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.
UPDATE: Federal Environment Minister Peter Kent is rejecting the final advice from the National Round Table on the Environment and the Economy to embrace a low-carbon economy.
The federal advisory body lost its $5.2 million annual funding in the last budget and is using its last breath to promote a national environment-and-energy framework that would position Canada to become a global player in the burgeoning low-carbon world.
But the key step in that strategy is to set a price on carbon and the federal government will not go down that path, a spokesman for Kent said Thursday.
"The first essential condition for their plan to work is to impose carbon pricing," spokesman Adam Sweet said in an email. "Unlike (Thomas) Mulcair's NDP, we will not impose a job-killing carbon tax that would increase the cost of gas, groceries and electricity."
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."
STORY CONTINUES BELOW SLIDESHOW
Renewable energy projects require time and money to get off the ground. So if Canada intends to expand its green economy, says Robert Hornung, president of the Canadian Wind Energy Association, industry needs to have a sense of the size of the market for renewable for energy that governments want to create. In jurisdictions such as Ontario and Quebec, for instance, he says governments have done a good job of setting targets for the share of renewable energy to incorporate into the mix by 2015. But beyond that point, "the direction [...] is less clear." "It takes time to develop wind energy projects. If you're hoping that a wind energy project is going to be up and running in 2016 or 2017, you need to start working on that project in 2013," he said. "If there's no signal that there's actually going to be a market for these projects nobody is going to start doing that work."
With role models like Denmark and Germany, which have undertaken ambitious renewable energy policies with gusto, Canada needn't reinvent the wheel to become a leader in the green economy. But before looking overseas, environmentalists point to expanding what's already working within our own borders in provinces like Ontario, where the government has pledged to phase out coal energy by 2014 and create 50,000 green economy jobs by 2015. "We need more policies like in Ontario," said Tim Weis, director of renewable energy and efficiency policy at the Pembina Institute, a non-profit think tank based in Calgary. In Ontario, the sector is supported up by a feed-in tariff program that pays guaranteed prices for renewable energy, as well as subsidies for firms that manufacture renewable energy technologies in the province. But Weis says there is a need to develop a "broader and more consistent market" for green technologies. "Ontario is a big market and it's going to do well in terms of developing manufacturing capacity for wind and solar, but what we need is to expand that market to other parts of Canada so we have a bigger domestic market," he said.
What's one of the quickest ways to support the growth of Canada's green economy? Stop subsidizing the production of oil and gas, says Adam Scott, green energy project coordinator at Toronto-based Environmental Defence. At present, he says, subsidies for fossil fuel-producing sources of energy, particularly at the federal level, dwarf support for renewable energy -- which he sees as a major roadblock to advancement. "Everybody complains about why we are subsidizing green energy, but it's because we're trying to level the playing field with all these other subsidized forms of energy," he said. "Subsidizing fossil fuels really has a huge drag on the development of renewable energy." Putting a price on carbon that's consistent and country-wide would also help, says Tim Weis, director of renewable energy and efficiency policy at the Pembina Institute. "We need a market signal that levels the playing field and lets everyone know where we're going on this," he said. "It's pretty important that that happens at a national level so it's well coordinated across the country, and everyone is looking at the same picture."
Improving the energy efficiency of buildings and construction projects tends to be "the poor child" of efforts to grow the green economy, says Tim Weis, director of renewable energy and efficiency policy at the Pembina Institute. But if Canada wants to up game in the green economy arena, he says that must change. "[Improving energy efficiency] pays for itself, it has usually the fastest and the strongest bang for your buck in terms of actually reducing emissions and reducing energy, so it really needs to be at the top of the list," he said. That means developing more initiatives like the federal government's former ecoENERGY Retrofit program, which granted homeowners up to $5,000 to improve the energy efficiency of their homes by installing everything from better insulation to high-efficiency windows. The program expired at the end of last month. Though Weis says that particular program was "fairly successful," he estimates that 90 per cent of the homes in Canada could still benefit from an upgrade. "That's still a big area that we need to be working on nationally," he said.
"[The Conservative government] is always saying that Canada is an energy superpower, but they're very selective in what energy fits that bill," says Adam Scott, green energy project coordinator at Toronto-based Environmental Defence. As he sees it, getting serious about growing Canada's green economy will require federal support for renewable energy, and a national strategy for incorporating wind and solar into the overall energy mix. "Ontario is doing very well, Nova Scotia is developing renewable energy and some of the other provinces are looking at it, but without a national approach, Canadian companies are limited to [what] these local jurisdictions are doing," he said. This concern is shared by Ontario Energy Minister Chris Bentley, who says, "The world is going green." "I would have thought that every government that wants to support jobs and prosperity would want to participate in the green energy economy," he said. "I anxiously await their decision to be part of that in the future."
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 would be 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.
And with news this week of Ontario Premier Dalton McGuinty's resignation, a key proponent of switching to a green economy is leaving the scene.
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 also need to come up with new investment vehicles that would 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 electricity-fuelled 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.
"We're very proud of the work of the round table. We think we have contributed to public understanding and political insights in some very complex fields, in particular in the last few years in climate change," said Slater.
"We'd like to think the country is a somewhat better place because of it."