Canada’s low carbon strategy: a $236-billion decision
The National Round Table on the Environment and the Economy says failure to act will cost Canada dearly
OTTAWA—Low-carbon goods and services are the way of the future, and Canada had better embrace that fact or expect to lose its competitive edge, says the National Round Table on the Environment and the Economy.
The federal advisory body lost its $5.2 million in annual funding in the last budget, and is using its very last breath to design a national environment-and-energy framework that would position Canada to become a global player in the burgeoning low-carbon economy.
“The future is low carbon. Economies the world over are making the transition,” its final report states.
A low-carbon economy is one that shifts away from today’s heavy carbon intensity to one where greenhouse gas emissions are a far less intense.
“Canada can only gain from this. But that is only part of the story. Canada will inevitably need to cut carbon emissions across traditional sectors of the economy.”
After consulting with 150 experts and crunching numbers, the round table says that failure to act would cost dearly.
Companies and governments about have to shell out $87 billion over the next 30 years, mainly because industry is locking in an unacceptably high level of greenhouse gas emissions that will eventually have to be undone.
Canada’s already-fragile reputation among exporters for its climate change policy and oilsands emissions would only get worse.
“The economic risks of inaction are too significant to ignore,” the report states.
The benefits of concerted action on the carbon front, on the other hand, are handsome, the report shows. Canada could capture a market share worth up to $149 billion a year if governments and businesses get their act together.
That’s no easy feat.
For one, governments need to set a price on carbon in order to give businesses the stability they need to invest fearlessly in sustainable development, said Robert Slater, interim chair of the advisory group.
But Ottawa has adamantly rejected any attempt to price carbon, aggressively labelling any such idea as a “tax on everything.” While some provinces are going ahead without Ottawa, they have had a rough time collaborating on a common way forward, with talks for a pan-Canadian energy strategy now in limbo.
The politics of low carbon are difficult and the business case is weak unless governments have a solid, dependable strategy for climate, energy and innovation, said Slater.
Business also has work to do.
Financial institutions need new investment vehicles that allow far wider participation in financing low-carbon projects, Slater said.
In order for Canada to cut its greenhouse gas emissions by the targeted 65 per cent below 2005 levels in 2050, annual investment of between $13 billion and $17 billion is need.
Electricity is central. About 85 per cent of that funding needs to go towards the “electrification” of economic activity, and building the infrastructure required to produce more low-carbon electricity, the report states.
That would mean doubling the amount of financing that the electricity sector gets now, targeting hydro and nuclear energy, but also better use of electric cars.
But a low-carbon economy does not imply stifling the oilsands, the report stresses. Rather, it means finding better ways to cut emissions and increased investment in emissions-reduction technology such as carbon capture and storage.
“Canada needs to move now,” the report stresses. “Although Canada can continue to benefit from the extraction and sale of unconventional crude and other energy-intensive resources, Canadians should not take them for granted. A transition plan—a low-carbon growth plan—is required for the long term.”
The round table’s members were named by the Conservative government, but the group has pushed gently against the government agenda for years. It has designed a carbon-pricing regime for Ottawa despite Prime Minister Stephen Harper’s resistance to such talk. And it has warned repeatedly that the current plan to reduce emissions is not nearly aggressive enough.