The Biden administration’s focus on climate change – one of four immediate priorities – has clean technology leaders excited.
“I think we’re all a little giddy,” said Jonathan Rhone, chairman of the BC Cleantech CEO Alliance and president and CEO of Axine Water Technologies. “I think the stage is set.”
Biden’s climate plan is “ambitious and high profile,” said Kathryn Harrison, a political science professor at the University of British Columbia, and, if successful, it will see the largest economy in the world rejoin the Paris Agreement, move toward net-zero carbon emissions by 2050 and invest US$1.7 trillion in clean energy and decarbonization.
The plan, though not without its challenges, is expected to create clean opportunities and competition for Canada.
Addressing the former, Rhone noted that – as in 2007 and 2008 – a lot of private equity and infrastructure capital is available to support clean energy and clean technology.
In the lead-up to Biden’s inauguration, Reuters reported that investors moved US$5.2 billion into alternative energy funds in the first two weeks of January.
Last week, Bill Gates’ Breakthrough Energy Ventures – which supports innovation that moves the world toward net-zero emissions – raised its second US$1 billion round of funding.
“There’s just an enormous amount of capital,” said Rhone, “and that’s an opportunity for Canadian companies.”
The market for the clean technologies of those companies is also about to get “a whole lot bigger,” said Merran Smith, executive director of Clean Energy Canada. “The Biden administration’s been very clear what it wants, and it wants to run on clean electricity by 2035. You couldn’t ask for a clearer market signal than that. We have an abundance of renewable and clean power hydro power here in British Columbia.”
Canada’s clean-tech sector is strong, but its piece of the global market is small. Ottawa’s Clean Technology Economic Strategy Table has proposed that clean technology become one of the country’s top-five exporting industries by 2025 and that annual exports target $20 billion the same year. By next year, global clean technology activity is expected to exceed $2.5 trillion.
One of the biggest barriers to Canadian clean-tech company growth is talent, and a U.S. economy heavily focused on solutions to climate change will inevitably create more competition for it.
“Canada has had a competitive advantage over the last four years, with the previous administration in the U.S., on climate action, on clean-tech, and that’s just reversed itself. There’s going to be a significant demand for talent,” said Rhone, adding that Canada needs to prioritize attracting and training technology talent.
Smith said the country needs to invest in and support Canadian clean technology companies and support other sectors in decarbonization.
“This is a race. And yes, we have a bit of a head start, but we could easily lose that position.”
Biden’s climate priorities also carry implications for other Canadian sectors.
The U.S. has discussed a carbon border adjustment, which could more heavily tax Canadian carbon-intensive exports.
Cancellation of the Keystone XL pipeline project is “a big wake-up call” for Canada’s oil industry, said Harrison, but the implications extend beyond it.
“An interesting question, and an important one for oil and gas in Canada and British Columbia, is whether more ambitious regulations in the U.S. will put pressure on Canada to increase the ambition of our methane standards,” she said.
More generally, a United States that begins investing heavily in research and clean-tech, in retraining workers and in supporting vulnerable, front-line communities serves both as an example for Canada to follow and a challenge for Canada to meet.
“It kind of upped the ante for Canada to compete within North America by increasing our investments, and transitioning to a low carbon economy,” Harrison said.