It’s getting increasingly difficult to keep track of the catastrophic weather events that have hit Canada over the past couple of years. In 2021, there was the heat dome in British Columbia, which killed well over 600 people and sparked a wildfire that destroyed the town of Lytton; the so-called atmospheric river that unleashed mass flooding in the province’s interior; and a freak hailstorm in Calgary. Last May, a wall of heavy rain and high winds—an event known as a derecho—ravaged large swaths of Ontario and Quebec, generating four tornados and killing at least 11 people. Four months later, Hurricane Fiona slammed into Atlantic Canada, knocking out power to hundreds of thousands of customers and leaving more than 30 dead. Countrywide, total insured weather-related losses for both years totalled more than $5 billion.
And that’s just in Canada. In 2022, damage from extreme weather events cost the United States US$165 billion—and that doesn’t take into account the human toll. By 2100, the UN’s Intergovernmental Panel on Climate Change (IPCC) estimates damage related to climate warming of 1.5°C above pre-industrial levels—the goal we’re all supposedly aiming for—will hit US$54 trillion. If we reach 2°C in warming, the cost rises to US$69 trillion. Again, that doesn’t account for the inevitable loss of human and animal life due to intense storms, fires, flooding and famine.
Yet Canada—and, it must be said, the vast majority of developed nations—have spent much of the past three decades spinning their wheels in the global race to slash carbon emissions. According to Canada’s Sustainable Finance Action Council, or SFAC—a group of finance professionals appointed by Ottawa—we need to spend $115 billion more a year than we are today to have any hope of hitting net zero by 2050.
And even that goal now seems naive.
In March, the IPCC released its most recent assessment of the climate crisis and what must be done to slow the impact. The report is scathing. The world, it says, is on track to blow past the 1.5°C goal sometime in the mid-2030s, which means the next decade is critical. “We are at the tip of a tipping point,” UN Secretary-General António Guterres told the IPCC when it released the report. But he also said it’s not too late to act, and he urged developed countries like Canada to move faster, aiming to hit net zero by 2040, not 2050.
We all know what the fixes are: shift away from fossil fuels, invest heavily in renewable energy, electrify the economy, construct buildings using the most efficient technology, and protect and build back ecosystems. But the job is made harder when long-term solutions are undercut by short-term crises. Russia’s invasion of Ukraine showed how reliant the world still is on fossil fuels. Europeans struggled to heat their homes and run their factories when President Vladimir Putin shut off the gas to the continent. The rest of us suffered through energy price spikes.
Even so, climate change remains a problem to be solved collectively. The fight will be costly and force changes to lifestyles and livelihoods, not least in an economy like Canada’s, which is highly reliant on natural resource extraction and exports of high-carbon commodities, including oil and gas. Those industries have provided decades of prosperity, and that makes a shift away from them hard for some of us to contemplate.
Legions of engineers and entrepreneurs, however, see it as the largest economic opportunity since the computing revolution. Canadians are working to position the country as a leader in carbon capture, utilization and storage; critical-mineral extraction for electrification; renewable energy and power storage; alternative fuels; and all the software and artificial intelligence needed to run those systems.
Along with investors both inside and outside Canada, they’re looking to fill that $115-billion gap in annual spending needed for us to achieve our stated climate ambitions. SFAC, the group of finance professionals who calculated the shortfall, has authored the country’s green taxonomy—a catalogue of green investments and technologies that fit within the energy transition category. It’s meant to be a made-in-Canada approach for giving investors comfort that any money they direct at solving climate-related problems will be spent effectively, and not squandered on greenwashing schemes or projects that will lock them into years of carbon emissions.
If the blueprint works, it would go a long way toward making up for Canada’s long and sorry record dealing with the carbon conundrum.
Ah, the memories. In 1992, then prime minister Brian Mulroney’s Progressive Conservatives set a goal to stabilize CO2 emissions at 1990 levels by 2000. They rose. Jean Chrétien’s Liberals signed the Kyoto Protocol in 1997, and Parliament ratified it five years later, showing how serious the country was this time about helping solve a growing problem. Under Kyoto, Ottawa committed to cutting emissions by 6% from 1990 levels between 2008 and 2012. There was back-patting galore.
What the program lacked was any real action plan. Over that period, the Alberta oil sands underwent an unprecedented development boom, and Canadian emissions increased by 30%. Before the deadline arrived, then prime minister Stephen Harper pulled us out of the agreement in 2011. The Harper government had set a new bar: Under the 2009 Copenhagen Accord, the country pledged to reduce emissions by 17% from 2005 levels by 2020. But that, too, soon proved overly ambitious.
Again, it was reset time. Call it “Canada Gets Serious About Climate Change 4.0.” Prime Minister Justin Trudeau signed onto the Paris Agreement in 2015, along with 194 other countries. That accord commits us to hitting the net zero finish line in 2050. For good measure, Trudeau set an interim target to reduce emissions by 40% to 45% below 2005 levels by 2030.
But Canada is off to a late, and slow, start. From 2015, the year the Trudeau Liberals took office, emissions were down 4% in 2021, according to the EU Emissions Database for Global Atmospheric Research. But they rose 2.7% from 2020 as the economy began to recover from the pandemic.
A 2021 report by federal environment commissioner Jerry DeMarco lamented Canada’s poor record on emissions reduction, noting it was the worst in the Group of Seven. That club, of course, includes the U.S., and former President Donald Trump bid adieu to the Paris Agreement. Under current commander-in-chief Joe Biden, America is not only back in the fight, but Biden has kicked it up several notches with his Inflation Reduction Act. That legislation is Washington’s largest-ever climate change–fighting campaign, committing US$369 billion over 10 years to renewable energy, electric vehicles, carbon capture and other green tech. Canadian cleantech executives also see it as a clear competitive threat.
It doesn’t spell hopelessness for Canada, though. Critics who deride any action on climate often quote our smallish 1.5% contribution to global emissions. They say it’s really up to major economies like China and the U.S. to make major reductions. But that argument is defeatist. After all, on a per-capita basis, we’re the highest emitters in the world, according to the federal government. Herein lies another big opportunity: Technology invented here to improve that record can be exported, giving Canada an outsized impact on reducing emissions worldwide.
SFAC’s taxonomy is among the developments that bode well for Canada’s efforts to retool for net zero. So is carbon pricing. Although late to the game, Canada’s system aims to send the pricing signals necessary for companies and investors to direct capital to emissions-cutting projects. Under the schedule, the price is slated to rise to $170 per tonne by 2030 from $65 today. (Alberta was actually a leader on pricing, establishing a carbon tax on large emitters a decade and a half ago.)
Would-be investors want assurances that future governments won’t enact policies that threaten carbon price certainty for their projects, especially carbon capture initiatives, a technology seen by some as a bridge to a low-carbon economy. In the 2023 federal budget, the government announced such guarantees.
Another step in the right direction is the move to regulatory requirements for companies to disclose their emissions, now being designed by such bodies as the International Sustainability Standards Board, which will inform Canadian policies, and the Office of the Superintendent of Financial Institutions. With the latter, Canada’s banks and insurers will have to start disclosing all three scopes of emissions starting in 2024, and provide details of how they’re accounting for climate risk. (Scope 1 emissions are those from their own operations, Scope 2 are from the energy they purchase, and Scope 3 are from companies and projects they finance, and from end use of the goods produced.)
What the rules don’t require are specific targets for phasing out investments and lending to high-carbon sectors, and that’s to the chagrin of environmental activists. They say financial institutions can’t be serious about the energy transition while still financing the fossil fuel sector to the tune of tens of billions of dollars. The Big Five Canadian banks are among the top 20 financiers to the global oil and gas industry, according to the Rainforest Action Network. The banks contend they serve a better purpose by keeping energy companies as clients and helping them in their decarbonization efforts. The jury is out on that contention.
Perhaps the biggest dislocation caused by any shift to net zero will be in the labour force, and that’s something all governments have to grapple with. According to the Canadian Climate Institute, as many as 800,000 jobs in sectors such as oil and gas, mining, heavy industry and auto manufacturing will be vulnerable to disruption if Canada can’t attract the capital needed to transform its industries. Those sectors account for almost 70% of exports, and generate more than $300 billion in export revenue and investment annually.
The institute conducted that research before Biden’s Inflation Reduction Act. Canadian cleantech execs and investors worry the range of incentives in that legislation could divert capital to the U.S. Canada must pick its strengths and develop policies to show how we’ll thrive as energy and industrial systems evolve.
The Trudeau Liberals’ March budget took a shot at battling the competitive threat, with $20.9 billion in tax credits aimed at clean electricity, hydrogen and cleantech manufacturing. It also expanded eligibility for tax credits for cleantech adoption and carbon capture.
Ottawa isn’t short on advice on what to do. It has formed many panels of experts—including executives, academics and environmentalists—to provide recommendations on industrial strategy, cleantech competitiveness and net zero policy. The trick now is putting the advice into action, while keeping the peace with the provinces and high-emitting sectors that are demanding taxpayers foot much of the bill for carbon capture and other technologies. The Pathways Alliance, the coalition of major oil sands producers that has pledged to get to net zero with their Scope 1 and 2 emissions, is among the most vocal calling for public funding, saying it will support a workforce needed to mobilize to build a massive carbon network. The industry says Canada’s barrels should be the last ones on the market in a decarbonizing world, but its critics argue that’s a refusal to envision a wind-down of the fossil fuel era.
Meanwhile, despite frequent demands from investors and regulators to improve disclosure, Canadian companies have the worst record on disclosing targets among G7 countries when it comes to emissions reductions (according to CDP, formerly the Carbon Disclosure Project). Those countries collectively are on a path for a global temperature rise of 2.7°C, based on targets disclosed by their companies. Taken alone, Canada’s corporations are on a trajectory to a rise of 3.1°C, CDP said.
Still, there’s reason for optimism. It’s clear Canada has done more to wrench the economy to at least point itself in the direction of net zero than it did in past failed attempts. Alberta, for instance, is undergoing a multibillion-dollar boom in wind and solar power development, funded almost entirely by corporate and private investors. Mining and manufacturing companies are laying the groundwork for a Canadian EV supply chain, including battery components and auto parts. But there are still numerous tough choices to make on how to get to net zero without sending the economy into a tailspin, and not wasting time and money on ineffective projects and policies, or leaving Indigenous communities out of the equation.
The risk with the energy transition is that it gets bogged down by the belief it can be all things to all people. Activists see the shift as a necessity that must be accomplished in under a decade. Pro-oil types would prefer the shift be open-ended, with a way to maintain production of fossil fuels.
What’s needed now is a combination of expertise, political will and buy-in from players in the game—scientists, companies, various levels of government and the public. Each now has a different idea of how to get to net zero, so there’s plenty of debate to come. But it took Canada 31 years to get to a starting point. Now it has even less time to reach the destination.
Mark Carney, UN Special Envoy for Climate Action and Finance, and co-chair, Glasgow Financial Alliance for Net Zero
As the past year demonstrates, the current global energy system is unreliable, unaffordable and unsustainable. Russia is using energy as a weapon in a horrific war. Families face crippling energy bills. In developing countries, the grind of energy poverty worsens. And to avoid the most catastrophic impacts of climate change, the world must keep three-quarters of fossil fuels in the ground. We need a new clean-energy system.
How we get there matters. We can’t just flip a green switch. To keep our lights on, heat our homes and create good jobs for our kids means ramping up clean sources of energy—wind, solar, hydro, nuclear and hydrogen—and producing the right fossil fuels during the transition. In both respects, Canada can lead.
The fossil fuels the world uses should be the lowest risk, lowest cost and lowest carbon. Canada is a beacon of reliability. Thanks to the dedication of our workers and the ingenuity of our engineers, our costs of production have become very competitive, and we can eliminate the net emissions from the production of our energy. That will take enormous investment and focus. But it will be worth it to create a new clean system that works for all.
Getting to net zero requires a transformation of our economy on the scale of the Industrial Revolution at the pace of the digital transformation. We need to deploy the energy technologies that are already competitive at huge scale and, in parallel, drive down the costs of solutions for “hard-to-abate” sectors such as steel and transportation. To finance it, we need a financial system that takes climate change into account. All are in prospect.
Three-quarters of emissions come from the final direct demand for energy. To get on the right path, the world needs to electrify as much as possible, and convert electricity generation to clean energy by tripling clean-energy investment. Canada has a head start as more than 80% of our electricity generation is zero-emission. Over the next decade, we must close the gap and grow our grid by 15%. If we do, Canadians will get cleaner, more reliable power, our businesses will become more competitive, and Canada will be a destination for investment. /Interview by Jeffrey Jones
Quadruple cleantech spending
Catherine McKenna, Chair of the UN’s High‑Level Expert Group on the Net-Zero Emissions Commitments of Non-State Entities, and former Canadian minister of environment and climate change
The science says we can’t just talk about 2050. We need to reduce emissions by half by 2030. And the International Energy Agency has been clear that means no new fossil fuel infrastructure. That doesn’t mean you stop everything now. But you can’t just say you’re committed to net zero and only be reducing your emissions intensity versus your overall emissions.
We can’t even talk about 2050 without talking about what we’re doing right now, because we will blow through the goal that the world, the people who signed up voluntarily for these targets, agreed to—limiting warming to 1.5°C. So you just need to scale the investment to clean. There needs to be $4 for every $1 going to fossil fuels, with no new investments in fossil fuel infrastructure. That’s just the math and the science and the facts that I want everyone to focus on. In the Canadian context, I don’t know that we’re clear enough about what’s required, because people are saying they’re doing something, but they’re not. I don’t want to be Debbie Downer—the flip side is, we want good jobs, we want our economy to grow. We want to have cleaner air and cleaner water. And so I think it’s about winning. /J.J.
Accelerate everything everywhere all at once
Tom Rand, Managing partner, ArcTern Ventures
Sure, we could keep all fossil fuels in the ground, but we won’t. Perhaps it’s physically possible, but it’s certainly not socially, economically or politically possible. A better question is, how much can we leave in the ground? The answer had better be: most of it.
Getting to net zero by 2050 is the hardest thing humanity’s ever tried to do. Ever. It’s more complex than the Manhattan Project, more challenging than the moon landing, more daunting than the Cold War. It’s certainly possible: The tech is largely invented, the capital sits in pension funds and money market accounts, and even the political side has flexed its muscle—watch the world respond to the U.S. Inflation Reduction Act. But it’s really hard because we waited so long. The emissions drop-off is crazy steep. Like USSR-collapsing steep. So how do we get there? Accelerate everything everywhere all at once. Take risks. Try like your kids want you to. And don’t stop.
Stop innovating, start implementing
Julie Segal, Senior manager, climate finance, Environmental Defence
One thing is obvious: Canada’s economy still uses a lot of hydrocarbons. We can transition from A to B very quickly, though, by scaling up renewable energies and investing for energy efficiency. Trying to ignore the growth capacity in renewables and storage would be a short on human ingenuity that’s already been demonstrated in those green sectors. We won’t turn off the taps overnight, but whether you’re guided by morals, science or looking at long-term investment stability, your guideline is still the same. Oil sands production must phase out under a managed transition within one single decade, and production cannot be increased. The future is green, and Canada can move beyond an anachronistic economy if we choose to.
Leading scientists have confirmed the technology exists for low-emission energy systems, and liquid capital is available to redirect from old to new. We just need to get at it. The sectors with the opportunity and the need to reduce emissions are transportation, buildings and energy—they represent more than 60% of Canada’s emissions. The key to climate action at this point is implementation, not innovation.
Canada has targets and plans for all other economic sectors, but we need rules to help the financial sector align with the goal of limiting warming to 1.5°C. Most financial institutions still put more money into emission-intensive industries like oil and gas than into climate solutions. Climate finance from the private sector has increased by over 60% and still, three to six more times investment is needed in both mitigation and adaptation. /J.J.
Swap coal with natural gas
President, Carbon Infrastructure Partners
In the last century, the human population grew from 1.8 billion people to eight billion. How we got all those people is because of additional energy derived from fossil fuels, and that drives our food system. A loaf of bread is essentially natural gas and diesel. It’s a delusion to think some new software or green hydrogen is changing a relationship that’s existed for a century. Renewables on their own do not have the necessary energy density. The population would have to shrink.
Coal is roughly 40% to 45% of the problem. So how do you get rid of coal? Well, the biggest example of any nation reducing its emissions is the U.S., and it did that by moving coal out of the electricity mix in favour of natural gas. The good thing is, the Earth has an incredible quantity of natural gas, so we don’t have a resource problem. Then you have to abate the natural gas use through carbon capture. You don’t have to sequester it all. You could turn it into different chemicals and products and fuels. But directionally speaking, a significant increase in natural gas with carbon capture and storage and carbon management, alongside vast expansions in renewables and nuclear, is how you could meet growing energy demand and get to net zero. /J.J.
Go deep (literally)
Senior director, cleantech climate programs, MaRS
We’re going to need clean electricity—no more coal, no more reliance on natural gas. Some provinces, like Ontario, are putting big bets on nuclear. But in other regions, particularly out West, there’s a lot of untapped potential for geothermal power generation, where you’re taking existing skills in the oil and gas sector and shifting them to drilling holes in the ground to tap into the Earth’s heat. Canada is one of the only nations on the Pacific Ring of Fire that has not commercialized geothermal. There’s a bit of upfront risk and costs, but it provides baseload power that generates electricity 24 hours a day. So we need policies to support that early kind of exploration.
We could also do a better job of leveraging offshore wind, which would allow us to electrify things and to generate clean hydrogen, which can be used to reduce our reliance on natural gas for heating, diesel fuels for heavy transportation and jet fuel for airplanes. Hydrogen is going to be key, but it has to come from clean electricity.
How do we get Canada to net zero? A good start is to just stop subsidizing the oil and gas industry. When an industry that’s making record profits is telling the government it can’t move forward on carbon capture projects without subsidies, we need to say no. And yes, those sectors create a lot of jobs. But if we put a lot of effort into geothermal and all these other areas, that creates jobs, as well. There’s going to be a transition, and it’s going to be painful for some people. But we gotta start putting a plan in place, rather than having to abruptly do it when there’s no choice. /Interview by Susan Nerberg
Let go of growth
Tim Jackson, Professor of sustainable development at University of Surrey, U.K, and author of Post Growth: Life After Capitalism
Net zero, on its own, is a bit of a distraction, because the way climate change works is about the burden of carbon in the atmosphere. How much more can we put into the atmosphere before we reach these tipping points—1.5°C, 2°C, 2.5°C and so on? We’ve got about seven or eight years’ worth of carbon to burn, or about 400 billion tonnes a year. At that rate, we would run out of carbon to burn by 2030. That tells you how long we’ve got to make the changes. This requires a major shift in our production and supply chains, and in our lifestyles. We need to decarbonize our electricity completely. It’s an enormous structural challenge to our economy.
There are two problems. One is that we can’t create technologies we hope will one day offset all the carbon emissions coming from our growth fast enough at the rate the economy is growing. So we may have to slow down the economy for the technology to catch up, particularly over the short term. The other is, we can’t necessarily do it all through technology. But we could do it through structural shifts to sectors that are essential for our well-being, like health care and education. You could call it the care economy—a shift toward a less materialistic, less energy-intensive, more employment-intensive economy. That economy doesn’t deliver the same kind of growth the production-based, extractivist one does.
We have to remove the blinkers about the importance of the so-called free market, which has never been free and has never been a proper open market. We have to be thinking in the same terms as during the pandemic, which was an experiment in a post-growth, non-capitalist economy. And that saved us from much worse mortality rates. There are aspects of the capitalist system that have benefited only a minority of people, while damaging relationships with workers and decimating the planet. Ultimately, capitalism is incapable of responding to the scale of the crisis. It fails to deliver a decent vision of what it means to be human. /S.N.
Look in the mirror
Eli Enns, Co-founder and CEO, Iisak Olam Foundation
Confucius said, to put the world in order, you must first put the country in order; to put the country in order, you must first put the family in order; to put the family in order, you must first cultivate your personal lives. And to cultivate our personal lives, we must first set our heart straight. There’s a direct connection between our inner world, the values and beliefs that manifest through our thoughts, words and actions, to creating the world that our children and grandchildren will inherit from us. So fundamentally, climate change at a global scale can be routed back to a way of seeing the world—a dangerous paradigm that sees the world in disconnected pieces. In my Nuu-cha-nulth language, Hishak Ishtsawak means “everything is one, and everything is interconnected.” And it’s through that paradigm that we look at solving problems.
There’s no simple solution to the climate crisis. Certainly electric cars aren’t going to be the solution, because it’s going to lead to different types of environmental problems. The solution is in the way we form and develop our communities and our society—our values. And when you have different values driving your thinking and behaviour, it’s not just about how much money you can make in the next quarter; it’s about what’s going to happen 500 years from now. You come up with fundamentally different decision making. That is going to be the determining factor. /S.N.
Form a united front
Priti Shokeen, Head of ESG research, TD Asset Management
We’re still quite dependent on fossil fuels and related products, so if we just left it in the ground, it would be very chaotic in the short to medium term. Think about transportation, the import and export of groceries and food, the basic needs. With any economic rationale, when you have insufficient supply or availability of one particular commodity, the price is going to go up. So we can see significant inflationary effects. We can see, essentially, a grinding halt to a lot of the economic activity as we know it.
We need political will to be able to provide a regulatory and policy framework for all players to be on board. And we certainly need all actors, including industry, government and civil society, organized around net zero pathways. It is going to take a couple of decades at least. The companies we engage with are working on solutions, while trying to balance the pressures they’re facing from an economic and shareholder-return perspective. But to get to net zero, I think everybody needs to be aligned and not politicize climate change. /J.J.
Involve Indigenous peoples
Sharleen Gale, Chief, Fort Nelson First Nation, and chair, Deh Tai LP and First Nations Major Projects Coalition
Our nation of roughly 800 members has the three biggest gas basins in the northern part. We’ve seen the impacts of climate change and of industrial extraction, from which our people have never benefited. In my community, $12.6 billion has left our territory with minimal amounts coming to our nation. So for all of us to be successful in terms of net zero, we’re going to have to involve Indigenous peoples at the forefront. As a country, we’ve prospered on oil and gas production. So I think there needs to be a balance between nuclear, other projects, and oil and gas, because some Indigenous communities have little choice in terms of their economic opportunities. We have this important goal of supporting economic reconciliation, so you can’t just have the government say, “We’re not going to invest in oil and gas anymore.”
Fort Nelson First Nation is really doing our part. We’ve found a partner to develop a plant that will provide wood pellets to Europe to help get them off coal. And right now, we’re developing one of the first-of-its-kind geothermal facilities in Canada. We’re already talking about financing, and we’re negotiating energy purchasing with the province, because we want to power the whole Fort Nelson area. That will take us off the gas-fired electricity grid. So this is a good opportunity to generate clean power that we could also trade. And it’s done 100% with our people. /S.N.
Capture the carbon
Alex Pourbaix, Executive chairman, Cenovus Energy
When you think about it, we have been growing the renewables business for three or four decades, and it’s only reduced the percentage of energy delivered by oil and gas by about 1% over that time. This transition goal I hear people talking about is going to take a very, very long time. At the Pathways Alliance [the oil sands industry coalition], recognizing that we’re going to need oil for decades, we really had a view that the right thing was to focus on decarbonizing our barrels. It really doesn’t matter if the world is consuming 50 million barrels a day or 100 million barrels a day; I would make the argument that the preferred barrel should be the decarbonized Canadian barrel.
Our goal is to reduce emissions from our industry by 22 megatonnes by 2030, and a large share of that is going to be from carbon capture. It is a technology that we feel is largely perfected. It has been in service around the world and in Canada. We think the challenges we’re left with are easily manageable, and it’s something we can deploy in very short order. Then there are some other projects in the next 10 years—things like fuel switching, at Suncor, for example, replacing their petroleum coke as a fuel in their facilities with cleaner-burning fuel. As we move into the ‘30s and ‘40s, we think we’re going to start seeing the perfection and implementation of the next series of emission reduction technologies, like small nuclear reactors, greater use of hydrogen and direct air capture. But all of those are technologies that need time. /J.J.
Take a holistic approach
Pat Carlson, CEO, Kiwetinohk Energy
In Canada, we produce 17 billion cubic feet of natural gas a day, and if that were converted into electricity, it could produce enough for 10 Alberta power grids. That’s just natural gas. Everybody likes renewables, but the problem is that they’re not dispatchable, and they can’t be reliable.
At the individual level, we can improve the efficiency of the things we do—we can switch to smaller vehicles or ride bicycles. At the corporate level, we do the same thing. We need to reconfigure our plants so they are more efficient. We change out our gas-fired pumps and fuel generators to electrification. That’s the easy stuff. When we get through that, we can convert from coal to natural gas, which has largely been done in Alberta. We can go from natural gas generating equipment that’s 30 and 40 years old and not very efficient to plants that are much more efficient and still provide energy with a much smaller footprint. People talk about switching coal in China to LNG from Canada. That’s another important thing we can do. Those kinds of things make a big difference. It’s a global problem, and every CO2 molecule has the same impact regardless of whether it’s emitted here or in any other country. /J.J.
Capitalize on cleantech
Stuart Bergman, Chief economist, Export Development Canada
Climate change is not a distant what-if scenario; it’s here. The consequence is that in less than 30 years, if the world fails to prevent this unprecedented warming, global GDP could fall by as much as 18%. So we’re paying for it one way or the other. And the window to act is closing quickly.
Accelerating the action to get to net zero could have positive benefits for the economy, and that’s something that gets lost. The implied investment here is in the $1-trillion to $3-trillion range every year. My shop looks a lot at country risk, and access to clean and affordable power is an increasingly important strategic consideration, both at the commercial and residential level. This is an area where Canada’s cleantech sector could find considerable trade and investment opportunities.
Still, it’s important to be clear that the energy transition is not about completely transitioning away from hydrocarbons. Currently, there’s no single renewable energy source or combination of sources that can replace hydrocarbons. In Canada, renewable energy currently provides less than 20% of total primary energy supplies. Given the increasing demand for natural gas, where imported gas could displace more carbon-intensive coal and oil, and given that Canada is the world’s fifth-largest producer and sixth-largest exporter of natural gas, I think we’re very well positioned to play a leading role in supporting this transition. I understand that is a little contentious, because it’s not completely clean. But from an environmental perspective, CO2 emissions per unit of energy produced from gas are about 40% lower than coal and around 20% lower than oil.
Canada has 13 of the top 100 most innovative cleantech firms in the world. Our companies are well-placed to capitalize on many of these new opportunities, given global demand for innovative solutions. There’s always more that can be done to encourage access to capital for small to medium-size innovative companies, and to help protect startup IP. Because you can’t commercialize or capitalize on what you don’t own. /S.N.
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