Businesses Need Regulatory Certainty To Meet Net Zero By 2050
HALIFAX– A clear framework to guide businesses down the path to net zero is what’s needed in the crucial months ahead, according to APEC’s latest report entitled “Implications for Atlantic Canada’s Economy in the Pursuit of Net Zero Emissions”.
“There’s a lot of shifts going on… and we don’t have all the technology in place right now to make all of them, so that’s one of the bigger challenges we have,” says APEC senior researcher Patrick Brannon.
“A lot of these investments have a long return on them,” he says, citing 20-plus year lifespans on natural gas and electricity generating facilities that are accounted for when the initial investment in them is made. “A lot of those coal plants that are in Nova Scotia and New Brunswick have life still on them so we’re losing the value of those assets when they shut them down.”
“That’s why Nova Scotia Power and Emera are concerned about the clarity of those regulations. If they’re going to make those investments they really have to know what’s ahead….That’s why we want to have a clear regulatory framework.”
In its report, the organization identified four important aspects of relationship Atlantic Canadian businesses and residents have with energy, including energy production in the region, energy consumption in the region, energy security, and energy affordability.
The economic impact of energy production varies wildly from province to province. From 32 percent of provincial GDP in Newfoundland and Labrador, due mostly to the offshore oil sector, to six percent in New Brunswick, and just one percent in PEI, which almost exclusively imports its energy. In Nova Scotia, the contribution of the energy sector dropped from 7 percent in 2000, to 2.4 percent in 2021 due to the closure of the Dartmouth Imperial Oil refinery and the end of natural gas production. The sector accounted for approximately 14,000 jobs in Atlantic Canada in 2019.
The organization expects about $4 billion to be spent on major energy projects across Atlantic Canada in 2023. And then there’s the Atlantic Loop, a series of transmission lines that would connect the eastern provinces and help fill in each other’s energy needs. The federal government declared that it would make a resource commitment to the Atlantic Loop by June, but that has yet to materialize.
That leaves the provinces alone to grapple with their own energy security plans during the transition.
“We do need that baseload, and for peaking, so the energy security piece is something that we have to be really careful with. And not just for electricity,” he says.
“When we look at climate change and those types of things that can impact our systems over the next couple of decades, we need to have more resilient infrastructure. “There’s a lot of investment that has to be made …and it will have an impact on energy costs.”
Whatever path the Atlantic provinces take to try to meet net zero goals, the journey needs to start soon to meet 2030 and 2050 deadlines. Small modular reactors, hydrogen projects, or potential natural gas development to bridge the gap must get underway in order to meet the impending energy needs.
The one thing that government could do to make the decisions easier would be to provide certainty to businesses about the investments they are making to reach net zero, Brannon says.
“We’re heading towards 2050 timelines but we could see changes in government that could shift those priorities, so there’s lots of challenges for companies to make big investments on the path to net zero if there’s uncertainty.”
Alex Graham is a Huddle reporter in Saint John. Send her your feedback and story ideas: [email protected].