Had things worked out differently, the Liberal government’s post-election agenda might have started to take shape this spring with a budget focused on addressing climate change.
That might seem like a missed opportunity now. But responding to an economic crisis brought on by a global pandemic is presenting the government with new opportunities to combat climate change — and the Liberals might be judged by how well they seize this moment.
Had there been a budget this spring, it likely would have included some mention of at least two initiatives that are now part of the government’s pandemic response: orphan well cleanup and climate-related financial disclosure.
With Alberta’s economy already in dire need of assistance, federal aid for the work of cleaning up abandoned oil and gas wells was under consideration before COVID-19 and a steep drop in oil prices did deeper damage in March. To address all of those challenges, the Liberals announced $1.7 billion in funding for wells in April as part of a relief package that also included new assistance to help firms reduce carbon emissions.
Environmentalists seemed to approve. So did Alberta Premier Jason Kenney. But demands for more help persisted.
When the Trudeau government announced this week a program to provide loans to large and medium-sized employers (including oil and gas producers), it said that any borrowing would come with conditions — including a requirement to “publish annual climate-related disclosure reports … including how their future operations will support environmental sustainability and national climate goals.”
Proponents of climate disclosure — among them Mark Carney, former governor of the Bank of Canada — have called on firms to publicly account for how their business will be affected in future by both government policies to reduce emissions and the actual impacts of climate change. In theory, such disclosures would push investors to push companies to make environmentally sound decisions.
In 2015, the Financial Stability Board, an international body established by the G20, launched a task force on climate disclosure chaired by Michael Bloomberg, the former mayor of New York City. That task force came back with recommendations in 2017. Last June, the Liberal government’s own expert panel on “sustainable finance” — chaired by Tiff Macklem, recently appointed governor of the Bank of Canada — advised the government to “define and pursue a Canadian approach to implementing” those recommendations.
Putting a green spin on corporate aid
Many companies already provide some level of climate disclosure — a study by the Chartered Professional Accountants of Canada in 2019 found that 98 per cent of firms included some degree of disclosure in their financial filings. But just one company in the CPA survey was meeting the task force’s proposed standards.
This week’s announcement might help kick-start that change.
Attaching such a condition no doubt also makes it easier politically to sell the pandemic loans policy to voters leery of using public funds to support large corporations, particularly oil and gas producers.
But the Liberals are promising to apply other conditions related to things like executive pay, collective bargaining agreements and dividends. Such things might seem like simple due diligence when dispersing public funds, but climate change also now seems to qualify as a fundamental consideration.
‘Accelerating the shift’
The Liberals should consider taking advantage of other opportunities to push for change, said Stewart Elgie, founder and chair of the Smart Prosperity Institute.
“Climate disclosure is one good way of accelerating the shift to a climate-smart economy,” he said. “They should also be looking for ways to tie economic relief to improved environmental performance.”
As an example, Elgie cites the bailout of the North American automotive industry in 2009, which President Barack Obama’s administration in the United States used to push for higher fuel efficiency standards.
The result was an industry that is arguably both more competitive and more environmentally friendly.
A ‘green recovery’
As the extent of the economic damage caused by COVID-19 has become clear, there have been calls to pursue a “green recovery” — for governments to focus their rebuilding efforts and economic stimulus on combating climate change. That remains the single largest opportunity here for driving some much-needed changes.
But it’s also not clear yet when governments will be able to start pursuing recovery plans. Canada is still in the emergency phase, and individuals and businesses need aid to get through the current crisis.
Even in the short-term, though, there will be chances to to deal with the climate threat — which will still be with us once the pandemic has passed.
In a recent white paper, policy analysts and consultants Ralph Torrie and Celine Bak proposed a $2 billion fund to help cities establish “permanent corridors … for people walking and cycling to work and school, while maintaining physical distancing.” In the midst of a pandemic, such routes would give some people safer ways to get around. In the long term, maintaining those corridors would promote environmentally friendly transit.
Brendan Haley, policy director at Efficiency Canada, has suggested that efforts to increase the energy efficiency of homes and business can still be pursued during a time of physical distancing — such as online training for “green building skills” and virtual energy assessments.
Haley also emphasizes the need to plan now so that governments and businesses can be ready to move when it’s time to start implementing a recovery plan. Elgie also notes that updated building codes — currently being developed by the National Research Council — could help frame future stimulus spending on housing.
The Liberals also promised last fall to develop climate change accountability legislation that would set legally binding targets and establish third-party oversight — a promise that shouldn’t necessarily be sidelined by a pandemic.
Though COVID-19 clearly has become a historic crisis, the Liberals are still faced with a political and moral imperative to deal with climate change. Justin Trudeau’s government might be defined by how it handles this virus and its effects, but it’s unlikely to be excused, either by its supporters or by historians, if the threat to the planet is forgotten in the process.
Setting aside budget plans might have been necessary. But 2050 — the year when Canada is supposed to reach net-zero emissions — isn’t getting any further away.