By 2050, consumers may no longer be able to buy a gas-powered car from Toyota.
The Japanese carmaker plans to phase out petroleum-fuelled cars by then. Just as well if you live in Vancouver, because by that date, the City of Vancouver wants to be a gas-free zone, running entirely on renewable energy.
That date – 2050 – is the deadline climate scientists have set for reducing the world’s carbon emissions by 50% to avoid exceeding the tipping point in global warming.
Eliminating gas-powered cars could be good for B.C. clean-tech companies like Burnaby’s Ballard Power Systems (TSX:BLD), which makes hydrogen fuel cells, Westport Innovations (TSX:WPT), which owns conversion technology for natural-gas-powered engines, and GreenPower (TSX-V:GPV), which makes electric buses.
Moving to a low-carbon economy will be tougher on oil-producing provinces like Alberta, Newfoundland and Saskatchewan.
Read: Can we move to a fossil-free future without wrecking our economy?
As the world’s fifth-largest oil-producing nation, Canada is already feeling the negative effect of low oil prices and could be in for even longer-term disruption as the world moves towards decarbonization.
In his book, The Carbon Bubble, former CIBC World Markets chief economist Jeff Rubin says the Harper government fixated on energy, to the detriment of manufacturing, as Canada’s favoured economic driver.
The result is a Canadian dollar that has become linked to oil prices, in effect becoming a petro-currency that gained strength with high oil prices, killing manufacturing jobs in Ontario, and which has now fallen, too late for Ontario auto manufacturing plants that relocated to the U.S. or Mexico.
The question for the new Liberal government, and for Canadian business leaders, is whether Canada will be on the right side of the disruption now taking place as the world moves towards decarbonization, clean-energy proponents say.
Read: Political will needed to drive green power play
Clean-technology venture capitalist Tom Rand told last week’s Generate 2015 clean-energy conference that failure by world leaders to make the transition sooner rather than later will delay global economic growth.
“It delays doubling the size of the global economy by two years,” he said. “So it doubles by 2050, instead of 2048.”
The green economy is already worth billions and is on its way to becoming a trillion-dollar industry.
“The shift to a clean-energy economy has already started,” said Merran Smith, executive director for Clean Energy Canada. “Last year, $790 billion was spent in the clean economy. B.C.’s already on that train, but we can’t rest on our laurels.”
Goldman Sachs recently announced it is moving into clean energy in a big way with plans to increase its clean-energy investment portfolio from the $40 billion it established in 2012 (already mostly spent) to $150 billion over the next 10 years.
The United Nations Environment Program forecasts that trade in energy-efficient technologies will be worth $2 trillion by 2020. And it’s estimated that the investment in innovation and energy efficiency in traditional resource industries will be around $3 trillion.
Despite an economy that has become heavily reliant on oil, Canada has an edge when it comes to green economics, according to a number of studies.
Thanks to their abundance of hydro and wind power, B.C., Ontario, Quebec, Manitoba and Newfoundland already have utility power that is virtually carbon-free. Canada also has been a leader on the clean-energy front, and B.C. in particular has become a clean-tech leader.
But keeping that edge will require policies, such as a national carbon-pricing scheme, something former prime minister Stephen Harper warned would kill Canadian jobs and do little to reduce greenhouse gases.
A Navius Research study commissioned by Clean Energy Canada says the opposite is true and points to B.C. for its proof.
B.C. already has a carbon tax, a clean-power policy, an independent clean-energy sector and a vibrant clean-tech hub, so it’s already ahead of many other states and provinces. But B.C.’s carbon tax was frozen in 2013 at $30 per tonne for five years, so as not to put the province at a disadvantage with provinces and states that still haven’t put a price on carbon.
B.C. is now planning to update its climate action plan, and Clean Energy Canada is pushing to have the carbon tax increased.
Far from killing jobs, living up to B.C.’s climate action targets will create 270,000 new jobs in B.C. by 2025, including in traditional resource sectors like mining and forestry, the Navius study concludes.
“There’s a lot of fear mongering that climate action’s going to hurt our economy,” Smith said. “The research we did shows just the opposite.
“We found that climate leadership will pay off for B.C. We can cut carbon pollution and still create hundreds of thousands of new jobs across all sectors and grow the economy.”
Moving to a low-carbon economy would not mean creating green jobs at the expense of traditional resource sectors like forestry and mining, Smith said, explaining that those sectors have an advantage in B.C. because they already have access to clean power and already pay a carbon tax, whereas those industries will likely face higher costs in other jurisdictions as they begin to catch up with carbon pricing and cleaner power.
“In fact, climate policies are good for the forestry and mining sector,” she said. “They do well out of it.”
But what about B.C.’s liquefied natural gas (LNG) aspirations? On one hand, LNG can have an environmental benefit, if it is used to displace coal power in other countries. But fugitive methane emissions from the upstream activity are a problem, and most of the electricity to power natural gas compressors, pipelines and processing plants comes from burning natural gas. Most LNG proposals in B.C. also plan to burn natural gas for the energy-intensive liquefaction process.
“We can drive down emissions in our gas sector and make it even cleaner by electrifying the upstream, and use new technologies to stop the leaks,” Smith said. “Natural gas will be part of the transition, globally, but ultimately the solution to tackling climate change and the core of a clean economy is clean electricity.”
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