Simon A. Fish is Chair of the BMO Climate Institute. Dr. Laurence B. Mussio is the chair of the Long Run Institute. They were co-chairs at the Lieutenant Governor of Ontario’s Calibrating the Climate Transition Symposium in May.
In the past month, The Globe and Mail produced more than 160 articles on climate change, featuring everything from heat waves, to class-action lawsuits, to plans for sweeping total emissions reductions in the oil and gas and agricultural sectors. A major theme has focused on the challenge of matching our climate aspirations and emissions targets to stubborn realities. In other words, the effects and trade-offs are both coming into sharper view.
The conversations unfold in what is often a highly judgmental environment generated by the perceived urgency of the moment. Many sector players dare not speak up and put themselves in the line of fire, often feeling under attack. They are therefore not as engaged as they should be.
Policy makers on the hook for big change seem to suspect business’s climate commitment – sometimes from past experience. As a result, they have difficulty understanding what business needs to get on board. That means our national conversation about our energy transition can appear dysfunctional, alternating between collaboration and confrontation.
Sometimes it takes a shock to break a dysfunctional pattern in a relationship. The shock that might reset this critical national conversation comes in the form of overlapping crises unfolding now: geopolitical conflict, economic volatility and increasingly serious climate events. At the core of each of these crises is energy: security, production, consumption and cost. This year has reminded us that our political and economic history is impenetrable without understanding our relationship to energy.
That’s because there is no other country quite like Canada from an energy perspective. We are the world’s fourth-largest oil producer, at 4.5 million barrels a day. We net export 1.9 million barrels a day. We have the world’s third-largest oil reserves, and relative to the population, our energy security is measured in centuries. Oil is a foundation of our material prosperity. It is also our biggest challenge when it comes to meeting our climate targets.
Our national narrative on the energy transition needs to unfold in a much bigger context. Canada possesses an impressive store of intellectual capital in the energy sector. Government and the industry have, together, an ability to connect deep knowledge with actionable insight in these areas. But for any serious progress to occur on Canada’s energy transition, we will need to facilitate an exchange of that intellectual capital without either side being judged in a punitive way, and away from grandstanding rhetoric.
We decided to road test this concept: The institutes we represent organized a symposium hosted by Ontario’s Lieutenant-Governor Elizabeth Dowdeswell, titled “Calibrating the Climate Transition.” We gathered a group of senior leaders in public policy, banking and finance, natural resources, renewable energy companies and scholars to step back and talk frankly about the state of play on the energy transition: where Canada’s strengths lie, and what the showstoppers are.
The following are just headlines from the discussions, but they show where the discussion led us:
- The main challenge for Canada is to achieve our climate targets in a way that preserves our national wealth. There is a dangerous pressure to divest from industries before the country is ready, and before we are in a position to do so.
- The scale of the challenge means that, as in massive national projects in the past, governments have a critical role in providing guarantees or assurances that are beyond the capacity of the private sector. A clear, consistent road map from government is required.
- The regulatory architecture of the country needs to provide certainty, and be sized to the urgency and importance of the assignment. If we have any hope of calibrating the energy transition, our major infrastructure projects cannot take 20 years to complete.
- We need to find the intersection between adapting and mitigating on the road to the energy transition.
The symposium was focused mainly on how to address these challenges and get on with the job of the energy transition. The oil and gas sector’s historic commitment to research and development, unprecedented industry collaboration and some of the remarkable technological innovations that are emerging meant there was room for optimism.
For us, the main lesson of the symposium was very simple: Changing the basis of the conversation on climate can produce actionable insight. By emphasizing frank and fearless discussion, and by connecting the question of the energy transition to a realistic but ambitious sense of the possible, we can create pathways that can give Canada a real chance at meeting its economic and climate obligations.
Think of it as creating a climate action marketplace for ideas. This marketplace would allow decision makers to combine public policy imperatives with expertise in finance, banking and enterprise. At the same time, we need to provide Canadians a clear sense of the trade-offs they will have to live with.
New times demand new narratives. The time has come for a new, truthful, clear narrative focused on how a resource-rich, decentralized federation handles the biggest long-run transition in its history. Our conversations and narratives need to be equal to the challenge.
Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.