By focusing on fossil fuels, Canada is missing a tremendous opportunity to capitalize on clean energy technology, according to a new report from the Pembina Institute.
Through both a review of recent literature and one-on-one interviews with 21 of the country’s “clean energy leaders,” the report, entitled Competing in Clean Energy: Capitalizing on Canadian innovation in a $3 trillion economy, exposes the financial cost of the federal government’s overwhelming emphasis on the short-term profits provided by oil, gas and shale.
Interviewees include Nick Parker of Cleantech Group, who admits he finds it “difficult to not be acerbic or negative when it comes to how Canada ranks in the clean energy race.”
What are we missing?
As world leaders move to make the changes necessary to comply with the Copenhagen Accord which aims to limit global temperature rises to two degrees Celsius, they are increasingly looking for options to cut down on carbon emissions and move to renewable energy sources.
“Yet much of the focus of leaders in government and business has been on Canada’s abundance of raw fossil fuel commodities — from oilsands to shale gas and coal — and the opportunity to generate prosperity by exporting these resources.”
Thus far, the Canadian government has favoured a “go slow” approach to energy innovation, “betting on a slower emergence of a low-carbon economy, and a reluctance to impose additional costs on domestic industries and consumers to address a global problem [climate change].”
This has left us behind in the lucrative field of energy innovation. Although Canada is one of the top research and energy development funders in the world, our rate of funding as a percentage of GDP is presently less that the peak in 1984. Furthermore, poor coordination and short-sited funding have left us in fifth place in terms of clean energy inventions behind Korea, Germany, Japan and the United States.
The report shows that aiding in the global transition toward clean energy is not only a moral imperative, but also a potential windfall for Canadian businesses, as well as an excellent way to create new jobs for Canadian workers.
“With more than 700 companies, the cleantech sector has emerged as a major driver of innovation and employment growth in Canada, investing almost $2 billion in research and development and seeing an 11 per cent increase in employment between 2008 and 2010. Yet Canada currently captures just one per cent of the $1 trillion global clean technology industry. It is estimated that, as this industry grows to a projected $3 trillion by 2020, Canadian clean technology companies have the potential to increase their market share from today’s $9 billion to $60 billion.”
What can we do?
The report outlines three opportunities for the Canadian government to encourage growth in the clean energy entrepreneurship:
• Improve access to capital to keep emerging companies from falling into financial “valleys of death” before they are able to bring their new technologies to market. Chief Environment Officer of TD Bank Karen Clarke-Whistler provides advice on what the government could do to make banks more “comfortable” with supplying much needed financial resources to clean energy companies which tend to be high risk and have high capital needs.
• Create a national energy strategy that would focus hitherto poorly distributed funds. Many interviewees, including Tom Heintzman, co-founder and CEO of Bullfrog Power, suggest using fossil fuel resources to fund clean energy research, thus aiding in the smooth transition to sustainable technology.
• End preferential tax treatment for fossil fuel production and begin to figure the real cost of greenhouse gas pollution into the price of carbon-based energy. Dawn Farrell, CEO of TransAlta, encourages us to see the atmosphere that takes up CO2 emissions as a scarce resource and then price that resource to encourage more efficient use.
It concludes that if the federal government can go the way of some provincial governments and shift its focus away from the development and sale of fossil fuels, this country is, “well positioned to compete in the field of clean energy technology, creating jobs and economic prosperity across the country.”
Image Credit: Green Energy Futures on flickr.