Joe Oliver was asked during QP yesterday whether he "believed" in Global Warming, and seemed to suggest that it was all a matter of theology. Not good.
MERX is Canada's electronic tendering service. Among other things, its where the gov. goes to hire scientists to think on behalf of the nation. A glance there sometimes can give you an idea of what the Harper government really believes about the scientific issues of the day.
In order to position itself to be competitive in an increasingly carbon-constrained global economy, Canada needs to reduce the overall carbon-intensity of its economy. This does not necessarily, at least in the short-term, suggest a shift from the resource-intensive production (e.g. oil and gas production, mining, etc.) on which Canada’s economy is currently heavily reliant for growth. It does suggest that these sectors need to become as carbon-efficient as possible, and that the power generation, transportation and building sectors which support both industry and society more broadly need to become more efficient from an energy and greenhouse gas emissions perspective and less reliant on GHG-intensive energy sources. These changes – some incremental (e.g. more energy-efficient buildings) and some potentially transformative (e.g. electric vehicles, distributed renewable energy) will require significant investment from both public and private sources.
(Note: the phrase "at least in the short term" is interesting here. It suggests that the folks at the folks at the National Round Table on the Environment and the Economy understand Canada's role as a hewer of wood & carrier of water for the rest of the planet must eventually come to an end.)
It is important for both describing the transition to a more carbon-constrained economy and assessing the most efficient and effective path for Canada in this transition to understand the required investment – both in terms of its magnitude and the sectors in which it is required.
It is also essential to understand the implications of delayed investment with respect to the level of investment required to achieve the desired outcome. The level of investment in low-carbon technologies and approaches is greatly influenced by public policy. Lacking policy-certainty (and indirectly market certainty) with respect to the intent to reduce the carbon-intensity of the economy, investments in capital stock and infrastructure are likely to either be delayed, or give minimal consideration to GHG-related factors. This may result in the installation of capital stock / technology and infrastructure that is not optimal. Once constructed or installed, the costs associated with modifying or changing the infrastructure or capital stock are typically significantly greater than the incremental cost of alternatives at the outset. Completely changing the infrastructure / capital stock would result in stranded assets – sunken investments which have not had the opportunity to realize their full potential return. Thus sub-optimal stock and/or infrastructure may be “locked-in” as a function of delayed public policy action.
It is perhaps marginally encouraging to know that remarks like Oliver's are meant to delude the government's political base, rather than the government itself.