Rethinking priorities and reinventing economies

As governments and businesses in Canada and around the world look to rebuild from the economic fall-out of the COVID-19 pandemic, we have an opportunity to rethink and retool capitalism to meet the challenges of the climate crisis.

“The COVID-19 pandemic has certainly created an imperative to restart,” said Jean Andrey, dean of the Faculty of Environment at the University of Waterloo. “But it's also an opportunity for us to rethink economies at the local, national and global scale.”

Business leaders, entrepreneurs and academics like Andrey came together virtually on Monday to discuss the possibilities for a greener economic recovery. The Waterloo Innovation Summit explored the business case for climate capitalism and illuminated the imperative to balance sustainable financial growth with sustainable environmental impact. As we all look for solutions to recover from a global pandemic and a climate in crisis, we asked speakers how we can seize this crisis as an opportunity to rethink our priorities and redesign the global economy, cities and job markets.

Running out of time

The event’s keynote address was delivered by entrepreneur, author and venture capitalist Tom Rand (BASc '91), who emphasized the need for innovation, not just in technological solutions to climate change, but in our economy and society as well. Rand also highlighted the urgency of the situation, adding that we no longer have time to rely on tools like a carbon tax. The time has come, he said, to prioritize efficacy over efficiency.

“If your house is on fire, you don't care about how efficient the fire hose is, right?” asked Rand. “You care about how much water it puts on the fire, and you don’t really care if the hose leaks. So, when we think about innovations on the policy side, we need to think about how effective it is and how fast it will lower emissions?”

When asked how the pandemic changed society's view toward climate resilience and green recovery, alumnus Tom Rand (BASc '91) said he hopes individuals realize how important the public sector is as conductors of recovery, and how private sectors need to follow suit.

Investing in cleantech

The importance of investment in renewable energy and carbon reduction technologies was a common theme throughout the Summit. Professor Olaf Weber, a University Research Chair in Sustainable Finance, pointed to a lack of conventional investments, referencing a report that less than 1 per cent of research and development investment is in renewables. Government help could take the form of financial supports for investors or the idea of a sustainable infrastructure bank, he said, adding that as governments look forward to rebuilding, they’ll have a decision to make.

“After COVID, there will be much money spent to recover. So, do we want to continue to pour it into the fossil fuel industry, or do we want to change and invest into other industries?” asked Weber, who joined the event’s second panel.

When it comes to engaging capital markets in green innovations that drive Canada's economic recovery, professor Olaf Weber says the federal government must first lead the way and investors will follow. 

Greener government policy

Cathy Bardswick, president and CEO of the Canadian Institute for Climate Choices, showcased the role of government as a champion of Canada’s industrial innovators, calling those who speak up the "voices of courage." By listening to experts who can explain the barriers in the way of greener innovations and removing those challenges, she said, we can have a government that enables industries to respond to the climate crisis.

“I think governments need to be as accountable as we want industries to be to get this right and to be embracing what the future needs to look like,” added Bardswick.

But the broad implications of a green transition won’t be equal for everyone, said Professor Neil Craik. So, while he agreed that governments are central to aligning policy, financial investment and technology to build a more sustainable future, Craik also pointed to the need for individual climate change policy.

“Ultimately, climate change is a collective action problem, and it requires deep amounts of social solidarity,” said Craik, a professor in the School of Environment, Enterprise and Development and the Balsillie School of International Affairs. “If we don't start building that social solidarity, then we're really going to have a very hard time both politically and legally moving towards a low carbon future.”

Supporting small business and startups

As a specialist in small-to-medium business, Liliana Camacho is focused on the need for climate policy that reaches beyond financial investments for the biggest industrial actors. A PhD student in Waterloo’s Faculty of Environment, she started Speaker Sustainability Systems to help these resource-constrained organizations scale their existing sustainability practices. Camacho’s also an advocate for creating effective targeted incentives to reduce barriers to low carbon behaviours.

“We need a transition that is very different in terms of supporting social outcomes and environmental outcomes and addressing the kinds of cracks in our system that the pandemic really exposed," said Camacho. "In addition to sectorial regulations, we need investment and policy and private and public collaboration that supports sustainability entrepreneurship.”

According to doctoral researcher Liliana Camacho, small and medium businesses make up 90 per cent of Canada's economy. For that reason, Camacho says the solution to a greener rebuild needs to be a collaborative approach between private and public sectors, where regulations supporting sustainable entrepreneurship and consequences for non-compliance are in place.

Camacho pointed to the entrepreneurship ecosystem at the University of Waterloo as a good example of the kind of network that supports companies looking to build sustainable practices into their business.

“Incubators play a coaching role, educating entrepreneurs on what a sustainable business model might look like. What sustainable practices look like. And finding investors who understand how to assess environmental and social impact and can prioritize those impacts in addition to financial returns.”

Entrepreneurship is just one way that Waterloo tackles complex challenges like the climate crisis, said Feridun Hamdullahpur, president and vice-chancellor of the University of Waterloo, who pointed to the institution’s history of delivering solutions through purpose-driven research and technology.

“Our researchers and entrepreneurs are creating sustainable technologies, designing policies that protect our environment and engaging in research that will contribute to a green recovery in a post COVID society,” said Hamdullahpur as he welcomed guests to the Summit. “We know the climate crisis is not going away. There are mountains to climb and opportunities to be found. The University of Waterloo is ready to seize those opportunities.”