectual property generated. The prize for getting this right is for Canada to be the supplier of choice for the $125 billion zero-carbon annual commodities market by 2030 while creating one million person-years of employment.

Greening heavy industry: $0.88 invested, $16.17 in GDP impact

Green public procurement policies that include a premium of $100/tonne of GHG avoided for low-carbon steel and cement would give these industries the incentive they need to invest in new low-carbon production technologies. A $480-million-per-year program of subsidies for the development and deployment of low-carbon production processes in these industries could unlock the $3.7 billion of private capital investment per year they need for decarbonization. Complementary policies for the industrial sector include incentives for electrification and for zero-waste technologies and processes. These initiatives generate more than 234,000 person-years of employment and GHG emission reductions of eight million tonnes per year.

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