How Canada can Clean Up by Investing in Clean Energy
Author — Dan Woynillowicz Category — Carbon, Electricity
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In the first part of this series, we explored how Canada could benefit from changing its tack on energy and climate. Specifically, we recommended that Ottawa show up as a constructive participant in global climate talks and support provincial leadership on clean energy and carbon pricing; we also encouraged Ottawa to make better use of the carrots and sticks it has available to expand clean energy and cut carbon pollution.

This post explores three remaining actions Ottawa could take to rewrite its reputation and position Canadian companies and citizens to prosper in a world embracing cleaner energy systems and technologies. There’s clear evidence the global clean energy revolution is well underway — the question for our new federal government is just how much skin Ottawa is prepared to put in the game.

#3: Use Energy More Efficiently and Use More Renewable Electricity

While the previous federal government didn’t appear to give much thought to how it might decarbonize Canada’s economy, let alone meet its 2020 or 2030 climate targets, a group of Canadian researchers fortunately have done just that.

As part of an international research effort that will be tabled at the Paris climate negotiations this December, the Low Carbon Pathways Group of Carbon Management Canada has produced Pathways to Deep Decarbonization in Canada. As the report notes, “fuel switching to decarbonized electricity is the single most significant pathway toward achieving deep emissions reduction globally.” In other words, ditching fossil fuels in favour of clean, renewable electricity is our best tool in fighting global climate change.

And the same is true for Canada. What does this look like? First, we need to use energy much more efficiently. Second, we need to rely far more on solar, wind and hydro and a lot less on coal and natural gas to power our lives (and use carbon capture and storage where we do consume fossil fuels). And third, we need to replace fossil fuels with clean electricity. Rather than filling up with oil, we would drive electric cars. Electric heat pumps, not natural gas, would keep our homes warm in winter.

In each of these areas, the federal government can play a critical role in guiding Canada down the low-carbon path by regulating, coordinating and collaborating with other levels of government and industry.

The Liberals have acknowledged this role and the opportunity, promising to shift subsidies from fossil fuels to “new and clean technology”, provide funding to expand both large-scale and community-level renewable electricity generation, support energy efficiency in product manufacturing and building retrofit programs, and add electric vehicles to its fleet. While the scope of each of these commitments remains to be seen, they’re on the radar (for a change).

#4: Walk the Talk on R&D, Innovation and Data

The path from resource-driven prosperity to becoming a modern energy superpower for Canada is wrought with challenges, but thankfully the Mowat Centre based at the University of Toronto’s School of Public Policy & Governance has given it some thought. In its report, Smarter and Stronger: Taking Charge of Canada’s Energy Technology Future, future prosperity is determined by Canada’s ability to do “more than just taking things out of the ground and selling them around the world.”

But how?  

To start, Canada must become a global leader in energy technologies, forging the tools to drive efficient production and use of energy, reduce environmental damage, and develop breakthrough technologies to support new sources of low-carbon energy.

Canada also needs to take a more comprehensive approach to energy research and development programs. This can’t just happen on the national level — the provinces need to participate to maximize effectiveness and support commercialization. Further, Canada needs a national energy strategy (and we are halfway there), with energy technology as its centrepiece. While it’s true that the nation’s premiers did introduce an energy strategy earlier this year, the previous federal government was thoroughly disengaged from the development and implementation of it, and the strategy provides scant details on how it would foster clean technology innovation.

Pursuing innovative R&D requires good data on who, how and where Canadians produce and consume energy. For all we have heard about the energy sector’s critical role in our economy, you might fairly assume Canada would have an independent and impartial agency like the United States’ Energy Information Administration (EIA).

But we don’t. The EIA “collects, analyzes, and disseminates independent and impartial energy information to promote sound policymaking, efficient markets, and public understanding of energy and its interaction with the economy and the environment.”

What might a Canadian equivalent look like?

Researchers at the University of Calgary’s School of Public Policy have developed a thorough, well-constructed proposal for a Canadian Energy Information Organization. Far from an ivory-tower exercise, the proposal includes a structure, staffing and organizational plan, and a five-year budget that would be shared across the federal and provincial governments.

It may not be a sexy, election platform-type initiative, but it’s long overdue.

#5: Make Clean Energy a Trade Priority

Clean energy isn’t just about renewable electrons and fuels, it’s about the technologies and services that enable their production, distribution and use. It’s wind turbines, solar panels, biofuels, energy efficiency software, green buildings, electric vehicles and smart grids.

In 2014, the global market for the clean energy sector technology and services sector was CAD$790 billion — nine per cent bigger than in 2013. For early-mover economies such as Germany, China, and the United States, it’s proven a significant generator of wealth, employment, and public revenue. Canada’s share last year came in at CAD$7 billion, or just under one per cent of the global market. Since 2005, Canada has dropped from 14th to 19th place in clean technology exports, of which clean energy technology is a subset.

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Given the size and potential of the global clean energy market, the federal government must lower barriers for Canadian firms keen to export low-carbon innovations, services and know-how. This pie is growing larger, but our share is small and getting smaller.

Recent history clearly illustrates the bias towards natural resources. When Indian Prime Minister Narendra Modi visited Canada in April, our federal government could have profiled Canada’s solar energy sector and the role it can play in helping India achieve its objectives. India’s ambitious solar targets have created massive potential for solar companies up and down the supply chain, and Canadian companies see India as a tremendous opportunity. But while the federal government emphasized Cameco’s $350 million uranium deal, it turned a blind eye to the fact that more than $1 billion of the $1.6 billion of agreements and announcements from Canadian and Indian companies made during the visit were solar power deals.

What to do about it? Ottawa must make the clean energy sector a trade priority. Back in 2009 the United States established the Renewable Energy and Energy Efficiency Export Initiative, a model we’d be well-served to adopt and adapt north of the border.

For their part, the Liberals have promised to provide more training on clean technology for trade officials and dedicate trade missions to promoting the sector’s growth. Not a bad start, but clearly more will need to be done.

The Path Forward

As we count down to the climate negotiations in Paris at the end of November, it’s clear the citizens of the world are becoming more attuned to the realities of climate change. With a new government in Ottawa and a clear mandate from voters, it’s time for Canada to hit refresh on its climate reputation and clean energy ambitions.

The good news is, that change is already well underway. Within Canada, British Columbia is developing the next iteration of its climate plan, Quebec just announced the results of its fourth successful joint carbon-credit auction with California, Ontario is working through the details on a cap-and-trade system that intends to link up with North America’s largest carbon market, and Alberta is developing a new climate change strategy.

For economies — like ours — that have traditionally been built on resource extraction and fossil fuels, the shift towards a cleaner, more diverse and resilient economy undoubtedly presents challenges. But it is also rife with opportunity, and those who learn to navigate those challenges successfully will have the advantage over those who resist the transition.

While many provinces are already taking a lead on tackling climate change, there remains an essential role for the federal government in coordinating, collaborating with and supporting these provincial leaders. With a firm majority and a clear mandate, the Liberal government faces an historic opportunity to restore Canada’s credibility as a climate leader, and grow our share of the global clean energy and technology market.

The five steps we’ve outlined here would set Canada firmly on that path.


Produced with writing and research support from Sarah Petrevan, Senior Policy Advisor for Clean Energy Canada. To see Part 1 of this series, please see A Clean Energy Agenda for Canada.

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