Vancouver is a global destination for companies to develop and demonstrate emerging clean energy technologies, green transportation systems, energy efficiency solutions, water technologies and green building technology. With one of the largest cleantech businesses communities in North America, Vancouver is positioned as a leading centre of green economic development, investment, and job creation. Here are the top ten reasons why Vancouver, BC, Canada belongs in a list of the top cleantech regions of the world.

1) Spreading Cleantech philosophy. Vancouver is part of the large economic region Pacific Northwest and with its cultural and historical ties to Asia is in the unique position to successfully share business ideas and technologies and open the gate with Asia. Currently, many future leaders are being educated in Vancouver on some of the top cleantech activities that can be transposed onto the Asian scene.

2) Large Cleantech Funding. Vancouver is known for implementing some of the most progressive and effective policies worldwide, including an essential carbon tax, a ban on fossil fuels for electricity generation, and stricter regulations on vehicle and building emissions. To do this, Vancouver needs proper funding. The Innovative Clean Energy Fund (ICE) provides companies that look into renewable energy technologies that can be used for commercial application with $25 million annually. BioEnergy Strategy has provided $25 million to encourage research and developing in areas including wood-waste cogeneration, biofuel production, and wood pellet production. One last example, Green Infrastructure Fund has allotted $1 billion over a five year period to address five of the nine major cleantech sectors – water and wastewater, power generation, energy infrastructure, recycling and waste, and carbon transmission and storage company’s process efficiency and abatement.

3) Targeting greenhouse gas emissions. To manage emissions, Vancouver has set a goal to reach a 33% reduction of emission levels by 2020, and a 50% reduction by 2050. They have also started funding all new electricity generation projects that do not emit any harmful gas emissions, and work based of renewable energy. To goal is to eventually have renewable energy comprise at least 90% of the total electrical generation. Vancouver has currently set up a number of legislations to see this through, including new tailpipe emission standards. One way they are seeking to lower greenhouse gas emissions is through a cap and trade system that will include a number of financial penalties businesses will incur if they do not make positive steps in reducing the amount of carbon dioxide produced by their company.

4) Strong push on green buildings. By making the push toward green buildings, Vancouver hopes to raise overall efficiency and lower emissions. One neighborhood has taken sustainability to a whole new level by implementing LEED platinum, which results in overall energy reduction and high-performance. Examples of buildings going green include the New Convention Centre and Whistler Olympic Village.

5) Enthusiastic early adopters. Vancouver’s local population shows significant enthusiasm for clean technologies and is an excellent city to test out new cleantech products. Local leaders and decision makers from various communities have recognized the benefits of cleantech sectors and have showed as a result great interest in adopting cleantech ventures and pilot projects. Even just small items, such as creating more bike racks can do so much within the city.

6) Vancouver Greenest City Initiative. Vancouver’s Greenest City Initiative is promoting green sectors and technology. By 2020, Vancouver looks to create 20,000 green jobs and reduce the total amount of weight sent to landfills by at least 50%. Currently, Vancouver has the smallest carbon footprint of any major city in North America, and through this initiative, they aim to become the greenest city in the world by 2020.

7) Highest Ratio of Cleantech companies to GDP in Canada. Vancouver has long been an active and growing base of emerging cleantech companies, and is currently home to 25% of all cleantech companies in Canada. The cleantech industry has been a driving factor in the economic growth of not just Vancouver, but the province of British Columbia as a whole. Currently, British Columbia’s cleantech sector has enabled it to raise its GDP by 175%.

Pacific Carbon Trust. Started in 2008, Pacific Carbon Trust in Vancouver looks to create and implement various carbon offset products, to assist clients meet their goals of overall carbon reduction, and to foster and support the total growth of a low carbon economy throughout British Columbia. It was created to address the current climate change problems and what businesses can do to lower their greenhouse gas emissions. Because of the work of Pacific Carbon Trust, British Columbia implemented the world’s first revenue- neutral carbon tax on fossil fuels.

9) Strong academic support. The University of British Columbia Vancouver campus has created numerous initiatives to create a living lab that can be used to identify different climate change solutions. Another example for the strong push on the academia is the Pacific Institute for Climate Solutions and Pacific Climate Impacts Consortium that were established for $94 .5 million to bring together universities, government and the private sector to identify climate change solutions.

10) Vancouver Greentech Exchange. In response to the rapid climate change, Vancouver is making the move not only toward cleantech, but also greentech, which are enterprises and technologies that produce a positive environmental impact. Through exchange, Vancouver Greentech looks to link greentech and cleantech companies with different market access programs to spread the word about greentech. This is done through important meetings between the two groups to share ideas and experiences that will spread green ideas that can be utilized.

Shawn Lesser is the president and founder of Atlanta-based Sustainable World Capital, which is focused on fund-raising for private equity cleantech/sustainable funds, as well as private cleantech companies and M&A. He is also a co- founder of the GCCA Global Cleantech Cluster Association, and can be reached at shawn.lesser@sworldcap.com

Florian Gabriel is Trade Commissioner for Switzerland based in Vancouver and Deputy Director of the Swiss Business Hub in Canada. He can be reached at florian.gabriel@eda.admin.ch.

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Amid a growing call for reducing atmospheric concentrations of CO2 to 350 parts per million, a group of economists maintains that striving to meet that target is a smart investment — and the best insurance policy humanity could buy.

The climate change news from Washington is cautiously encouraging. No one in power is listening to the climate skeptics any more; the economic stimulus package included real money for clean energy; a bill capping U.S. carbon emissions emerged, battered but still standing, from the House of Representatives, and might even survive the Senate. This, along with stricter emission standards in Europe and a big push for clean energy and efficiency standards in China, provides grounds for hope for genuine progress on emissions reduction.

But while climate policy is finally moving forward, climate science is moving faster. One discovery after another suggests the world is warming faster, and climate damages are appearing sooner, than anyone had expected. Much of the policy discussion so far has been aimed at keeping the atmospheric concentration of CO2 below 450 parts per million (ppm) — which was until recently thought to be low enough to prevent dangerous levels of warming. But last year, James Hansen, NASA’s top climate scientist, argued that paleoclimatic evidence shows 450 ppm is the threshold for transition to an ice-free earth. This would imply a catastrophic rise in sea levels, eventually flooding all coastal cities and regions.

To avoid reaching such a crisis stage, Hansen and a growing number of others now call for stabilizing CO2 concentrations at 350 ppm. The world is now around 390 ppm and rising; since CO2 persists in the atmosphere for a long time, it is difficult to reduce concentrations quickly. In Hansen’s scenario, a phaseout of coal use, massive reforestation, and widespread use of carbon capture and storage could allow the world to achieve negative net carbon emissions by mid-century and reach 350 ppm by 2100.

Can we afford to reduce atmospheric concentrations of CO2 to 350 ppm by the end of this century? To address this question, Economists for Equity and Environment (www.E3Network.org) — a group dedicated to applying and developing economic principles to protect human health and the environment — conducted a study of “The Economics of 350.”

Why the wide range of cost estimates?

At first glance, there is a bewildering range of estimates of the costs of climate protection. Look more closely, however, and there are just a few projections of economic disaster, out in right field by themselves. Other estimates range from modest costs to small net economic gains.

The outliers are the handful of private consultant studies funded by partisan lobbying groups such as the U.S. Chamber of Commerce and the National Association of Manufacturers. Using proprietary models (or their own adaptations of standard models), and pessimistic economic assumptions, these studies forecast that even mild U.S. proposals, such as last year’s Lieberman-Warner bill, would cost many thousands of dollars per household and would cause widespread unemployment and economic dislocation. An analysis by journalist Eric Pooley documents the excessive, often uncritical attention given to these studies by the media.

These projections of economic ruin have not been reproduced by any major academic or non-profit research group. Many economic models find that the modest steps called for in recent U.S. proposals would have very small costs and virtually undetectable effects on total employment — as documented in a report by Nathaniel Keohane and Peter Goldmark for the Environmental Defense Fund.

But to reach 350 ppm, we will have to go far beyond the emission reductions considered in recent U.S. proposals. How much will it cost to reach this more ambitious target? Until recently, most economic research focused on higher targets such as 450 ppm or more. There are, however, four major climate economics modeling groups — all at European universities — that have analyzed the costs of reaching 350 ppm.

One group starts from the (realistic) assumption of high unemployment, and finds that long-run employment and economic growth would be

Needed emissions reductions will cost 1 to 3 percent of world economic output, some studies find.

increased by a program of public investment in green technology and emissions reduction that leads to 350 ppm. The other three groups adopt the common assumption that short-run unemployment can be ignored in long-run models. They generally find that the needed emissions reductions will cost an average of 1 to 3 percent of world economic output, for some years to come.

Other studies have reached more optimistic conclusions about costs. McKinsey & Company, an international consulting firm, has carried out detailed studies of the costs of hundreds of emission-reducing technologies. They find that some emissions can be eliminated for no cost or even an economic savings; more than half of worldwide business-as-usual emissions in 2030 could be eliminated at very small total cost. The net costs of reducing carbon emissions (i.e. investment costs, minus the value of energy saved) go down when the price of oil goes up, and vice versa. McKinsey’s entire package of reductions, eliminating more than half of world emissions, would have zero total cost if the price of oil were $90 per barrel.

Studies from major environmental groups, including Greenpeace and the Union of Concerned Scientists (UCS), have reached even more optimistic conclusions than McKinsey. Both Greenpeace and UCS project substantial economic savings from emission reduction, with fuel savings much larger than the costs of investment. Both assume high oil prices — up to $140 per barrel for Greenpeace — along with rapid change in emissions-reduction technologies.

Deciding whether it’s worth the price

The range of cost estimates for reaching 350 ppm, combined with uncertainties about oil prices and future technologies, make it difficult to choose a single estimate of the total economic cost. Suppose that, for the sake of argument, 2.5 percent of world output must be spent on climate stabilization for years to come. Is that an unacceptably large number?

Imagine an economy growing at 2.5 percent every year (a little slower than the recent U.S. average). Suppose it skips one year’s growth — all too easy to imagine in 2009 — and then resumes growing. That makes GDP 2.5 percent smaller than it would have been, forever. So the “skip year” has the same effect as spending 2.5 percent of output on climate protection every year. Household incomes would take 29 years to double, instead of 28.

Alternatively, we know we can afford to devote 2.5 percent of income to protection against a remote but disastrous threat — because we already do,

We can afford to protect the climate, and leave a livable world to future generations.

year after year. In 68 countries, military spending exceeds 2.5 percent of GDP. In the United States and China, the top greenhouse gas emitters, military spending absorbs more than 4 percent of GDP. Both countries would be safer, not more vulnerable, if they diverted half of their defense spending to defense against climate crisis.

The most important conclusion of our research involves what we did not find. There are no reasonable studies saying that a 350 ppm stabilization target will destroy the economy. This is not surprising. The ominous recent research on potential climate damages does not examine the cost of doing something; instead, it looks at the cost of doing nothing about emissions.

If the worst happens, our grandchildren will inherit a degraded Earth that does not support anything like the life that we have enjoyed. On the other hand, if we prepare for the worst but it does not quite happen, we will have invested more than was absolutely necessary — in perfect hindsight — in clean energy, conservation, and carbon-free technologies. Which extreme presents the greater danger?

Climate risk and insurance

Think about climate risk as an insurance problem. You don’t buy fire insurance because you’re sure your house will burn down; rather, you are not, and cannot be, sure enough that it will not burn down. Likewise, projections by Hansen and others of dangerous climate risk from staying above 350ppm CO2 are not certainties; they are necessarily uncertain (although becoming more likely as temperatures rise).

The analogy to insurance is important but inexact; there is no climate insurance company to which the world can hand 2.5 percent of output, if that is what it costs. There is, however, a need for large-scale investment, both in proven emissions-reducing technologies and in research and development.

The role of government in climate policy is not only to set appropriate price signals through a carbon tax or cap-and-trade system; the public sector must also guide research on clean energy technologies. Despite free-market mythology to the contrary, this has worked well in the past. Wind power is profitable today as a result of decades of government investment in the United States and Europe. In another arena, the U.S. government essentially invented microelectronics in the 1950s and 1960s: At first, almost all transistors, integrated circuits, and the like were bought by agencies such as the Pentagon and NASA, because no one else could afford them. Just a few decades of massive government purchases of these items turned microelectronics into the premier private-sector success story of the late-20th century, transforming everyone’s life in countless unexpected ways.

The climate crisis challenges us to do it again, to invent the new technologies and industries that will transform life in the mid-21st century and beyond. We know it’s possible: We can afford to protect the climate, and leave a livable world to future generations.

Author Frank Ackerman is senior economist with the Stockholm Environment Institute at Tufts University. He is also a co-founder of Economists for Equity and Environment (E3), and the lead author of E3’s “Economics of 350” study.

Article appearing courtesy of Yale Environment 360

[photo credit: pfala]

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