Canada’s House of Commons recently declared a “Climate Emergency”. This is not surprising. When one looks at progress made by government action since 2014, Canada has reduced total emissions of 723 MT by less than 1% (2017), and we have committed to reduce emissions by 30% by 2030. We had previously established a target to reduce to 17% below 2001 levels by 2020. That would make the 2020 target a little over 600 MT, a target that is now well beyond reach.
When one looks at the actions taken by government, regulation and legislation appear to have failed badly. Consider the following:
- A carbon tax is being introduced. The concept of a carbon tax won a Nobel Prize, but studies have shown that the tax must be >$200/T to be successful. Even the Parliamentary Budget Office suggested that a tax that was less than $100/T would be ineffective. Our government has committed to limit their carbon tax to be less than $50/T and they partially exempted some of the largest emitters that burn coal. This is hardly a path to success – in the short time that is available.
- The government recently gave a grant of more than $10M to a grocery chain to allow them to replace freezer systems in their stores, aimed at reducing emissions. Most of the stores included are located in provinces where electricity is either carbon free or near carbon free. Most of this expenditure will have no impact at all on emissions.
- Governments seem to believe that the only solution is to abandon all fossil fuels and convert immediately to renewables. Renewables may provide the low-cost electricity, but the intermittent nature also requires costly storage and controls that in many cases makes them uneconomic. This belief has led to significant “unintended consequences.” The Ontario government decided to implement many new wind generation facilities, and now experiences surplus capacity at night. Disallowed by government to sell at market prices below zero, the utilities have at times resorted to eliminate the surplus by reducing nuclear capacity and dumping steam from the reactors into Lake Huron. It is ironic that Ontario has an outstanding team of people that have planned and operated their grid for more than 100 years. For much of the time Ontario enjoyed the lowest cost electricity on the continent. Recent poorly informed government decisions have resulted in Ontario electricity costs now being among the highest on the continent.
- I watched the Canadian premiers on TV at their annual meeting in Saskatoon. They talked about an energy corridor across Canada, which may be a good idea, but it may also have problems. Ontario is not permitted to sell at negative prices and would expect a fair price for any surplus sold to Quebec or Manitoba where there are ample hydro facilities to store their surplus energy. BUT why would Quebec, BC or Manitoba pay for surplus energy from a neighbour when US utilities will pay them to take the energy (selling at negative prices), as happens today?
There seems to be an almost unlimited number of examples that show that government regulation has had little or no impact on emissions and often has often led to unintended negative consequences.
I am reminded of a situation from about 1900. At the time, there were more than 100,000 horses on the streets in New York, and more than 80,000 in London. The streets were strewn with horse manure; a significant health hazard. Government officials met in 1900, setting a target to reduce the number of horses by 10% before 1910.
By 1906, very little progress was reported, largely because the governments had no real plan of what could be done. In 1908, Henry Ford introduced his Model T and by 1912, almost all the horses were gone. Innovation and a disruptive technology had changed the problem to a profitable opportunity. That technology soon spread across all international boundaries.
Many years later, in 1985, Motorola sold a cell phone that was known as the “Brick.” Seeing this new technology, AT&T hired a consultant to determine the market potential for annual sales in 2000, some 15 years later. The study showed a target of 1 million phone sales, and AT&T decided to “pass” on the opportunity. But in 1996, the Li-Ion battery became available and smart phones quickly flooded the markets. By 2000, sales were over 100M units annually.
In both cases, the technology spread rapidly, with little government support or regulation, and in the case of cellular phones, they were soon available, even in the poorest countries on earth.
Climate change and carbon emissions are a global problem, and the sources are very different. The three largest polluters in the earth are China, the US, and India. Canada ranks 9th in total emissions. But the per capita use is revealing. China emits almost double the US total, but the per capita emissions are about 40% of per capita emissions in either Canada or the US. India, the third largest emitter has per capita use that is about 1/10 of the Canadian or US. It is apparent that a solution that may work in Canada and the US, may be completely unfeasible in India and other countries where population is large and individual use is small. A technological solution must be found that can be widely used and will not destroy the economy for any country. Ontario had a problem a few years ago with rural electricity rates that were very costly. Some people were faced with a choice of buying food or energy.
The current plan to eliminate fossil fuel will create very significant disruption, and potentially very high costs. Solar energy collection in Canada is heavily weighted to the April – October months, while total energy demand is weighted through the winter, almost the exact opposite of the solar energy. A battery to provide all energy needs for a solar powered home in Canada would require storage of 6-7 MWh, at a projected cost ($100/kWh) of almost $1M, including inverters and chargers. A utility that is required to use solar and has no access to hydro would have an equally impossible cost for storage. Clearly, that will not happen.
Recently we have seen new technologies appear that may have on global targets. One, announced in Calgary, was a process that reacted C02 with natural Gas (CH4). The demonstration showed that the process could be used to create carbon fibre, a strong, light material that is extensively used in new aircraft, and could become a powerful building component. Another process removed CO2 from the air and created hydrocarbons using a reaction with Hydrogen. Both concepts have very strong potential to play a large role in the future. I expect that there will be many other concepts that have real potential.
Canada and the US are countries that have a high standard of education, and many of our young people have a keen interest, strong skills, an entrepreneurial spirit, and a lot of time. The missing pieces seem to be technical support and funding. A recent study showed that a large portion of the new cleantech companies in Canada had fewer than 30 employees and the average age was under 30. With a little help, these people could become the powerhouse of a clean future.
Universities have the skillsets, and most want to support industrial research. The fit with these start-up companies should be easily accomplished. With a little help from governments, industry or other individuals to support these young entrepreneurs, it is likely that many problems could be solved.
One thing is clear. Continuing on the current path is almost certain to fail. Our electric grid currently delivers about 20% of total energy, and any dramatic reduction in fossil fuel use will almost certainly impact the existing grid significantly. We need to either find ways to deliver more energy, or dramatically increase the size and capacity of our electric grid.
Approvals for major projects now take up to 20 years to accomplish. That is far too long, given the urgency of the situation. We must harness all the skills that we have, engage and encourage the young, ambitious entrepreneurs, and focus on a single mission to do this job. The time for action is NOW.