On the path to recovery: how to “lock in” climate solutions

This time last month, TAF and many other climate advocates were calling on the federal government to activate their campaign commitments for climate action in the 2020 budget. What a difference a month can make.  

Since then the global COVID-19 crisis has governments scrambling to avert the worst effects, including complete economic meltdown. The Canadian government has responded swiftly with an unprecedented $107 billion in economic stimulus, geared to bridge vulnerable households and businesses through the immediate emergency. This support is of course the priority. But it is only a down payment.   

Once the pandemic is under control, Canada and most of the world will be facing a second crisis – the deepest recession in modern history. Another record-breaking stimulus package will be needed to snap the country out of its medically induced economic coma. There are many opinions about how to structure the economic recovery package, and many include bold climate action. In fact, the decisions we make about how to put this country back to work will define the shape and contours of Canada’s economy for many years to come.  

We want to see a climate stimulus package that’s ready to press go, that puts people first, and that gets Canadians back on their feet as quickly as possible, working for the green economy.  

These recommendations are ready to spring into action: 

1. Public funds for public benefit. 

It is important that all levels of government place conditions on bailouts for companies to spur job creation and benefit the whole economy, not executives and shareholders.  We need those funds to clean up polluting industries and accelerate the low-carbon reality. These industries were on a downward spiral before COVID-19. The oil and gas sector is facing long-term structural challenges and any stimulus funds it receives must have stringent conditions to focus the recovery on workers first, and to speed up industry decarbonization and diversification as we deal with historically low international oil prices.   

2.  Lock in long term value.  

To get Canadians back to work quickly, speed our economic recovery, and keep markets more resilient in the long term, we must stay firm in our commitments to climate action.  In 2019 Canadians made history by voting for multiple parties with climate action central to their platforms because we share a vision where the economy and the environment are not a crossroads.  Post-pandemic, we have a pathway to economic recovery that also meets the priorities of our Paris agreement and the pan-Canadian framework. Proven solutions, such as manufacturing zero-emission vehicles and large-scale rollout of energy efficiency and renewable energy set a roadmap for deep carbon reduction and clean growth.   

3. Get a head-start.  

Speed is one of the critical elements to any economic stimulus program. But new programs and big green infrastructure projects usually require months or years of planning and approvals. While these are under development, we can get a head start by focusing on the plentiful small and mid-size project opportunities like retrofits and distributed renewables, and taking advantage of existing funding programs that can be rapidly expanded. Fortunately, the federal government has a multitude of climate funding programs which could be boosted to get money into the economy quickly and productively, while reducing carbon. For example:  

• The Zero Emissions Vehicle Infrastructure Program provides $26 million a year to fund deployment of EV charging stations across Canada. With minor tweaks, the program could easily be scaled up to create a national charging network. This would immediately spur innovation, manufacturing, and sales of electric vehicles, ultimately benefitting Canadian households for decades to come. 

• The Climate Action Incentive Fund provides about $200 million annually to support climate projects like retrofits and renewable energy in provinces subject to the federal carbon pricing backstop. The program could be extended to all provinces, and the budget could be expanded to $1 billion or more. If implemented our schools and businesses would receive massive funds to invest in their facilities, improving productivity, health and comfort while directly stimulating local employment for tradespeople, architects, engineers, and manufacturers.  

• The Accelerated Investment Incentive provides tax incentives for qualifying renewable energy projects. Extending the same tax treatment to qualifying energy efficiency investments – like heat pumps or major building envelope upgrades – would spur demand for deep energy retrofits. Furthermore, major energy retrofit projects are highly labour intensive, and the work is inherently local. The energy efficiency sector already employed an estimated 436,000 Canadians in 2018, and will add at least 118,000 more jobs by remaining committed to Canada’s Paris targets.  

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Due to COVID-19, the 2020 budget is postponed indefinitely, along with just about every other government initiative not related to the global pandemic. Our focus is turned overwhelmingly towards mitigating the virus – as it should be.  However, once the current crisis is stabilized the government will shift its focus to the next phase of fiscal solutions.  

A smart, green stimulus package will feed two birds with one scone – boosting the economy while scaling up low carbon solutions. After all, if we are going to add hundreds of billions to the national debt, shouldn’t we be investing it in a stronger, healthier and more resilient future? 

A note about the TAF community 

We are still working hard on low-carbon solutions from our home offices, doing our best to flatten the curve. Amidst the ongoing fear and uncertainty, we are leaning on what we do best – following the carbon, working in collaboration with our community, and focusing on positive, proven solutions. We are still running our impact investing and grants programs. The relatively good news is that our endowment avoided some impact by not holding any fossil fuel companies.

The “new normal” for us involves video conferencing and Slack messages. Look for #virtualTAF on Twitter for uplifting content and to keep up with our webinars and newsletters. Above all, we wish our friends and colleagues a healthy and safe recovery in these trying times.  

Photo by Christopher Burns on Unsplash