Policy & Positions Manual
Provincial Issues - Environment
Economic and Environmental Sustainability for Business (2009)
Sustainable development is often thought to have three components: environment, society and economy. This is referred to as the “triple bottom line”. For today’s businesses, industries and institutions to be economically sustainable it is prudent that they consider the environment and society.
At the 2009 BC Economic Summit in Vancouver, speakers from every sector spoke of the inevitability of business, society and the future economy being determined by sound environmental commitments. It was stated that clean technology could drive the economy for the next 30 years.
In order to move to an environmentally sustainable marketplace it is important to allow the market to tell the ecological truth by including the environmental costs to doing business. The main conclusions in the Stern Review on the Economics of Climate Change are that 1% of global Gross Domestic Product (GDP) per annum is required to be invested in order to avoid the worst effects of climate change, and that failure to do so could risk global GDP being up to twenty percent lower than it otherwise might be. The report suggests that climate change threatens to be the greatest, and widest-ranging, market failure ever seen, and it provides prescriptions including environmental taxes to minimize economic and social disruptions. In June 2008, these projections were increased to estimate that 2% of GDP is now required to account for faster than expected climate change.
At the World Future Energy Summit in Abu Dhabi in 2009, Kevin Parker, head of asset management for the Deutsche Bank said, “the world needs investments of up to $45 trillion by 2050 in alternative energy to balance hydrocarbons and renewables in its overall energy mix.” He also went on to state that, "governments need to stimulate investment in clean energy through long-term policy initiatives."
Parker said Deutsche Bank has currently $650 billion of assets under management, of which one per cent, or $6.5 billion, of assets are under management in climate change.
One way BC could begin to commit to our future economy is through Ecological Fiscal Reform (EFR) policies. These policies are being used all over the world and involve using financial incentives to achieve sustainability goals.
One example of EFR is a tax shift. These tax shifts are designed so that prices in the marketplace better reflect the environmental cost of production. This is accomplished by reducing taxes on products and services that protect the health of British Columbians and the environment, while increasing taxes on polluting activities. This kind of EFR is being used in Europe with great success, and could help make BC’s economy cleaner and more environmentally sustainable.
The Federal Government has identified sustainable development as an important economic direction for today’s businesses, industries and institutions. In 1995, the Government of Canada started the Canadian Environmental Assessment Agency and established the Commissioner of the Environment and Sustainable Development within the Office of the Auditor General.
Amendments to the Auditor General Act require Ministers to prepare “Sustainable Development Strategies” that outline their departments' objectives and plans for action to further sustainable development, and that they update these strategies at least once every three years. That same year, the Federal Government also released A Guide to Green Government, which firmly states its belief that Canada's economic health depends on its environmental health.
As the world responds to the environmental challenges in the early 21st century, those who anticipate and prevent environmental degradation could lead the way in developing new economic opportunities. Globally, Canada has retained one of the strongest economies of the G7 countries, within which BC has the benefits of a diversified economy plus a window to the world during the 2010 Olympics. This presents BC with more opportunities to recover economically than other regions worldwide and presents prime conditions to lead the way in how to do so.
THE CHAMBER RECOMMENDS:
That the Provincial Government work in co-operation with the Federal Government to:
- develop financial incentives to induce businesses to make environmental sustainability goals;
- create long-term policy initiatives to stimulate investment in alternative energy solutions; and
- calculate the environmental cost of doing business in all sectors and develop economically viable solutions for business to make environmentally sustainable choices.
