Thursday, August 6, 2009

How Green was my stimulus? (Not very)

(Written for "Root Issues" in the Barrie Examiner:

After more than a year of economic bad news, it seems the worst may be over. Some are even saying the recession is past, although somehow that means job losses will continue for a while yet. Apparently the much-debated economic stimulus did its work. Or did it?

If the economy is like a moving car, then a recession is like the engine stalling, and government stimulus a jump-start to get it running again. The problem is, when your engine dies, it is a sign of something seriously wrong -- something that should be fixed lest it break down again. To re-start your car and just hope for the best isn't very prudent -- yet that's precisely what our governments have done.

Of course, our economy isn't just like a car on the road, it's more like a car in a race -- against the other nations competing in global markets. The global recession was a shared pit stop. The big difference is how the other teams -- other governments -- responded. Rather than replace failing tires with another set from the same stack like us, they've been rapidly upgrading to newer, better equipment. As the race resumes, we'll fall further and further behind in our obsolete jalopy.

HSBC published a study in the Financial Times analyzing how much of each nation's stimulus spending was "green" -- directed to improving energy efficiency, reducing emissions, going renewable, boosting transit, etc. The Obama budget to our south dedicated 12 per cent. Germany put in 13 per cent, France 21 per cent, and powerhouse China a whole 38 per cent -- more than a third of their stimulus.

Yet even they were exceeded by the European Union at 59 per cent and South Korea at a whopping 81 per cent green stimulus. Japan's share seems low at three per cent, but they have already spent decades crafting one of the most energy-efficient, low-emission economies in the developed world.

Where does Canada's stimulus fall on this curve? Down with the laggards, at a measly eight per cent. Not even one tenth of our massive dive into deficit and debt went into greening our economy. And of even that little spending, much targeted measures of dubious long-term benefit: more money for the nuclear money-pit of AECL and subsidies to help obscenely profitable fossil fuel companies try to capture and store a fraction of their CO2.

In Ontario, we have spurned both environmental and economic common sense in bailing out the worst performers.

By market capitalization, Toyota and Honda are the world's largest automakers, each by itself more than the size of Ford, Chrysler, and GM combined. They also have the highest fleet fuel efficiencies - far better than GM or Ford. The market has clearly spoken: the most efficient companies are sought after, while guzzler-makers are dropped. Yet we taxpayers are now proud owners of the worst, a company which actually promises fewer jobs in Ontario over the next decade. Premier Dalton McGuinty even promises huge grants to buyers of more Detroit steel, provided it's the untested Chevy Volt.

When it comes to energy inefficiency, Canada is a world leader. Of developed nations, none use more energy than us to produce a dollar of income. Even neighbouring New York state produces twice as many dollars per unit of energy as Ontario. We are gold-medal energy-wasters, not a title we should happily accept.

There is still time, as the world crawls out of the recession, to retool our economic race car to challenge the best, but time is swiftly running out. Specific numbers are hard to predict, but there is little doubt resurgent demand will soon pull oil above $100 per barrel, and likely $200 before the decade ends. Are we ready for this? Can your lifestyle handle $3 a litre gasoline? How about $4? How will your business cope when electricity prices double and oil quadruples? Will your job or pension be safe?

Keep in mind that Japan and the EU -- and even the U. S. -- will be able to produce the same good or service with half or less the expensive energy -- passing their savings on to their global customers. These are the people who used to be our customers.

Word to the wise (and our leaders): Never waste a good crisis.

Erich Jacoby-Hawkins is a teacher, father, volunteer, and politician.

Update: Reuters today has a story that shows how Canada's lack of green stimulus is not only preventing us from keeping up, it is putting us even further behind as green industry is drawn south to Obamaland:

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