This article was previously published in Corporate Knights.

Sometime in the coming days the federal government will release its much anticipated climate competitiveness strategy. It will be a pivotal moment for climate and economic policy for our country. Or, rather, it should be. 

Currently, much of the nation is rightly animated by the urgent need to diversify trade away from the United States. Our once stable ally has quickly imposed an erratic barrage of self-owning tariffs and threatened our national sovereignty. 

In practical terms, that means Canadian businesses will need to be competitive in markets that are rapidly moving towards clean energy. Think of the European Union and the U.K.—both jurisdictions continue to see rising adoption of renewables and electric vehicles. And both are set to impose carbon tariffs on imports that don’t already price carbon to specified levels. In China, another critical market, roughly half of all new car sales are already electric—and rising fast. Renewable installations are off the charts. And the country is expanding coverage of its massive national carbon market. 

In fact, the transition to clean energy is happening at a blistering pace in many countries beyond these select few. To paraphrase economist Nicholas Stern, investment in climate action is the economic growth story of this century. The cost of solar power and batteries has fallen off a cliff in the last decade, down 80 per cent. Offshore and onshore wind costs are down by 73 per cent and 57 per cent, respectively. Lithium-ion battery costs have fallen 90 per cent since 2010. 

These rock-bottom prices have powered a technological revolution that is quickly remaking global energy markets. Renewables generated more electricity than coal for the first time ever in the first half of this year. The amount of installed renewable power is expected to more than double in five short years, according to the latest from the International Energy Agency. Globally, more than one in four vehicles are set to be electric this year.  

Though Trump gets most of the news headlines, there remains significant decarbonization progress within the US. California, for instance, through a combination of policy and targeted investment has increased its utility battery storage by 3,000 per cent since 2020 with much more on the horizon.

All of these data points reinforce the point that decarbonization is fast becoming the key driver of economic progress globally. That has important implications for Canada and the forthcoming climate competitiveness strategy. Strong climate policy that drives investment into low-carbon technologies that cut emissions will be crucial for the economic health of the country.

So, what should that strategy look like? There are a number of policies the federal government can implement right away to catalyze low-carbon growth. 

At the top of the list should be strengthening industrial carbon pricing across the country. Doing so will increase certainty for businesses and attract investment. It has the potential to break down interprovincial trade barriers and support export diversification. 

Building bigger, cleaner, smarter electricity grids is another no-brainer that should also be on the list. And the same goes for cutting more methane emissions from the oil and gas sector and the creation of a sustainable investment taxonomy. 

Plus, there are important policies the government should stand its ground on. The most obvious is the federal electric vehicle mandate.

Whatever the strategy includes, the focus on strong climate policy as an enabler of our nation’s economic success is the right one. A lot of the necessary pieces are already in play: now they need to be connected and strengthened.