What Canada needs to do to become a clean energy superpower

January 31, 2013

EDMONTON, AB, Jan. 31, 2013/ Troy Media/ – Canada as clean energy superpower – it’s an alluring sound bite and one that Prime Minister Stephen Harper has used in speeches. But like a gifted but lazy student, Canada has failed to fulfill its promise.

Canada has half the population yet is just behind Germany as the sixth largest electricity generation market in the world. Germany is also is the undisputed world heavyweight champion of green energy.

While Germany is a dominant force in the clean-tech world, Canada has captured only 1 per cent of the $1 trillion worldwide market. And it’s not like we’re not trying. Canada has more than 700 clean-tech companies and has a history of being a centre of innovation.

Canada also has plentiful solar, wind, tidal and geothermal resources, the engineering know-how and the entrepreneurial chutzpah to pull it off.

The Pembina Institute recently interviewed 22 leading clean energy entrepreneurs, academics and executives and picked their brains to identify the best ways for Canada to capitalize on the global transition to clean energy. It’s findings are summarized in a new report entitled Competing in Clean Energy.

Nick Parker is a veteran clean-tech investor who frames the problem as a race.

‘It’s a race in two senses of the word. One, it’s a race against time vis-à-vis climate change. And two, it’s a race vis-à-vis the competition to create the jobs and the wealth that come with being part of the solution,’ says Parker in the report.

A new report from the National Roundtable on the Environment and the Economy draws similar conclusions. ‘The future is low carbon. Economies the world over are making the transition. Canada’s actions today on climate, energy, trade, innovation, and skills will shape its economic prosperity for decades to come,’ say the authors in Framing the Future: Embracing the Low-Carbon Economy.

For Canada to become an active participant in the global low carbon economy there are several key things Canada needs to do.

David Sawyer, with the International Institute for Sustainable Development estimates that the Canadian government could save more than $1.3 billion a year if it scraps fossil fuel subsidies.

‘It’s hard to compete when your competitors are being subsidized, basically, by society,’ says Andrew Heintzman the president and CEO of Investeco Capital, Canada’s first environmental investment company.

A big structural subsidy is the ability of fossil fuel companies to use the atmosphere to absorb immense amounts of CO2 for free. Both left-wing and right-wing economists agree that putting a price on carbon is the most effective way to harness the powers of the market to manage emissions.

Even the CEO of TransAlta, a massive electricity generator and owner of over 5,000 megawatts of coal-fired generation assets in the U.S. and Canada can see how it would work.

‘I’m an economist,’ says Dawn Farrell, the CEO of TransAlta. ‘I do not believe that you will ever make the right and most efficient decisions on how to do carbon without a price on carbon. If society agrees that the use of the atmosphere for taking up CO2 is a scarce resource, then we know that pricing resources minimizes their use.’

John Coyne is vice-president and general counsel with Unilever. He is unequivocal. “The single most meaningful thing that could be done very quickly in this country that would make a material difference in the performance of this country from an environmental point of view and immediately get the attention and the commitment of the citizens of this country is a carbon tax,’ he says.

Like ‘clean energy superpower’ the talking point ‘national energy strategy’ has been bandied about by politicians recently, most noticeably by Alberta Premier Alison Redford.

While progress has been slow and the talk has mostly focused around the oilsands and pipelines, any talk of a national energy strategy needs to incorporate thoughtful planning and integration of Canada’s massive renewable energy assets.

While Germany has embraced the clean energy economy, the question is whether Canada can do the same while still benefiting from its fossil fuel resources. Germany’s effort is focused and carried out at the national level. In Canada, energy policy comes from a mash-up of 13 disparate provincial and territorial governments, spread over a vast geographic area.

Aside from a national sustainable energy strategy and a price on carbon the report points to the need to better manage research spending, the development of policies that create demand for low carbon electricity and making it easier for energy entrepreneurs to access capital.

Troy Media columnist David Dodge is the host and producer of Green Energy Futures, a multi-media series presented at www.greenenergyfutures.ca. The series is supported by TD, Suncor Energy and the Pembina Institute.

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