The December 2015 Paris climate negotiations attracted over 150 heads of state, 20,000 government officials, 9,000 observers and almost 4,000 members of the media. Governments and civil society alike have hailed the agreement as a major breakthrough in the global effort to avoid catastrophic climate change. Among the key outcomes from Paris are the following:

• A collective goal of keeping global average temperature increases well below 2 degrees, and to strive to limit increases to 1.5 degrees.
• Agreement that all countries need to act, and that developed countries need to continue to lead through unilateral commitments that need to become more ambitious every five years
• Recognition that by the second half of the century, humans collectively cannot emit any more greenhouse gases (GHG) than we take out of the atmosphere (referred to as GHG neutrality)

For the most developed countries, including Canada, this means we have about 25 to 35 years to become GHG neutral. Opportunities to extract GHG from the atmosphere are currently limited, uncertain, and expensive. Comparatively, many opportunities to reduce GHG emissions are already cost effective, and based on proven technologies. On both fronts, the Paris Agreement signals a new era of economic opportunities that will pre-occupy the global community for the next few decades. Canada will be challenged to transition its energy, transportation and building infrastructure to prepare for GHG neutrality, and to transition its economy toward industries that are contributing to the transition, and that will thrive in a GHG neutral world.

Over the past 10 years, Nova Scotia has taken important steps to prepare for this future. While the federal government has been largely absent from effective climate policy until very recently, Nova Scotia, along with some other provinces, has quietly taken important steps to reduce its GHG emissions, particularly in the electricity sector.  This sector has been, and continues to be among the “low hanging fruit” for Nova Scotia in its efforts to reduce GHG emissions. Nova Scotia was the first province to introduce legally binding limits on GHG emissions from electricity production. Our 40% renewable energy target is leading the country. Our approach to energy efficiency through an independent agency has served as an example to other jurisdictions, as is Nova Scotia’s effort under the Environmental Goals and Sustainable Prosperity Act to integrate environmental protection and economic prosperity. All these initiatives will require ongoing commitment and adjustment to ensure they continue to contribute to the transition to GHG neutrality, but they are important elements for NS to build on, and they put NS in a good position to benefit economically from this transition.

The key for us is to recognise that the era of free GHG emissions is over, and that those who cannot eliminate their GHG emissions will have to pay an ever increasing price for those emissions, threatening the economic viability of industries that cannot become GHG neutral, and offering new opportunities for business that can thrive in a GHG emission neutral world. Smart governments and businesses in Nova Scotia will recognise this new reality. An important step will be to avoid investments that will become stranded assets in a GHG neutral world, such as:

• Buildings that use more energy than necessary, when relatively modest additional up front investments can already approach GHG neutrality in the operation of some new buildings
• Subdivisions that are inaccessible to public transportation, making their future viability dependent on solving the private transport challenge
• Subdivisions and buildings that are not designed to be able to take full advantage of renewable energies, such as passive and active solar, and geothermal energy, reducing options for homeowners to reach GHG neutrality in the future.
• Infrastructure that is significantly dependent on fossil fuels.

It will be critical for Nova Scotia to go beyond the regulation of emissions to encourage economic development that is linked to the global transition to GHG neutrality. Nova Scotia will need to reduce its economic dependence on parts of our economy that are not likely to thrive in a GHG neutral world. We would do well to support and encourage carbon pricing as a way to help fund the transition to GHG neutrality, and to reduce other taxes, such as income and small business taxes, so that we can grow the industries and businesses that will be part of the solution.

It will be important for Nova Scotia to approach the upcoming federal provincial negotiations on climate change with a stated desire to continue to lead and do more, though conditional federal support with the transition to GHG neutrality. This seems the best recipe for getting federal help to strengthen our economy through this transition to a GHG neutral world. If we don’t, we risk being drowned out by bigger provinces and we stand to lose out with an increasingly antiquated economy that will be bogged down by the rising cost of our GHG emissions.

The message to Nova Scotian businesses is clear, minimize the risk to future viability that GHG emissions represent, and pursue economic opportunities associated with the transition to GHG neutrality. Energy efficiency will continue to be a critical immediate step, as will be the management of energy needs in line with the availability of some renewable sources, such as wind, solar, and tidal energy. Avoidance of stranded assets, and full recognition of the inevitability of the transition and its timeframe of 25 to 35 years in business planning will also be key.

Businesses will need help from all levels of government, through predictable regulations and incentives that reward those that are leading this transition. Nova Scotia in particular needs to take steps to diversity its economy to make it less dependent on sectors that will not thrive through this transition. We need to look for opportunities to export GHG neutrality solutions, including the export of energy, and knowledge gained in key sectors, such as agriculture, buildings, and transportation. We need to look for ways to make NS an attractive place for the industries of the future.

So where are the opportunities for Nova Scotia? Answering this question will require the engagement of experts from a broad range of disciples including economics, community development, natural and social sciences, engineering, management and law. It also requires the engagement of interested citizens, stakeholders, and aboriginal communities, as there will be many possible paths to chose from along the way. Anyone supportive of the goal should have a say in how we get there, but we cannot waste any more time on those who choose to ignore the challenges and opportunities ahead. Nova Scotia’s entrepreneurs will be key, as they will be the ones to find the opportunities in this transition.

I do think that it is important for us to think beyond our own province, to work in collaboration with other jurisdictions and to pursue economic opportunities to help those beyond our borders become GHG neutral. What is clear is that there are a number of sectors of our economy that offer particular challenges and opportunities. Among these are agriculture, buildings, natural resources, renewable energy production, energy storage, and the potential integration of the transportation sector into the electricity system.

 

Meinhard Doelle,

Director, Marine & Environmental Law Institute

To download some of my publications on related topics, including a recent article on the Paris Climate Agreement, see http://ssrn.com/author=715387.