In the age of COVID-19, can Alberta transition to a more sustainable economy?

University of Alberta economic and business experts weigh in.

By Jenna Bell

As more businesses and services bounce back from the COVID-19 economic shutdown, Alberta’s recovery remains an open question. The province’s single largest source of income — the fossil fuel industry — continues to operate below pre-pandemic levels. But even without this spring’s chaos, there are many who want to see Alberta’s economic fortunes decoupled from fossil fuels. Is post-pandemic Alberta the right time to reconfigure the economy with long-term sustainability in mind?

In responding to the pandemic, something incredible has happened: people have transformed their lifestyles, and many positive, new behaviours and habits have formed. More people are enjoying pedestrian activities rather than driving. Citizens are also exploring their local natural areas more. Many are rethinking their consumption patterns and buying less, or choosing to buy local.

In all of this, the most notable shift is simply the fact that so many organizations and businesses have adapted so quickly. Within days, millions of people heeded the advice of experts on a problem that is largely invisible, and they continued to change their behaviour for the public good.

“One of the biggest surprises is how much change organizations are capable of making when they set their minds to it. Even organizations that you would not think of as being very flexible or innovative,” said Joel Gehman, a professor in the Alberta School of Business.

Gehman studies what influences corporations to innovate or not in response to the demands of sustainable development.

Suddenly, pretty much any organization he’s ever studied has had to innovate in the face of the pandemic. “That gives us a lot of hope that, if these same organizations would decide to help with these big social issues, they could really make an impact.”

An eye to the future

Picture this — the year is 2070 in Alberta. Extraction of fossil fuels has ceased, communities are living entirely off of renewable energy, agriculture is in balance with the land, emergency response systems are prepared for any disaster, our cities’ water needs are manageable, and net CO₂ emissions are zero.

This is the future we must strive for if we are to combat climate change, experts suggest. The UN’s climate change panel states that CO₂ emissions must reach zero by 2070 to avoid more than a 2℃ temperature rise. Electrifying industrial practices, using carbon capture and storage, and pursuing new innovations are methods that are likely to be implemented to reach this goal.

And with a 2℃ rise, Alberta will still need to deal with an increasing rate and severity of natural disasters. We are not strangers to extreme weather. Out of the top ten most costly natural disasters in Canadian history, six of them took place in Alberta. But how many more can we handle?

Alberta has had the most severe environmental disasters associated with water of any part of Canada over the last 15 years. As spring melt continues to occur earlier, experts are concerned the agricultural industry will have trouble securing water throughout the entirety of the growing season. So not only will we need to prepare for floods, but water will need to be conserved diligently throughout the rest of the year.

There is a lot to prepare for, and with massive reinvestment going into the pandemic recovery, now is the time to start planning, according to Faculty of ALES graduate student Andrea Miller.

“Where we’re headed right now is a bit of a dangerous place where we aren’t planning for a transition. Communities and workers are going to bear the brunt of that,” said Miller.

This is one reason Miller advocates for a transition to a sustainable economy that incorporates, not only a shift to renewable energy, but also justice and equity for all — a radical social movement. “I think what a transition needs to look like is something that’s planned and managed well, while incorporating justice and equity for everyone,” said Miller.

One government initiative to come out of the pandemic points in the right direction, according to U of A economics professor Joseph Marchand. The federal government handed $1.7 billion to the prairies to clean up orphaned oil and gas wells. This is great news for the environment, as well as for those seeking jobs in the energy sector.

“The fact that the federal money was tied to that makes me think that yes, there are opportunities for green companies going forward,” said Marchand.

Return to nature

Images on social media this past March and April showed animals returning to previously polluted areas, or taking over cities now absent of humans. With factories shut down, people staying home, travel significantly decreased and most of the world being put on pause — the Earth must have taken a huge sigh of relief, right?

Unfortunately, no. Although emissions have been decreasing significantly worldwide, experts say that it’s not enough to make a real impact towards fighting climate change.

“The data so far shows us that we’re only going to see 8–10 per cent [reduction] of the overall carbon footprint that we would normally have emitted this year. So that goes to show even though this feels very, very extreme, it’s not like we’re cutting things in half,” said Gehman.

Andrea Miller concurred: “What does it mean when we basically have a complete shutdown of the economy and our climate targets are still not where they need to be? I think it speaks to how far we still need to go.”

Climate change may not be stopped by an economic shut down, but could the significant drop in the value of oil be used as an advantage to jumpstart a transition to a green economy, since there is more room for alternative energy sources to compete?

Marchand explains that the exact opposite is likely to happen. Because oil is so cheap, demand for it is only expected to increase. “Oil looks a lot cheaper than the alternatives, including green options. So looking towards a transition towards green energy, that’s pretty much the last thing that you’d want,” said Marchand.

“When we run out of oil and gas, we will reach a point where transitioning is the only option — so I think we need to face the music and plan for a transition now.”

— Andrea Miller

The uncertain future

There is lots of uncertainty looking towards the future. It is impossible to predict what Alberta’s economic situation will be like even one month from now. The Canadian Emergency Response Benefit (CERB) has been extended until December, and there is still uncertainty about the state of the economy once the assistance program ends.

“How are all of these assistance programs going to end? And when they all end, is that when the biggest hit on the labor market happens? I don’t know the answer to that,” said Marchand.

One thing is for certain: this will be a time in history that is looked back on for generations to come. We are currently living through a pandemic that will change the course of history.

Joseph Marchand is rewriting parts of his textbook before it is published to account for the significant effects of COVID-19. Andrea Miller is adapting her graduate research to fit within the restraints brought on by the pandemic. Things are changing in a moment’s notice, and Canadians are continuing to roll with the punches.

It is evident that there is potential for Alberta to reconfigure its economy during this time — and some green initiatives are already taking place, like the orphan well clean-up. The pandemic has shown us, however, that if we are to combat climate change, we must pursue green alternatives with strong intent. Shutting down the economy briefly was not enough.

Written by Jenna Bell, Sustainability Council intern and fifth-year environmental science student in the Faculty of ALES.

Edited by Trevor Chow-Fraser, Sustainability Council marketing and communications lead.