Net-Zero Regulations Could Cost Atlantic Canada $1 Billion
SAINT JOHN — Jurisdictional and regulatory issues need to be ironed out before Atlantic Canada can properly invest in its 2050 net-zero targets, a new APEC report says.
The new report is the third in a series on Atlantic Canada’s journey to net zero.
“Jurisdiction is not always clear-cut, and we really saw that take place when carbon pricing was taken to the Supreme Court of Canada,” says report author and APEC senior economist Lana Asaff.
“Alberta challenged whether the federal government could implement the fuel charge within their province and all provinces across Canada. The Supreme Court of Canada had to come out and say, yes, the federal government is able to do that, it’s allowed.”
A constitutional challenge could be a way forward for a number of other murky jurisdictional issues as the provinces are forced to provide guidance for achieving their net-zero goals. If targets are going to be hit, action needs to be taken soon.
“I think we might still see some of those challenges coming to various courts. If there’s some back and forth between the provinces, the federal government and municipalities that [they] don’t agree on.”
Even moving full speed, the net-zero goals still remain out of reach.
“We’re only really going to be able to get 75 percent of the way to net zero with the current technology that’s being considered and developed,” says Asaff. Those technologies include small modular reactors to create nuclear power, hydrogen production as a new cleaner fuel, and carbon capture to lessen the impact of emissions from traditional energy production.
Transitioning to net zero is estimated to cost the country, as a whole, $125 billion to $140 billion by the 2050 deadline. Current investment rates are about $15 – $25 billion per year from both the public and private sector.
Clean Fuel Regulations alone are estimated to knock $1 billion out of Atlantic Canada’s GDP by 2030, due to a number of factors including:
- Higher fuel prices, as fuel suppliers pass on at least some compliance costs to customers;
- Expected reduction output for sectors that rely on these fuels in production processes;
- Expected lower uptake of electric vehicles and low-carbon fuels in the region, so individuals and businesses will be stuck paying the higher cost of fuel.
The projected fuel credit market could help offset some of these pressures, but again, the region is expected to have fewer opportunities for clean fuel credit creation, although hydrogen creation through carbon capture, utilization and storage technologies could provide some offsets.
In a region with a significant rural population and few transportation alternatives, the destiny of the fuel market will have a major impact on how Atlantic Canadians do business and live their lives.
Electricity generation and transportation are two of the major emitting sectors identified not only in this report, but in previous net-zero reports by the organization. The carbon footprint of buildings is also an important factor that will need to be addressed.
But it’s also going to be expensive, even with federal and provincial assistance for retrofits.
There are an estimated 41,100 homes that need retrofit in the region, and just over 2,000,000 square metres of commercial retrofits that need to be done to hit those targets. The estimated cost of these upgrades is $1,470,000,000.
With all these bills to pay, and a lack of clarity on the rules to get there, the targets become more and more difficult to attain with each passing day.
“I think the overall message that we’re trying to deliver with this report is that Atlantic businesses and households really do need greater clarity on government net-zero plans, so that they can make the timely and informed decisions to get us to the net-zero goal in 2030, and then ultimately, the goal in 2050.”
Alex Graham is a Huddle reporter in Saint John. Send her your feedback and story ideas: [email protected].
Editor’s note: this story was last updated on March 10 at 10:51 am.