The False Polarization Between Economy and Environment

Published in the Telegraph-Journal 24th January 2012

When President Obama recently rejected the Keystone XL oil pipeline proposal that would extend from Canada to the Gulf Coast, he did so in the face of the claim of House Republicans that tens of thousands of jobs would be lost by not approving the project.

“[T]he president cannot find a way to say yes to jobs,” said Charlotte Baker, spokeswoman for the House Energy and Commerce Committee.

The assertion that there is a clear division between the interests of the environment and the prospects for economic growth and jobs has featured prominently in recent debates and discussions on energy in both the U.S. and Canada.

By increasing the heat over the Northern Gateway hearings and establishing a direct linkage of the Gateway to thousands of jobs, the Canadian federal government has succeeded in raising the political risks of the project to anyone who would oppose it. And discussions about the potential benefits and risks of shale gas increasingly are couched in the language of necessity. We need shale gas development because we need jobs and government need revenue.

But some executives in the energy industry are calling the political battle between economy and environment a false dichotomy. Speaking at a recent international clean energy investment conference, Mark Vachon, vice president of GE’s successful Ecomagination program and a member of GE’s Corporate Executive Council, called environmental performance a key driver for business.

“There’s this theory that you have to pick one: economics or environmental performance. That’s nonsense. Innovation is the way you can have both, said Vachon. A major player in clean energy, GE has a business strategy which has meant investing more than $5 billion in clean tech R&D while Ecomagination has generated over $85 billion in revenues through 2010.

This is not the first time that industry and politicians have played the jobs economic prosperity linkage cards.

In the U.S., the automobile industry engaged in an unprecedented lobbying campaign when it was faced with intense pressure to respond to changes in vehicle emissions standards and safety regulations. The Clean Air Act was passed in 1970, but not before the auto industry had forecast that untold thousands of jobs were in jeopardy if the bill was passed. In fact, the competitiveness of the American auto industry was enhanced by new regulations and employment continued to rise across the industry after the passing of the Clean Air Act.

As opposition to the development of large-scale energy projects has increased, the proponents of economic benefits and job creation have allowed it to underplay the costs and risks inherent in these projects including that the extraction and production of tar sands oil in the fields of northern Alberta would cause far more greenhouse gas emissions than drilling for conventional crude. The Northern Gateway project is faced with almost monolithic opposition from First Nations peoples in the west. And in the U.S., lobbyists and House Republicans have attempted to market the project as way to reduce America’s reliance on Middle Eastern oil even though a substantial amount of the pipeline oil that would be refined on the Gulf Coast would be earmarked for foreign export.

One of the more clear themes moving into America’s national elections is the perception of a profound conflict between the economy and the environment. This theme is also increasingly a prominent feature of debate in Canada. But when leading investors from global firms representing a cumulative portfolio worth trillions of dollars gather to explain why the economy and the environment are inextricably linked, we should be less certain that jobs will be created only by conventional means in which the environment must be subordinated to putative economic progress. The evidence continues to mount that an innovative approach to economic development can simultaneously create jobs and support environmental sustainability.

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Filed under economic development, Environment policy

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