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OTTAWA — Conventional wisdom suggests a big fossil fuel-producer like Canada can’t be both green and prosperous. It’s one or the other. Norway’s experience suggests this is a false choice.
Through a combination of steep carbon taxes, careful management of its oil wealth and strategic investments in innovation, oil-rich Norway has found a comfortable balance between the environment and growth.
It’s a lesson Canadians should take to heart in the wake of a stark new warning from the United Nations’ Intergovernmental Panel on Climate Change that the planet is headed for destructive and irreversible climate change without dramatic carbon emission cuts.
Forget Dutch disease. Canadians should embrace the Norwegian antidote. Compared to Canada, Norway’s economy is more competitive, scores better on a range of innovation performance measures and consistently produces higher per capita gross domestic product, and incomes.
And it’s greener, too.
“Norway’s performance on environmental productivity indicators suggests that it is possible for resource-rich countries to generate strong economic growth with lower environmental damage and depletion of natural assets,” according to a report issued last week by Canada’s Ecofiscal Commission, made up of leading Canadian economists and prominent former political leaders, including Preston Manning and Bob Rae.
The commission makes the case that sound environmental solutions don’t have to come at a punishing economic cost. Governments in Canada could raise billions of dollars a year by taxing carbon emissions and other forms of pollution, while cutting economically stifling taxes on labour and income.
On a relatively small scale, British Columbia’s six-year-old carbon tax proves that it’s possible to discourage fuel consumption and provide offsetting tax breaks without wrecking the economy.
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