Funding innovation could help our economy and climate

Learn more about the Cascade Institute.
 

Though it may seem counterintuitive to place more public funding into an industry that’s contributing to the warming climate, this method has been used with success in the past. Researchers from the Cascade Institute at Royal Roads University — Founder and Executive Director Thomas Homer-Dixon, Director of the Geothermal Energy Office Peter Massie, and Policy Lead at the Geothermal Energy Office Emily Smejkal — wrote about this initiative in their recent opinion piece for the Globe and Mail. 

Here's some of what they wrote: 

“Canada faces two deep-seated, increasingly debilitating economic weaknesses: chronically low productivity growth and a lagging transition away from carbon-based energy sources. Both arise from our poor performance harnessing technological innovation. And both have a common solution.

“If we can fix our underlying innovation problem, we’ll generate more wealth per hour of labour and per dollar of capital. And we’ll have a cleaner, more efficient economy to boot. Huge benefits will then cascade through every facet of our society.

“Canada’s oil and gas sector lies at the nexus of this tangled challenge. It’s among our country’s largest industries, supporting more than 70,000 jobs in domestic extraction alone and making us the world’s fourth-largest oil producer. The sector is also one of Canada’s largest funders of energy innovation. But its productivity growth is among the lowest of all sectors, dragging our whole economy’s productivity numbers downward.

…

“Canada should probably not be betting a big chunk of its economy on such a future. The International Energy Agency forecasts that demand for fossil fuels will need to fall about 80 per cent if the world is to reach net-zero carbon emissions by 2050. Without reinvigorating our vital oil and gas sector, a shift of this magnitude will devastate Canada’s employment, trade balance, currency value and overall economic growth.

“Yet the history of the very same industry offers a made-in-Canada solution. Decades ago, the oil and gas sector played a key role in one of Canada’s most notable technology breakthroughs. It’s a story of how, contrary to conventional wisdom, public money can be instrumental in unlocking economic growth. What happened then says much about how we can simultaneously accelerate innovation, diversify our energy mix and boost our country’s overall productivity now.”

Read the full opinion piece from the Cascade Institute or the Globe and Mail.