Bjorn Lomborg: Three smart ways for Canada to respond to climate change

At a time when government finances are strained and Canada and the world face many problems and threats, we need to consider policy choices carefully. On climate, we should spend smart, both to be effective and to make sure money is left over for all the other challenges.

A sensible response to climate change starts with telling it as it is. We are bombarded with doom-mongering that too often is just plain wrong. Climate change is a problem but it’s — literally — not the end of the world.

Yet overheated rhetoric has convinced governments to spend heavily on subsidizing inefficient solutions. In 2024, the world spent a record $3 trillion on the green energy transition. Directly and indirectly, taxpayers are subsidizing millions of wind turbines and solar panels that do little for climate change but enrich green-energy companies.

We need to do better. We need to invest more in the only realistic solution to climate change: research and development into low-carbon energy. Studies indicate that a dollar invested in green R&D can prevent US$11 in long-term climate damage, making it the most effective long-term global climate policy.

Throughout history humanity has tackled major challenges, not by imposing restrictions, but with transformative technologies. We didn’t address L.A. air pollution by banning cars. We invented the catalytic converter. We didn’t combat global hunger by getting people to eat less. We undertook a “Green Revolution” that brought high-yielding varieties and grew much more food.

In 1980, after the oil price shocks, the rich world spent more than eight cents of every US$100 of GDP on green R&D to find energy alternatives. As fossil fuels became cheap again, however, investment fell. And when climate concern grew, we forgot about innovation and instead shifted focus to subsidizing existing solar and wind technologies that are not effective.

In Paris in 2015, governments promised to double green R&D spending by 2020 — but then did no such thing. By 2023, the rich world still wasn’t back to spending even four cents out of every US$100 of GDP on it. The rich world now spends just $35 billion a year on green R&D  — which is only a hundredth of overall “green” spending. We should increase this four-fold to about $140 billion a year. Canada’s share would be under $5 billion a year, less than a tenth the $50 billion it spent on the energy transition last year.

But that much R&D would accelerate green innovation and hasten the day when green energy becomes cheaper than fossil fuels. We need big breakthroughs in many areas. Take nuclear power. Right now, it is way too expensive, largely because extensive regulations force the production of every new power plant into what essentially becomes a unique, eye-wateringly expensive installation.

What we need instead are small, modular reactors that get generic approval in the production stage and then are produced literally by the thousand at low cost. We don’t certify every cellphone when it’s bought. Airports don’t set ridiculously burdensome requirements for every newly built airplane. Planes get type-approved and then mass-produced.

If Canadian innovation in “fourth-generation” nuclear power can make nuclear cheaper than fossil fuels, everyone in the world will be able to switch — not just rich, well-meaning Canada but also China, India and countries all across Africa.

Of course, the nature of innovation is that we don’t actually know if fourth-generation nuclear will work out. But with smarter spending on R&D, we can afford to focus on many potential technologies, including: hydrogen production along with water purification; next-generation battery technology; growth of algae on the ocean surface that produce CO₂-free oil (which the decoder of the human genome, Craig Venter, proposes); CO₂ extraction; nuclear fusion; second-generation biofuels and thousands of other potential areas.

We must stop believing that spending ever-more money subsidizing still-inefficient technology will be a major part of the climate solution. Telling voters across the world — for decades — that they must be poorer, colder and less comfortable and eat less meat, drive fewer cars and never travel in a plane will never work — and will certainly not be copied by China, India and Africa. What will work is a future where, thanks to innovation, green is cheaper.

Though innovation therefore needs to be the cornerstone of climate policy we also need to invest in adaptation. Adaptive infrastructure like green areas and water features can help cool cities during heatwaves. Farmers are already adapting to rising temperatures, planting earlier with better-adapted varieties or even different crops, allowing the world to be better and better fed. Adaptation has often been derided as a distraction from reducing emissions. The truth is it’s a crucial part of avoiding large parts of the climate problem.

Along with innovation and adaptation, the third key climate policy is human development. Lifting communities out of poverty and making them flourish is not just good in itself — it’s also a defence against rising temperatures. Eliminating poverty reduces vulnerability to heat waves and hurricanes. Prosperous societies can afford more health care, social protection and investment in climate adaptation. They can also spend more on preserving environments, reducing deforestation and promoting conservation.

Focusing funds on these three policy areas means Canada can help spark the breakthroughs that are needed to lower energy costs while reducing emissions and making future generations more resilient to climate change and all the other big challenges. The path to solving climate change lies in innovation, adaptation and building prosperous economies.

Bjorn Lomborg is a visiting fellow at Stanford University’s Hoover Institution. This is the last of 10 articles that have run here Tuesdays, based on a forthcoming series to be published by the Fraser Institute.

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