C HAPTER 7: C REATING I NVESTMENT O PPORTUNITIES T HROUGH T HE SDTC
However, the costs of not meeting the climate change challenge are equally as high. The insurance industry, for example, estimates that the worldwide direct economic losses from natural disasters, primarily weather-related, have risen from US$1 billion per year in the 1960s to more than $50 billion per year in the 1990s. This is a fifteen-fold increase when adjusted for inflation. Indeed, Canada saw three of its worst natural disasters ever in the 1990s: the 1996 Saguenay flood, the 1997 Red River Basin flood and the 1998 ice storm in Quebec and eastern Ontario. Each caused more than $1 billion in damages and untold human tragedy (Ref 5 ). Canada needs technological innovation. According to the OECD, the Canadian economy represents about 2 per cent of the global gross domestic product and produces about 2 per cent of the world’s greenhouse gases (GHGs). However,
Canada produces the second highest per capita rate of GHG emissions in the world (22.7 tonnes/person). The national emissions rate is disproportionate to Canada’s economic productivity, and even accounting for geography and climate, suggests that Canada needs to dramatically improve its industrial practices. The emission levels have continued to increase steadily from 601 million tonnes (MT) in 1996 to a projected 810 MT by the year 2010. If Canada is to meet its Kyoto commitment of a six percent reduction from 1990 levels, or 565 MT, it must actually reduce about 33 per cent, or 245 MT, from 2010 levels (Fig. 1). This gap poses an enormous challenge for the entire economy, one that can best be met by technological improvements in all industrial sectors, as well as a shift in the values and behaviours of Canadian society.
Figure 1: Canada’s Emissions Gap
If Canada doesn’t meet the innovation challenge, others will.
Countries such as the United States, the Netherlands and the United Kingdom are aggressively developing technologies to meet the climate change challenge, while at the same time increasing their productivity. The United States, for example, spends 14 times more money on R&D than does Canada, but obtains 49 times more revenue from licensing and royalties. Canada currently stands in last place among the G7 countries in terms of R&D investment relative to GDP. But the investment picture looks equally disappointing in the private sector. It invested a total of $18.6 billion in ventures throughout Canada between January 1996 and July 2002 (Ref 6 ). Of that, approximately 2.6 per cent, or $488 million, was for energy and environment related projects. This is well below the North American average of four per cent for private investment in clean technologies (Ref 7 ).
5 Institute for Catastrophic Loss Reduction. University of Western Ontario. http://www.uwo.ca/wnews/issues/2001/apr26/centre/index.htm 6 Ventures West. Report on the Canadian Venture Capital Industry. Files. 7 Investment Monitor Q1/Q2 2002 . Cleantech Venture Network.
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