Collapsed prices, a looming recession, calls for a development moratorium, halting federal action on emissions – the oil sands are under pressure on many fronts. In coming days, contributors will offer views on how Canada's energy sector can move forward in a changing world. Today: renewable energy.
Alan Bernstein is president and CEO of the Canadian Institute for Advanced Research. Dan Trefler is a CIFAR senior fellow and J. Douglas and Ruth Grant Canada Research Chair in Competitiveness and Prosperity at the Rotman School of Management. Ted Sargent is director of CIFAR's bio-inspired solar energy program and is university professor at the University of Toronto in the Edward S. Rogers Sr. department of electrical and computer engineering.
The recent commitment by Group of 7 leaders to eliminate fossil fuels by 2100 should be applauded. But a statement made at a G7 meeting is just that. The world's demand for energy will double over the next 50 years. As Prime Minister Stephen Harper said, "Nobody's going to start to shut down their industries or turn off the lights. We've simply got to find a way to create lower carbon-emitting sources of energy."
We need policies and programs to turn the G7 statement into actions, and Canada should lead the way in stimulating the research and innovation needed to develop clean, renewable energy. We can't afford to sit back and wait for it to happen. Our country is already on the sidelines as Washington decides whether we can participate in world markets to sell our oil and gas. Unless we move boldly, we risk being shut out of the growing market for renewable energy.
How do we secure Canada's place as a global leader? Here are four immediately actionable recommendations:
Remove subsidies and tax carbon
Subsidies for existing energy forms are subsidies for the status quo. Innovation happens when government policies encourage change. Our huge advances in computing and communications technology didn't come from subsidizing vacuum tubes. Recombinant DNA technology and the powerful new drugs it made possible didn't come from subsidies for bovine insulin. Instead, our high-tech and biotech sectors resulted from public investments in research that have created new industries and hundreds of thousands of jobs.
A carbon tax is also needed. Older technologies that contribute to climate change should be taxed, not subsidized.
New technologies to smooth the transition
The world is heavily dependent on fossil fuels; the transition to a carbon-free economy will take decades. During this period, the government should promote new technologies that mitigate the effects of fossil-fuel extraction. There should be subsidies for energy-conserving technologies, such as LED lighting and smart appliances, and incentives to develop improved wellhead, pipeline, rail and shipping technologies that reduce oil spills. We could also push for integration up the supply chain that mixes oil with renewables, for instance, through carbon offsets.
Clean-energy challenge fund
Canada should invest some of its energy income and kick-start a $1-billion global clean-energy challenge fund, pushing other countries and the private sector to increase that sum toward $10-billion. Administered by an international body, the fund would support the research and innovation necessary to move the planet into a new era of clean energy.
The world's scientific and engineering communities should be encouraged to work together. The Canadian Institute For Advanced Research (CIFAR) recently launched a new international program called bio-inspired solar energy. CIFAR's goal is to hack photosynthesis and discover what nature has figured out about harnessing energy from the sun through 3.4 billion years of evolution.
The program, made up of leading scientists from Canada, the United States, Israel, Britain, Switzerland, the Netherlands and Hong Kong, shows that talented and enthusiastic researchers are eager to do this kind of work.
Make renewables accessible
Nearly three billion people use coal or biomass to light and heat their homes and to cook. Because these homes are typically small with poor ventilation, there are very negative effects on the inhabitants' health, education and productivity. Constructing energy grids to bring electricity to distant villages with low population density is unrealistically expensive. Here, the experience with cellphones is relevant: Africa leapfrogged over Canada's aging telephone infrastructure and went straight to mobile. Energy in Africa and most of China and India will similarly come from off-grid technologies, such as solar power.
Humanity's sources of energy are great signposts of civilization. Over the past 30,000 years, we have used wood, biomass, coal, hydroelectric, oil, gas, nuclear and now wind and solar. Our species has this unique ability to discover and innovate.
Mr. Harper has challenged our political, business and scientific communities to show the leadership we need to move the world from carbon-based to sustainable energy. By doing so, Canada will provide opportunities and purpose for young people, create economic growth and help stave off global warming. A perfect trifecta.