Event Recap – Policy Crunch June 2, 2020: Energy Transition: Does a Sweet Spot Exist?

2 minute read

In the June 2, 2020 Policy Crunch, panelists Serge Dupont, Monica Gattinger and Scott Vaughn each agreed that a sweet spot does indeed exist; namely, that Canada’s energy industry can be both successful and Canada can advance its environmental objectives and meet its climate commitments.

However, all underscored the challenges.

Arguments were made that it is in Canada’s strong interest to have a heathy, viable energy sector, including oil and gas. This will be even more important as we emerge from the COVID crisis and the economic impact it has caused. Given the oil and gas sector’s economic importance and that the sector accounts for some 25 per cent of Canada’s GHG emissions, the sector has to be an important part of any climate change strategy for Canada. Not working with the sector would be economically damaging given its outsized contribution to GDP.

As well, it was noted that an opportunity exists for Canada to invest smarter as it allocates money to emerge from COVID. Those countries investing in green recovery from the 2008 recession created more jobs and recovered more quickly than those that didn’t. Additionally, there are intermediate structural changes underway with some momentum — the shift from internal combustion engines to electric, for example, and the sustainable finance work in the “greening” of financial markets. Finally, as countries allocate recovery money to sectors it should consider doing so with “green strings” attached. So, for example, if money goes to the oil and gas sector, companies should produce a clear de-carbonization plan.

If the sweet spot is elusive it is in part because it has not been defined. No clear ambitious plan has been put forward by government nor by industry on what environmental expectations might be set.

No government has chosen this path because it is hard politically.

We heard that the issue of “transition” is deeply polarizing and that opinion survey work underscored two realities among respondents in the environmental and energy sectors. The first reality is measured; GHG emissions are reduced through a diverse energy portfolio and an energy policy that doesn’t impose excessive costs on the sector. The second reality does not see a future for oil and gas in Canada’s energy mix and believe fossil fuels should be eliminated.

These divergent realities have unfortunately increasingly become associated with partisan politics. To find the “sweet spot” bridges will have to be built between federal and provincial governments. This has proven elusive but is necessary.