Five Industries Control the Fate of Atlantic Canada’s Net-Zero Targets
SAINT JOHN — The Atlantic Provinces Economic Council says governments need to address the four ‘C’s to make the path to net-zero clear for citizens and businesses: clarity, certainty, consistency, and cost.
The recommendation comes in APEC’s latest report looking at how the region can make its way to net-zero emissions by 2050.
APEC says the expense of eliminating 42 megatonnes of annual greenhouse gas emissions in less than 30 years is daunting. There must be clear rules that won’t change and that are consistent across the four provinces to minimize the cost burden.
Atlantic Canada only accounts for six percent of Canada’s emissions so it’s easy to justify not doing anything to achieve net-zero. The problem, however, is that worldwide and within the country, there is a shift coming that will make lack of action painful for businesses.
“There are clear economic risks to this region. If we don’t act, as we noted in our first report, there’s going to be pressure,” says APEC president David Chaundy. “We may not be able to sell into certain global markets. We may lose out on supply chain opportunities because companies are requiring suppliers to meet certain standards. So there’s a danger if we don’t act.”
APEC doesn’t provide the answers about what Atlantic Canada should do next but it does lay out some insight about how to move forward.
“We need consistency between the legislation and the regulations, or the regulatory framework, our regulatory bodies are operating under,” Chaundry says. He cites the examples of electrical and gas utilities that operate under regulatory boards.
“We need to make sure that those regulatory structures are aligned with the objectives, and the goals, and requirements, and policies.
“We then have federal and provincial governments all with net-zero targets. We’ve got some national policies around carbon pricing and clean emissions, clean fuel regulations. We’ve also got provinces regulating and investing and introducing policies.
“We need to make sure that those are clearly aligned for households and businesses. They just need to know what’s going to happen and how it’s going to impact them.”
Chaundry says providing a uniform framework with the same rules in all provinces will make the region as a whole easier to work in.
“Encouraging and attracting investment to the region, knowing that if a business or investor wants to invest in clean energy in one province they could invest in an adjoining province knowing that the regulatory framework will be just the same.”
Chaundy says policymakers must act now, as the ultimate net-zero target of 2050 is not that far away and the intermediate target of 2030 that some provinces and municipalities have identified is even closer. There’s also the “first mover advantage” of having the regulatory framework in place and attracting net-zero investment looking for a home.
He notes that the region can work quickly and in unison like it did creating the Atlantic Bubble during Covid-19.
However, with a major shift that involves significant expense, it’s important to not only move quickly, and move together, but also to think things through.
“There’s also a danger if we act too fast,” he says. “Newfoundland and Labrador’s offshore oil would be a great example of that.”
“If we shut down our offshore oil and there is still going to be a demand for oil for the next 10 to 20 years… that oil will likely to be produced by sources that will have higher environmental outcomes. So, globally, we have higher emissions and we have suffered a severe economic loss in this region,” he says of a potential scenario where Atlantic Canada takes an absolutist approach to net-zero targets.
“I think we have to recognize this transition is going to take time, we are not going to get off fossil fuels overnight. During that transition, there are still economic opportunities, particularly for this region to supply some of those energy needs.”
On February 22, APEC released a public report, the second in the series, entitled “Atlantic Canada’s Emissions Reduction Challenge: Navigating the Economic Risks”.
That report found that transportation and electricity generation are the largest sources of emissions in Atlantic Canada, collectively accounting for 60 percent of all emissions.
Although emissions in Atlantic Canada are decoupling from GDP, and are on a downward trajectory, the report says the region needs to pick up the pace of emission reduction to hit those 2030 and 2050 targets.
The report states that “five industry sectors – utilities, manufacturing, mining and oil, other primary industries, and transportation – account for 90 percent of Atlantic emissions. Those same industries also contribute to about half of the region’s GDP and represent about 43 percent of employment.
Eliminating emissions in these industries without diminishing their economic contribution or pushing up costs that undermine their competitiveness will be a major challenge. It will require transforming the way these industries use energy and produce output.
APEC senior policy analyst, Fred Bergman, says the electricity generation issue is one that Atlantic Canada needs to address as coal-fired and gas-dependent electricity generating plants are decommissioned or modified to achieve net-zero.
“The reality is we don’t have enough renewables or other sources of clean energy, ie nuclear, for example,” he says. “If we shut those coal plants by 2030, we’ve got to get clean energy from somewhere.”
He says that means importing it from other provinces like Newfoundland and Labrador, and Quebec, and increasing transmission capacity to allow for that import to happen.
“The potential solution to that is the Atlantic Loop Project,” he says. “Increasing transmission capacity … such that we can have greater access to clean energy imports when required, to help us achieve net-zero, close those coal-fired electricity generation plants.”
From a higher-level investment perspective, there need to be incentives for businesses to invest in clean technology. Traditional energy investments where the infrastructure and customers are all in place, have short payback periods so investors can recover their money faster.
In clean tech the payback period is longer, the asset depreciates more.
“The longer it takes, the less economic that decision is,” Bergman says. “There’s limited knowledge on green investment. This is all still relatively new for everybody households, businesses and so on.”
“This is where you need supports, regulations and whatever to kind of stimulate organizations to make these types of investments.”
Alex Graham is a Huddle reporter in Saint John. Send her your feedback and story ideas: [email protected].