Wednesday, January 21, 2009

Economic Impact of Climate Change

A couple of interesting things are happening which is signaling that our respective governments are starting to embark on a green "revolution". For one, Environment Canada recently announced a study on the economic impact of climate change --along the lines of the Lord Stern 2006 report. Stern's report essentially stated that we need to invest 1% of GDP per annum to avoid the worst impacts of climate change. If we fail, then much more serious consequences down the road will occur which will drive down GDP by 20% from current levels due to the economic impacts of climate change. Stern's critics assert that the study did not properly use discounting and that the cost of mitigation was overestimated. Stern's book, which is 700 pages in length and outlines the economic impact of climate change, is probably what the Canadian government is looking for but with a Made in Canada sticker.

Last week, President Obama met with a select group of business men who are in the renewable energy field. One of the companies was a Quebec-based (from Bromont) firm called AAER Inc. AAER produces wind turbines and Dave Gagnon, the CEO, is obviously pleased that the new Obama Administration is looking at renewable energy as not only a priority issue but as an integral element of a US economic recovery. Hence the message to our Canadian leaders is: can you please start taking the Renewable Energy sector seriously just as the Americans are doing?

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