Jatin Nathwani is the founding executive director of the Waterloo Institute for Sustainable Energy and currently leads the research cluster STEM for Global Resilience at the Balsillie School of International Affairs. Ann Fitz-Gerald is the director of the Balsillie School of International Affairs at the University of Waterloo.
Conclusions emerging from the UN climate conference in Glasgow are stark, clear and compelling – alarm bells are ringing, red flags are up, and the tide is going out. Moving away from the use of fossil fuels will now become the dominant narrative of a fundamental economic transformation.
The time has come for a national conversation to sculpt an energy future for Canada that is no longer dependent on the oil and gas sector. This is a tall order given the deep penetration of fossil fuels in all aspects of our lives, the economic value they deliver and the potential for an adverse impact on national unity.
One option is for the government to set up a non-partisan, expert-based commission to detoxify the climate debate and create a space for an open discussion, with full civic engagement, to create a future with zero dependence on fossil fuels within three decades.
A commission with a broad mandate, like the Macdonald Commission of the 1980s, which studied Canada’s long-term economic development prospects, is necessary to address the emerging national challenges around good governance for economic prosperity, enhanced environmental performance and a just and equitable transition.
In hindsight, many would agree that the Macdonald Commission served Canada well. Notwithstanding the fate of its specific recommendations, the major contribution of the commission was largely collective self-education: to step back from the political process and take a long view, to contribute to a different perspective, general criteria and broad principles to guide future policy decisions. The climate threat, in its scope and scale, is unprecedented, with implications for both national security and national unity.
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Without understating the large and meaningful contributions of the Canadian oil and gas sector to our economic well-being, the bittersweet truth is that new capital investments in this sector will decline and the influence of oil and gas in the energy supply mix – nationally and globally – will wane. Two key factors are at play: the global compact on limiting greenhouse gas emissions and the emergence of clean technology options.
Technological disruption is a ubiquitous force underlying the shift to electric vehicles that spells demand destruction for oil within the next decade or two. A suite of clean energy technologies is getting embedded in all aspects of our lives, from energy for comfort to smart information and communication technologies changing how we work, play and sustain our communities.
The wealth-creating potential of clean technologies will draw investment capital toward higher returns and away from the legacy assets of the oil and gas sector. Increasing penalties on carbon emissions and a strong public consensus on the protection of our environment for global sustainability cast a dark shadow on the sector.
Predictions of the demise of the sector are pointless, but a credible scenario is emerging that will render large portions of its assets not economically viable, stranding fossil resources in the ground. This gathering storm means only one thing: Canada’s fossil resources and existing operational assets will not be worth what they are today, their economic value declining dramatically over time. In our view, finer adjustments to the carbon tax do not address the fundamental challenges of restructuring the entire economy away from the use of fossil fuels.
For Canada to get to a zero fossil fuel economy, we need to chart the course for an economic transformation with urgency. A full, wide-ranging discussion of Canada’s place in the world is necessary, enlarging the scope of debate to address concerns such as Arctic sovereignty and control over navigable waters. Although an unforeseen outcome of the climate threat, northern issues will gain central prominence.
A commission with a broad mandate could help shape the ensuing debates on national security and foreign policy, together with the threat of climate change, for a resilient future – one that ensures the protection of our territory and the defence of our population.
With experts already predicting a climate-related punch in Canada’s Arctic, the country must demonstrate both preparedness and the ability to respond. Without them, we cannot defend against these primary security threats; and without being secure, we put at risk our sovereignty. Canada must be economically prosperous to be secure from these and other emerging threats.
To avoid any further inflammation of the political discourse on the climate file, one low-decibel option is an independent, expert-based commission to examine all the related effects of a transition to net zero. There is merit in stepping back from an acrimonious political process and taking a long view to guide future policy decisions for a truly resilient economy.
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