… Here’s how we can do both
BY SAV DHALIWAL
Chair, Metro Vancouver Board of Directors
Chair, Regional Economic Prosperity
AS another summer in Metro Vancouver breaks records for extreme temperatures and drought conditions, the innovation desperately needed to meet our net-zero targets and thwart further climate deterioration could also grow B.C.’s economy.
Metro Vancouver’s own modelling shows that implementing a set of aggressive policies to accelerate the electrification of buildings and personal transportation while increasing the use of renewable natural gas to displace emissions in industry, will not be enough to make our region carbon neutral by 2050. We need to develop innovative approaches to make existing zero emission technologies less expensive, easier to use, and more readily available in the market while also developing new zero emissions technologies.
Indeed, half of the technologies we need to meet 2050 emission reductions targets are not yet commercially available. So how can we spur the technological innovation required to meet our targets and avoid climate breakdown?
In June of this year, the province announced the hiring of economist Mariana Mazzucato as an advisor on the forthcoming B.C. Economic Plan. Mazzucato’s latest book Mission Economy: A moonshot guide to changing capitalism may be the kind of visionary thinking we need to tackle our most pressing issues while growing our global competitiveness.
In Mission Economy, Mazzucato argues that we can apply innovation (and budgets) to tackling societal goals just as walking on the moon was made possible by the Apollo program of the 1960s. Government plays a key role in this approach by providing ambitious public investment in high-risk technologies during the early stages of development. This is the type of investment the private sector would shy away from as the funding required is large, long-term, and highly uncertain.
This type of large-scale investment could transform our economy. Just as the Apollo program led to the development of a wide array of technologies ranging from CAT scans to water purification systems to portable computers, the positive impacts of ambitious investment in carbon neutrality could spur industries we can’t even conceive of today.
Game-changing technologies aside, the latest report from the IPCC has sounded the alarm that fast action is needed to avoid catastrophe. In a recent survey of international climate economists, two-thirds said that the costs of investing toward net-zero by 2050 would be outweighed by the economic benefits. In a world where the cost of doing nothing increases everyday (the B.C. Government spent 70% of its wildfire budget before the season began), we cannot wait.
And while the Province of B.C. may not necessarily be gearing up to send our economy to the moon, there are concrete actions that can spur innovation, increase the province’s competitiveness, and reduce emissions.
Innovation ecosystems are complex, but public agencies play a vital role. Research and development institutions, such as Taiwan’s Industrial Technology Research Institute (ITRI), can bridge the “valley of death” funding gap between industry and academia. ITRI has been largely credited for catalyzing Taiwan’s growth from a heavy industry-based economy to the technological powerhouse it is today (Taiwan is the world’s main supplier of advanced computer chips). The success of ITRI is in part because government invested in “exploratory and pioneering” research projects that were too risky for the private sector. This left the private sector to oversee the technological development and determine potential market applications of the resulting research.
At Metro Vancouver, we’ve been investing, along with partners, in our own exploratory and pioneering research. Our hydrothermal processing biofuel demonstration project will evaluate the conversion of wastewater biomass to low-carbon transportation fuels. If successful, this project would mean immense savings (over $60 million) and significant reductions in greenhouse gas emissions.
Another lesson from Taiwan has been their investment in industry-critical physical spaces like lab and incubation spaces. These types of facilities can be leased below-market, providing much-needed spaces for many generations of firms and an ongoing revenue stream for government to invest in further innovation. How many firms in the Vancouver region are unable to scale (or even get started) because land and physical spaces come at such a premium?
The Metro Vancouver region’s burgeoning high technology sector, leading research universities and institutes, established hydrogen cluster, and standout firms in cleantech, mean we’ve got the right ingredients to be a global research, engineering, commercial, and export leader in tomorrow’s economy.
As Mazzucato points out, vision and leadership are crucial for making the bold changes needed to embark on this net-zero mission. The province is taking the right steps to navigate our post-pandemic recovery and tackle the most pressing issue of our time; our collective future relies on our ability to launch.
Sav Dhaliwal is Chair of the Metro Vancouver Board of Directors and the Regional Economic Prosperity Management Board. Regional Economic Prosperity is a new service of Metro Vancouver with the objective of attracting strategic investment to the region that will generate a shared prosperity – providing economic opportunities for residents and businesses consistent with regional environmental and social objectives. With a management board of elected officials and community leaders providing guidance and strategic advice, this will be accomplished through a collaborative approach, involving member jurisdictions of Metro Vancouver, First Nations, key regional stakeholders as well as federal and provincial ministries and agencies active in investment attraction.