Conclusions and recommendations for a Canadian energy strategy

Below is a summary of the study’s Conclusions and Recommendations. You can download the full summary, the full Conclusions and Recommendations or the full study via the links on the right.

 

Based on the present analysis and commitments to reduce emissions, recommendations for a more sustainable Canadian energy strategy include the following:

  • A major focus on reducing consumption. Implement energy conservation and efficiency measures and incentives to the maximum extent possible.
    This includes aggressive infrastructure improvements, building retrofits, enhanced building codes, mass transit and higher efficiency in all end uses. Reducing consumption will maximize the effectiveness of investments in renewable energy, and will minimize overall expenditures on new energy supply and the inevitable economic costs and environmental impacts of developing it.
  • A major focus on renewable energy with incentives, but with an understanding of its limitations in being able to provide a complete switch-out for fossil fuels at the current levels of consumption. This includes the intermittency of solar and wind and backup requirements, and the ecological and economic consequences of new large hydro dams. Geothermal energy for space-heating to displace fossil fuels should also be an important focus.
  • A phase-out of fossil fuel subsidies to provide incentives for reducing consumption and for ramping up renewables. Fossil fuel subsidies were reported by the International Monetary Fund to be $US1,283 per person in Canada in 2015 (mainly due to the external costs of climate change, local air pollution and congestion, but also including pre-tax subsidies, foregone consumption tax revenue, accidents and road damage).* This amounts to $US88 per tonne of carbon dioxide or $US324 per tonne of carbon emitted (without a phase-out, total subsidies would amount to $US1.151 trillion or $C1.457 trillion from 2016 to 2040). A carbon tax that is considerably higher than the one currently implemented would provide a mechanism to more accurately cost the environmental externalities from fossil fuel combustion.
  • Recognition that Canada is a well-explored petroleum province and remaining recoverable oil and gas resources are finite. They consist mainly of energy-intensive oil sands and unconventional gas, the extraction of which is responsible for a major portion of Canada’s greenhouse gas emissions and significant additional environmental impacts.
  • A realization that ramping up oil and gas production is a non-starter if Canada wants to meet its emissions-reduction targets. Increasing production while attempting to meet emissions-reduction targets are conflicting goals, and the reality of having to limit production growth must be faced.
  • A realization that the nature of oil and gas production is to extract the most economic resources first and leave the lower-quality, higher-emissions and higher-environmental-impact resources for last. Canada’s oil and gas resources remain a valuable backstop should renewable sources prove to be insufficient. Selling off the best of Canada’s remaining non-renewable resources at low prices, with minimal and declining returns to the public, compromises future energy security.
  • A realization that although oil and gas production is important to the Canadian economy, it is a relatively small component. Oil and gas will be required at some level by Canadians for the foreseeable future, so the industry is not going away, but plans to aggressively ramp up production for export are misguided and severely compromise emissions-reduction objectives and long-term energy security. They amount to a sell-off of the highest-quality portion of remaining resources at rock-bottom prices.
  • A realization that radically increasing hydropower, which would require building dozens more large-scale hydropower dams, as assumed in some of the scenarios in Canada’s mid-century strategy, is unlikely to happen, for ecological and economic reasons.
  • A realization that ramping up nuclear energy generation by several-fold, as assumed in some of the scenarios in Canada’s mid-century strategy, is also unlikely to happen for economic, environmental and fuel-supply reasons.
  • A realization that the low net-energy gains of biofuels as a replacement for fossil fuels make them a marginal substitute, and that the initial emissions of biomass burning are equivalent to burning coal.

Canada faces some very difficult choices in maintaining energy security while meeting emissions-reduction targets. Current scenarios, such as those in Environment and Climate Change Canada’s mid-century strategy, are highly unlikely to deliver. In developing a viable plan, all energy options must be assessed in terms of availability, scalability, cost, environmental impacts and alternatives. This report provides an objective assessment of Canada’s energy options as a foundation for the development of a viable and sustainable long-term energy strategy.


* International Monetary Fund, IMF Survey : Counting the Cost of Energy Subsidies, July, 2017, https://www.imf.org/en/News/Articles/2015/09/28/04/53/sonew070215a

 

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