The environment-economic tradeoff

Short term gains in jobs may be detrimental in future

Tuesday, April 7th, 2009

During the current recession, while people are left wondering if their money will still be there when they need it, the environment can seem to be a trivial concern.

According to Kul Bhatia, an economics professor at Western, during an economic downturn the public turns its attention to protecting jobs and families, which are highly vulnerable in the short term.

He explained such a reaction is a shortsighted strategy, which does not help environmental sustainability and the economy in the long run.

“In the short run there is a trade off,” Bhatia explained. “However, failing to invest in the environment now would result in more extreme global warming in the near future.”

As evidence of people forgetting the environment now that they are faced with more pressing economic anxieties, Bhatia pointed out the impact on sales of green products since the start of the recession.

In December 2008, for example, sales of hybrid vehicles fell by almost 50 per cent, Bhatia said.

Regardless, some automakers are investing in environmentally friendly cars.

Canadian auto parts manufacturer Magna International recently announced a partnership with Ford Motor Company to develop electrical power modules for electric cars, which are scheduled to be available for consumers in 2011.

Both the government and the private sector should focus investment on environmental initiatives right now even if it means smaller short term profits, Bhatia added.

As an example of the impact short term economic concerns have had on Canadians, Bhatia pointed to fears of a potential economic-environmental tradeoff as a contributing factor in the defeat of former Liberal leader Stéphane Dion in the last federal election.

The Ontario government, however, is still working towards the growth of green industries.

In 2007, the provincial government launched a five year project called Next Generation of Jobs, which is intended to stimulate growth of green manufacturing fuels in Ontario.

The NextGen program, which has since broadened to include other emerging industries, has not had any difficulty attracting companies despite the deteriorating state of the economy.

“We’re seeing a steady stream of applicants for the NextGen funding,” said Dino Rocca, director of communications for the Ontario ministry of economic development.

A total of six companies have received NextGen funding thus far, Rocca added.

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