The world is undergoing an energy transformation. It is the start of a necessary shift away from the fossil fuels we depend upon today for mobility, heat, and other services, and towards clean, safe, renewable, and locally available sources that will meet the majority of our energy needs indefinitely. This clean energy transition won’t happen overnight, but it is also closer than many of us believe. In the coming few decades it will unleash profound changes in how citizens live, work, and move. Compared to many European countries and communities, we do not see a great deal of evidence of the energy transition in Canada.
Coal and oil still keep the lights on across much of the Maritimes, while in the western provinces petroleum resources dominate the economy, enabling mobility, home comfort, and hot water for millions both in Canada and abroad.But look beyond our borders and the signals are clear that a change is underway––one that could have profound implications for our nation:
- In 2010, worldwide private capital investments in renewable energy ($187 billion) surpassed electricity investments using natural gas, oil, and coal ($157 billion).
- Last year, the global market for clean technologies reached $1 trillion.
- All told, more than 3.5 million people are now employed in the global renewables sector. China already counts over half a million renewable energy jobs, while in Germany the sector employs more than 370,000. The U.S. solar industry now employs more than 100,000 people.
- Though China’s energy demand is growing, it is steadily working to reduce its petroleum dependence. According to one recent Chinese government estimate, the nation will spend $313 billion in the oming five years to grow a low-carbon economy. The nation expects to spend $27 billion this year alone to promote energy conservation, emission reductions and renewable energy.
- Demand for gasoline remains flat and data suggests younger Americans appear to be losing interest in driving. From 2001 to 2009, the average annual number of vehicle-miles travelled by young Americans dropped 23 percent. The country is even questioning its interest in further reliance on heavy crude oils.
- In the third quarter of 2011, U.S. companies secured 599 patents for technologies in solar, wind, hybrid/electric vehicles, fuel cells, hydroelectric, tidal/wave, geothermal, biomass/biofuels and other clean and renewable energy technologies––the highest total since 2002. (In the same period, Canadian companies secured 10 patents.)
- In spite of the debt crisis troubling parts of the European economy, Europe continues to invest in clean energy. The region met its 2010 renewable energy targets, and is on track to exceed its 2020 targets by 20 percent. Almost 70 percent of new electricity generation installed in Europe last year was renewable
- Australia, South Korea, Mexico, California, and a variety of other jurisdictions and regions have either implemented or are poised to introduce economy-wide carbon pricing regimens or comprehensive climate laws.
The preliminary NRT research identifies a global market for low-carbon goods and services in the range of $2 trillion, and estimates Canada’s present share of this market at $10 billion–in the same range as the Canadian Clean Technology Coalition estimate. This portion represents only 0.5 percent of the global total market and is significantly below Canada’s relative share of the world economy of 1.8 percent.
The NRT analysis also estimates that even under a business-as-usual scenario, significant growth will occur in Canada’s low-carbon goods and services market between today and 2050, with the sector’s growth rate roughly doubling that of the overall economy.
The question is: How will we respond?
We suggest that Canada can and must secure a larger share of the global market for low-carbon goods and services. We can and must leverage the economy Canada has today to create the clean energy economy that citizens and customers want and will need tomorrow. Canada has a strong entrepreneurial spirit, a history of innovation, a wealth of renewable resources including wind, solar, hydropower, and geothermal, a stable financial system, an established clean-tech sector, and excellent research orientated universities. Canada also has a number of established clean-tech hubs and renewable-energy manufacturing capacity in several provinces, enabled by supportive policy environments.
Canada also has globally significant oil and gas reserves. Today, the fossil fuel sector employs hundreds of thousands, and helps fund schools, hospitals, and more, across the country.
Fossil fuels will likely remain at the centre of our energy system for some years to come. However, we suggest that the traditional energy sector has an unbeatable opportunity to help ensure the nation competes and prospers in a world that, through innovation and regulation, will have sharply reduced its appetite for carbon-based energy commodities. Canada needs to
invest in policies and programs to move these low- carbon new energy opportunities forward.