Ottawa can’t hesitate on nuclear power
There was an awkward moment in Glasgow at the beginning of November when Justin Trudeau spoke out in favour of using nuclear energy to cut greenhouse gas emissions.
Awkward because Steven Guilbeault — his new environment minister, whom the prime minister had paraded around the global climate summit as proof that he was serious about confronting climate change — had said something much vaguer just a day earlier.
It was confusing for industry leaders and investors alike. Guilbeault, a former environmental activist with a history of opposing nuclear power, didn’t turn his back on his past. Trudeau made a point of clarifying the next day, reminding the public that every option, including nuclear, is on the table when it comes to cutting greenhouse gases.
That bubbling tension needs to be resolved if Canada is to make serious progress in moving to a low-carbon economy, and it needs to be resolved soon.
In less than three months, the federal government says it will publish its plan to cut emissions dramatically by 2030, a first step toward shifting Canada’s economy to a net-zero emissions stance by 2050.
The coming weeks will be about the “how” — and that’s really, really hard. The building blocks that we decide upon now are the ones that industry and the financial sector will focus on, invest in and develop for decades to come. Government policy — through subsidies, pricing, regulations and penalties — will be a deciding factor on which mix of energy sources will be our future.
The well-respected International Energy Agency just finished an assessment of Canada’s energy policies — the first since 2015 — and published the results this week. It says clean electricity is the key to Canada’s transition.
For now, we’re in solid shape on that front. The IEA points out that 83 per cent of Canada’s electricity production comes from non-emitting sources — mainly hydro and some nuclear. That’s expected to grow to 90 per cent by 2030.
But if we are going to cut back on fossil fuel consumption, we don’t have nearly enough electricity or other clean alternatives to make up for our insatiable hunger for energy. A massive increase in clean electricity is central to meeting the demand — a doubling or tripling of electricity from non-emitting sources, the IEA figures.
That means serious work, money and supportive politics — right now.
We’re not starting from nothing. The federal government has already committed to a netzero electricity grid by 2035 and has promised to legislate the widespread use of zeroemissions vehicles by then, too. It has also talked about working with provinces and spending money to tie together all the hydro-electric sources across the country to make an EastWest grid.
But expanding nuclear power is a key part of the mix.
“The role of nuclear energy is recognized as fundamental to achieving and sustaining Canada’s climate change goals and the technology is seen as a longterm source of baseload electricity supply,” the IEA says.
It points to small modular reactors, which Conservative premiers have lobbied for, and which form just a small part of government policy right now. But they’re in their infancy and they still require lots of innovation to make practical. More importantly from a political standpoint, they need the federal authorities to give them a stamp of approval, and likely more funding too.
There’s a similar controversy around the oil and gas sector. If Canada wants to continue to produce substantial amounts of oil and gas, we need carbon capture, utilization and storage to catch emissions before they float into the air. But purists see federal funding for carbon capture as a subsidy to the oilpatch, enabling it to continue producing when in fact it should be pulling back and switching to investments in truly clean energy.
Ottawa is about to impose a cap on emissions from oil and gas, and then reduce that cap over the years — a goal that’s a lot easier for oil and gas producers to meet if they have affordable and efficient carbon capture. The federal government has started down the road of putting tax incentives in place for carbon capture, signalling its support. But it’s not at all clear that it is all in.
This is not just a matter of different emphases within the federal cabinet. It’s a matter of how well our economy stands up over the next 30 years, as made clear by the Bank of Canada and the Office of the Superintendent of Financial Institutions in new research published on Friday.
They warned of lower economic growth over the long run, and sudden, large losses for financial institutions and investors if there’s much delay in setting out policy that pushes the private sector to transition to low carbon.
Commodity prices, which underpin much wealth in Canada, will inevitably decline, they said. And we all have a lot of work to do to get ready for that if we want to keep our prosperity intact.
“We have some time, but no time to waste,” said OSFI’s assistant superintendent Ben Gully.
The starting point is clarity and conviction from both regulators and politicians.