Alberta Net-Zero Emissions Target Is Doable, But Politically Fraught: Panel
There may be no technical reason Canada’s highest greenhouse gas emitting province cannot reach net-zero emissions by 2050, but there are political obstacles that make it a challenge, according to a panel examining making Calgary a net-zero leader.
Panelists discussed a recently published study that showed pursuing net-zero emissions could contribute $61 billion in GDP to the Alberta economy and create nearly 170,000 new clean technology jobs by 2050. Every dollar of capital investment in the clean economy would yield $2.54 in GDP by 2030.
The report examined six subsectors in more detail in concluding that the transition would bring tremendous benefits to the economy
A panel at the Calgary Economic Development webinar, New Economy Live! Calgary – A Net-Zero Leader, said there are more political barriers to reaching net zero than technical ones. While Canada has a legislated net-zero by 2050 target, it lacks jurisdiction over greenhouse gas-emitting sectors like oil and gas. And Alberta, home to the majority of the sector, has rejected any emissions reductions targets. Canada won’t meet net zero if any of the provinces don’t.
Canada needs a plan
“Technically, of course it can happen. But politically, it's a lot harder to achieve,” said Jackie Forrest, executive director, ARC Energy Research Institute.
“We need a plan. And because all the provinces in Canada have a lot of power — they have power over their utilities, they have power over their natural resources — we can't have a plan that doesn't have collaboration and buy-in. And unfortunately, I think the technical problems are a lot easier to solve than those political problems.”
Decarbonizing electricity, for example, could be moved forward with interprovincial interties that could allow Alberta to export renewable power to B.C. when it’s plentiful, and import stored hydropower when it’s not. The report notes Alberta electricity is still 91 per cent fossil fuelled.
“Western Canada is the area that we do have carbon in our electricity sector. But we could solve that with big interconnects. Imagine if we could have a massive interconnect for B.C., accessing their hydro, and just using our wind and solar,” Forrest said. “Storage is already available in terms of battery storage, renewables are already relatively cheap. We could put carbon capture and storage on our natural gas generation.
“But there's massive barriers to building those interconnects. We don't want to underestimate how hard that has been, historically, and how big of a problem it is to build those massive interconnects. So we need to start working on the plan today. And I could go on and on [with examples].”
“You know, we just don't have that plan. And I think that's why it's a lot harder than it probably should be technically, because we need collaboration amongst all the provinces.”
“I think for us and for young people more globally, it's not as much a question of feasibility on a technical level as it is a necessity,” to reach net-zero before mid-century, said Meredith Adler, executive director, Student Energy. “And I do think that the IEA and others have mapped it out — it is feasible on a technical level.”
Starting in 2008 at the University of Calgary, Student Energy is a global network of 50,000 youth in over 120 different countries that seeks to empower “the next generation of leaders to accelerate the transition to a sustainable, equitable energy future.”
“What we really see needs to happen is really a bit stronger political will, honestly, to set the trajectory on where we need to go,” Adler told the webinar. “But then also more cohesion about, how are we going to work together to solve these challenges? There are so many pieces to put together, and if we're not clear on the direction and where we're going and at what time we want to land there, it just gets harder and harder to collaborate effectively on it.”
Mark Summers, chief strategy officer, Emissions Reduction Alberta (ERA), largely agreed. “I think it's feasible. We've seen various reports, and modelling simulations and analyses about how it can be done locally and globally. And the general consensus is that it's doable… It'll take a lot of work, and a lot of investment, and some brilliant innovation to make the costs and timelines more palatable,” he told the panel.
“We'll need to invest in the transformation that's required to go beyond what continuous and incremental improvements can offer. So that includes transformative technologies for existing economic activities, as well as new economic activities that are inherently compatible in a net-zero world.”
Also necessary are “strong signals from governments,” Summers said. “We need increased alignment and co-ordination across all levels of government. And finally, we need a strong understanding of the possible pathways ahead of us to continue the great analytical work that's been done — the Alberta Energy Transition study is a perfect example of what we need.”
Size of the problem
“I'm not sure that people have an appreciation of the size of the problem,” said Anamika Mukherjee, director of Innovation Gateway, Cenovus Energy Inc., noting Canada's emissions were at 730 megatonnes in 2019 and Alberta’s were 275 megatonnes, while just 28 CCUS projects operate globally.
On average it costs about a billion dollars per megatonne size of CCUS project, she said. “We talk about CCUS like it's just [an easy solution], but the largest… operating CCUS project today is actually a piecemeal project that's seven megatonnes. If you're talking about CCUS, and 730 megatonnes [to reduce], imagine the scale of carbon capture that has to happen.”
And the road to net zero is “not just a corporation problem [and] not just a technology problem,” she added. “It's a system problem that has to be dealt with. So what are you and I as consumers doing to reduce our footprint?”
If the majority of youth want net zero by 2050 or sooner, she said, they as consumers will have to “push that, and pushing that does not mean stand there, you know, with signs and shout that you want it sooner. You have to change the demand model, the demand structure.”
“You actually have to stop demanding that [emissions intensive] product and move on to something else,” Mukherjee said. “The corporations are doing what they need to do. If you want it to happen faster, you have to change your behaviors.”
As to net zero, “Yes, we have to do it. But how feasible and how practical it is,” comes down to understanding the magnitude of the problem, not creating any new waste streams along the way and acknowledging “it's everybody's problem — not just companies that have to solve the problem.”
Adler said individual actions to reduce emissions are easier said than done. “Something that we're often really losing sight of is definitely, what decisions are realistically within people's control, and in how we are designing our cities [and] different types of rebate programs that have to do with individual choices on net zero. I think all of that is very important because in Canada, and especially for the younger generations, we are really looking at some serious equity issues.”
Individual choice doesn’t build low carbon transportation alternatives, for example, and choices to buy an electric vehicle could be beyond the means of many young people. “And a lot of it honestly ties back to the housing market — many of the subsidies that you can get today, you know, relates if you have access to a garage, or if you have access to a lot of those choices that are frankly, becoming out of reach for a lot of young people in Canada.”
“Because ultimately, when the rubber hits the road, there are a lot of consumer choices to be made, but many of those choices are actually out of people's reach. And so how do we make it so that actually people can be empowered to be part of this is a crucial piece,” said Adler. “If we're looking at a cohesive energy transition, where people feel like they have been brought along and not left behind, a lot of us need to start thinking a little bit more about equity issues.”
Clean energy investment down
Asked about current investment in cleantech, Forrest said that “unfortunately, talking about momentum, it's not really a great story with energy transition at this moment. Any of the equities on the public markets are way, way down, like some are down 60 per cent, the average is down around 50 per cent.”
There are “a whole bunch of factors” for that, including inflationary and interest rates effects, small to no profits and “a lot of policy uncertainty.”
There was a lot of hype and too much expectation, for example, with a change of administration in the U.S., she said, “and then that's all fallen away… Having that Build Back Better [U.S. emissions reductions policy proposal] not go forward, potentially, in December,” caused further uncertainty, though she said, “we're hoping that we'll still get something in the U.S.”
“And then even in Canada, the Clean Fuel Standard, which is a big deal, got pushed back six months, we're still waiting for [that, and] the CCS credits, and we're hoping that there'll be credits on renewable energy as well.”
But while the momentum may have slowed, the transition will continue, she told the webinar. “I think the foundations are strong. We're going to see the energy transition grow. But there's going to be ups and downs. Those investors that lost money in the last 12 months are going to be a little shy of this area, and it may be harder to raise capital.”
Meanwhile, the upswing in the oil and gas industry gives companies an opportunity “to fund reducing their emissions. So I think that's actually quite positive.”
The funding ERA provides has been material in assisting industry to “make substantial investments about new technological innovations,” noted Summers.
Since 2009, ERA has invested $820 million into about 220 projects that, with accompanying corporate investment, represent a total of investment of $6.6 billion. “In the ESG investment world, actions speak louder than words,” he said. “Some dollars do get noticed by investors and helped to sort of create an upward trend in our favour.”
He added, “We're nothing without the innovators and entrepreneurs and forward-thinking industry operators out there. I say this because $6.6 billion invested into climate innovation for Alberta for innovative climate solutions is a big deal. And it's a reflection of the upward trend of innovation in Alberta for addressing climate change.”
He pointed to one other barrier “around public perception and public discourse because climate change, just like a lot of other topics, is unfortunately polarized and rife with misinformation. When things become polarized, especially in the public discourse, keeping the momentum up can be a big challenge. And, you know, the solution is never to shout louder than someone who has a different opinion or a different perspective, but find productive ways to engage.”
And he responded to a question about why Alberta should move to cut emissions faster than other less developed nations. “The reality is, if we can find solutions that improve the economy, improve quality of life, and by the by they also lead toward net zero, then I think it ends up being a win-win scenario. I think it's still a worthwhile endeavor regardless.”
And Forrest said she wasn’t surprised by the report’s positive conclusions: “I've always known that pursuing the net zero for Alberta's economy and Calgary's economy would result in a better economic outcome than not.”
But it still leaves the challenges of getting there, which she summed up as access to capital — especially for smaller companies and earlier stage entrepreneurs — the risk adverse nature of business in Canada and “policy uncertainty is a massive one.” There remains uncertainty over the federal carbon tax, as “Alberta still wants to fight it,” she said, such that companies may not incorporate it into their planning. “We've really got to get the policy a lot clearer.”