Climate change is a pressing issue that is continually on the rise. It is also, unfortunately, a highly politicized topic. The climate crisis is often discussed in a silo; disconnected from other pervasive issues like physical/mental health and the economy. The environment and the economy are not independent, nor is one more important than the other. Prioritizing one over the other is going to have devastating effects, some of which we already have begun to see such as increased cost of living, loss of resources, and increased frequencies of natural disasters.
I want to preface this by saying, the Carbon Tax imposed by the Government of Canada is not adding to inflation/the cost of living in the way the vast majority of Canadians think it is. The Carbon Tax, according to the David Suzuki Foundation and The Bank of Canada, is only responsible for 1/20th of the price increases seen over 2023. So while it would technically be correct to say that eliminating the carbon tax would lower prices, there are bigger fish to fry when it comes to lowering prices. Targeting the carbon tax is not going to make a big dent in the unaffordability Canadians face.
According to the Canadian Climate Institute, climate change will reduce economic growth at all levels; locally, regionally, provincially and country-wide. This means we will see a decline in household incomes and businesses. Household incomes could potentially fall by 18%, with low-income households shouldering more of this burden. Small businesses, young entrepreneurs, and even big corporations will begin to face issues with supply and demand chains and goods becoming more costly, as the GDP (Gross Domestic Product) is predicted to fall by 12% by the end of the century. The reason for this big fall in GDP is due to increased taxes the government enforces in order to pay for climate disasters, like the destructive wildfire season of 2023, costing over $720 million.
How Can We Combat This?
Reports from The Canadian Climate Institute show that for every $1 spent on proactive measures by the government today, $13-$15 will be returned in future years, directly and indirectly. In their macroeconomic analysis, they reported ~$5 will be returned directly through reduction in cost of repair/replacement of lost or damaged infrastructure as a result of extreme climate events. The other ~$10 will be returned back into the economy (indirectly) through avoided disruption of supply chains, avoided loss of labour productivity, and avoided loss of income as a result of road delay and damage.
Additionally, in their report it is stated that “The combined effects of lower global emissions and proactive adaptation reduces total real GDP losses by the end of the century by 75 per cent.” Lowering emissions and proactive adaptations are like putting out a fire before it spreads, turning into what could have been a devastating blaze into a few manageable scorches, preserving valuable resources. Regarding the state of our economy and its relation to the environment, it is clear that even small steps taken and enforced by the government can lead to promising effects.
Actions like expanding public transit infrastructure by investing in urban and intercity public transit can help in reducing greenhouse gas emissions, easing traffic congestion, and providing accessible, cost-effective transportation. This idea is backed by The Canadian Urban Transit Association, stating that improving public transit can lead to reduced pollution and stimulate local economies. You can read more about this here.
London Transit (Alessio Donnini/CBC News)
Supporting Indigenous-Led Conservation Efforts can also lead to the protection of vast natural landscapes and supports local economic development in Indigenous communities. This can be seen in 2016, with the Sahtúgot’ine (Sahtu Got'ine) Dene people of Deline becoming the first self-governing community in the Northwest Territories. Through negotiation with territorial and federal governments, they were guaranteed consultation with the government on matters such as land use and resources within the settlement area. The Indigenous Leadership Initiative also demonstrates successful examples of the benefits reaped by the economies and the environment through Indigenous-led efforts. In 2017, an innovative strategy for the restoration of caribou across 1.5 million square kilometers spanning Quebec, Labrador and Nunavik was announced by 7 Indigenous Nations and groups. Tilted UPCART (Ungava Peninsula Caribou Aboriginal Roundtable), it represents Canada’s first-large scale cooperative Indigenous agreement for wildlife management. UPCART has a social and economic plan within the agreement where it states to “Assess the economic value of caribou to family economies and livelihood strategies, monitor food-security, and develop plans to mitigate food security issues when caribou is scarce through sharing, alternative harvesting strategies, and other means.” This quote exhibits UPCART’s comprehensive approach that extends beyond wildlife management to address broader social and economic needs, demonstrating how Indigenous-led strategies prioritize both ecological sustainability and community well-being, aligning with the larger context of conservation efforts that support local development. Some more insight into what this program does can be found on their website here.
The link between protecting the environment and supporting the economy is clear, but the government has yet to take decisive action to make real progress on both fronts. It’s important for policymakers to understand that economic growth and environmental care go hand in hand. By investing in green policies and solutions, the government can create new jobs, support innovative industries, and build a stronger, more resilient economy. On the other hand, failing to act could lead to serious environmental and economic challenges for future generations. A well-planned approach is needed to protect natural resources and encourage economic growth at the same time. Only through practical and coordinated efforts can we build a future where both the environment and the economy can flourish.