How to Finance Canada’s Transition to a Low-Carbon Economy
Insight Toby Heaps, CEO and Editor-In-Chief of Corporate Knights Magazine, discusses key steps that Canadians, in general, as well as industry and Government, must take in order to develop the foundation for a sustainable economy.
Imagine the Canada of 2025. Zero-emission vehicles putter across the country, silently saving the average person $1,500 a year on fuel costs. Homes and workspaces are warmer in the winter and cooler in the summer with a fraction of the utility bills and virtually all of our power coming from zero-emission sources that make it easier for everyone to breathe. Our fossil fuel industries are pumping out clean commodities to satisfy the high and growing demand for global customers.
That world is within our grasp thanks to advances in technology, abundant clean power and natural resources, and the can-do mentality of Canadians. But it's not just going to fall into our laps.
Currently, we're one of the biggest emitters of greenhouse gases per capita in the world and the federal government’s latest projections show that the country will be spewing 722 million tonnes (MT) of greenhouse gas (GHG) emissions in 2030, a far cry from the 517 MT goal pledged in the Paris Agreement. A more hopeful projection that includes additional policies and measures currently under development will squeeze emissions down to 583 MT by 2030.
Canada needs a basket of common-sense policies that present default choices that make life a little bit more affordable and comfortable for everyone. While a carbon tax can be helpful — to the extent that it doesn’t politically derail the whole effort — it's not really where the action is. To wit: BC’s new climate plan estimates that less than 10 percent of its GHG reductions will come from its rising carbon price.
Here are four changes that could help move the clean economy dial forward in Canada:
- Institute zero-emission vehicle mandates that require manufacturers to sell a minimum and rising mix of non-emitting passenger and freight vehicles similar to what they’re currently doing in Quebec, British Columbia, California, and China
- Implement net-zero ready building codes for new buildings along the lines of B-C’s Energy Step Code and couple them with fuel-switching incentives and turnkey financing targeted at contractors to help decarbonize and climate-proof the existing building stock
- Move the coal phase-out regulation up to 2025 from 2030, and hold auctions for renewable energy along the cost-effective lines already in place in Alberta
- Consider a public-private partnership styled after the Alberta Oil Sands Technology and Research Authority (AOSTRA) to transform Canada’s abundant natural resources — including bitumen —into the world’s biggest storefront for clean commodities
Corporate Knights research has crunched the numbers to implement these suggestions and has determined that in an ambitious scenario, these policies could catalyze an additional $36 billion of investment per year from 2019 to 2025. They would also present significant opportunities for Canada’s financial sector to develop world-class expertise in green real estate infrastructure financing and sustainable wealth management. This approach has the potential to generate billions of dollars in returns for Canadian pensioners and shareholders.
In return, Canada’s emissions would plunge to 571 MT by the end of 2025 and living standards, our GDP, and jobs would rise.
Toby Heaps is CEO and Editor-in-Chief of Corporate Knights, which acts as secretariat to the Council for Clean Capitalism.