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 June 29, 2010
Canada should follow its own carbon policy, says Michael Porter

 Canada needs to implement its own progressive carbon policy rather than following the "mindless US path", says famed Harvard University professor Michael Porter.

In a speech delivered in Montreal yesterday to an audience of international business, policy and academic leaders prior to the 2010 World Congress of Environment and Resource Economists, Porter said what we really do need is, in effect, a carbon tax. "That is a very visible, transparent, fair approach that is likely to trigger the appropriate innovation."

The carbon capture-and-trade model that the U.S. "has patched together" is too complicated and blunts incentives that would enhance innovation and competitiveness, said Porter at a symposium organized by the Sustainable Prosperity network.

Professor Porter, widely seen as the world's top competitiveness expert, was the keynote speaker of the High-level Experts lunch panel on how environmental regulations can be designed to boost innovation and competitiveness. Porter argues that strong environmental regulation need not hurt the economy, but can drive innovation and growth.

Quoted in an interview with the Montreal Gazette following his presentation, Porter said that carbon and energy issues are becoming critical factors in economic growth.

"Even if you don't believe in climate change, we do understand the fundamental importance of energy and energy costs," he said. "A carbon tax would lead to a rethinking of energy use, drive innovation in the green economy and yield profits for "first movers," he added.

"I think there is plenty of evidence that that works (where it has been implemented in Europe), and it has been implemented in a very intelligent way in B.C., and it's working there."

In earlier writings Porter has written: "Countries need an entirely new way of thinking about the relationship between environment and industrial competitiveness. No lasting success can come from policies that promise that environmentalism will triumph over industry, (or) that industry will triumph over environmentalism. Instead, success must involve innovation-based solutions that promote both environmentalism and industrial competitiveness."

"Porter's message is especially relevant for Canada," said Professor Stewart Elgie, chair of Sustainable Prosperity. "If we act now and put a price on carbon emissions, rather than waiting for the U.S., it will not hurt Canada's economy - and will likely improve our competitive position in an ever-greening global economy."

Sustainable Prosperity and Resources for the Future hosted the one day high-level symposium entitled "The Porter Hypothesis at 20: How Can Environmental Regulation Enhance Innovation and Competitiveness?." The Chair's Background Paper on the Porter Hypothesis is available for download .

The event was designed to explore how Canada should position itself to prosper in a future low-carbon economy, with specific reference to these issues:

  • How can businesses become greener and more competitive, and stay profitable
  • Is Canada wise (economically) to wait for the US before regulating carbon emissions?
  • What approach is best for regulating carbon and pollution (green taxes, cap & trade, clean technology subsidies)?
  • What can policy-makers learn to help put in place regulations that promise positive economic and environmental outcomes?

Michael Porter's PowerPoint Presentation is available here.

Source: www.montrealgazette.com