What if there was a potential $7 trillion global opportunity on the table, and we just looked the other way?
Believe it or not, it’s happening. Our nation is largely sitting idle on the sidelines of a full-fledged global energy boom. Much of this opportunity lies in the roaring economies of Asia, but it is also in the United States, Europe, and elsewhere.
The good news is that Canada can capture an increasing share of this action—creating jobs and prosperity and generating critical public revenue.
I’m referring to the booming global market for low-carbon goods and services. The sector includes innovations in renewable energy and efficiency, including wind, solar, hydro, geothermal, biomass, advanced biofuels, industrial processes, building technologies, efficient vehicles, and more.
Recent research by the National Round Table on the Environment and Economy (NRT) pegs this global market today in the range of $2 trillion, and estimates Canada’s present share at $10 billion. This portion represents only 0.5 percent of the total global market, and is significantly below Canada’s relative 1.8 percent share of the overall world economy.
Under a business-as-usual scenario, even without a price on carbon, the NRT forecasts significant growth in the sector in Canada between today and 2050—with a growth rate roughly doubling that of the overall economy.
Why such a rosy outlook? To answer, just follow the money.Investors are noting a series of global trends and low-carbon infrastructure moves being made by China and many other nations, and directing capital accordingly. They get that a fundamental transformation is underway in energy systems—a move away from carbon-intensive energy commodities like oil, gas, and coal—and towards clean, safe, and locally available energy sources that will never run out.
Canada’s Stake in the New Energy Transition
At Tides Canada we call this shift the “new energy transition”, and a number of factors are driving it. Chief among these are energy security, energy poverty, and an increasing awareness of the risks and impacts of fossil fuel extraction, distribution, and combustion. Responsible countries will be putting a price on carbon, which will make alternatives to oil more affordable and attractive. There are other drivers, including shifting social norms.
There will be implications for our nation, which is growing ever more dependent upon its petroleum resources. Oil and gas, of course, provide us with mobility, heat, and may other services. The sector also employs hundreds of thousands of people, and fills public coffers with billions of dollars in public revenue that in turn funds critical social services.
What will replace those jobs and revenues when—as a result of all this low-carbon energy investment and innovation—some of our biggest customers are able to begin to reduce their appetite for our petroleum?
We need to develop a plan—a Canadian low-carbon energy strategy. Such a strategy would ensure the nation prospers and remains competitive long after global demand for our heavy oil has waned.
Though various efforts are presently underway to determine the shape and scope of a Canadian energy strategy, many do not acknowledge the imperative of deep greenhouse gas reductions as part of that plan. Our governments typically assign this responsibility to another portfolio, outside the energy domain.
For the past year, we have been consulting with a wide variety of sectors, government leaders, and civil society organizations on the shape and scope of just such a strategy.
A New Energy Future for Canada
The feedback we have been receiving from hundreds of energy leaders suggests that Canadians want low-carbon energy leadership, starting with a price on carbon. They tell us that an energy framework needs to be built around a number of key areas:
- New energy innovation
- Building livable communities
- Forward motion on transportation
- Funding the energy transition
- Cleaning up our energy supply
- Eliminating energy waste
- Jobs and prosperity
This will be an enormous undertaking. Our stakeholders are also telling us that provinces, territories, and aboriginal governments might work with civil society organizations and industry to maximize the opportunities and minimize the risks of the new energy transition.
This energy transition requires leadership. The federal government could act as a funding partner, coordinator, and partnerships broker in such a group, while the provinces, territories, and aboriginal governments step up and work together to capture an increasing share of these low-carbon opportunities.
Just as happened 145 years ago, when individual provinces came together to form our dominion, each regional government would bring its unique strengths and assets to the table. Many diverse pieces make a stronger whole, and we will not likely make the needed changes to compete as a nation in the low-carbon future unless each government sees itself as part of a larger effort to do so.
Some might call this a “radical” idea. We suggest it is the true spirit of nation building in action.
– By Merran Smith
As director of the energy initiative at Tides Canada, Merran Smith is working to help transform the nation into an energy efficient, ecologically responsible, and prosperous low carbon economy. Merran is on the board of the Coast Opportunity Foundation, and serves on B.C. Hydro’s Electricity Conservation and Efficiency advisory committee. She is a recipient of both the Wilburforce Foundation award for Outstanding Conservation Leadership and the Seasons Fund Transformative Leadership Award.