Contributed by Robert Lyman © 2020. Lyman’s bio can be read here.
The Trudeau government has made the financing facility providing loans to large employers affected by Covid-19 conditional on the companies’ signing certain covenants. One covenant would require the firm to publish annual reports indicating how it will contribute to achieving Canada’s climate commitments under the 2015 Paris Agreement and the goal of net zero carbon dioxide emissions by 2050. The government also has indicated that it will tailor Canada’s economic recovery from the coronavirus to its vision of a “Green and resilient” model, even where that stands in sharp contrast to the natural resource-based and energy intensive industries that have led Canada’s economic development in the past. Rarely, if ever, in the past have governments conditioned their economic assistance on demands for adherence to environmental policy goals. These goals, however, only make sense if they really contribute to a global transformation to a “decarbonized” economy.
What if the world is not on a decarbonization path?
The Parties to the U.N. Framework Convention on Climate Change have been meeting to set emission reduction targets since 1990, thirty years ago. None of the targets has ever been met. Prior to the COP21 Conference in Paris in 2015, the Parties submitted plans indicating how they would reduce emissions in the period to 2030. They were supposed to submit updated commitments this year, but only seven countries have done so up to now. Carbon Action Tracker, a non-governmental organization that monitors countries’ performance, reports that, of the world’s ten largest emitters representing 78 % of global emissions, only the European Union may meet its commitment. The goal of “net zero” emissions was added later, after the Intergovernmental Panel on Climate Change in 2018 published scary claims about what would happen if global temperature rises exceeded 1.5 degrees Celsius. This inspired declarations of a “climate emergency”.
In the meantime, according to the British Petroleum Statistical Review of World Energy, the world’s energy consumption and resulting emissions are trending exactly opposite to the U.N.’s goals. Over the last decade, emissions rose 12%, and were accelerating until the coronavirus hit. Demand for oil and natural gas is at its highest level in history. Natural gas demand is growing three times as fast as renewables demand measured in energy-equivalent terms. Contrary to the general perception in the media, coal remains the largest source of power generation, and its use is rising very quickly in China and India.
Canadians are led to believe that all this will change because of a virus or because this time the U.N. will have its way. That is not, however, what the most authoritative sources of analysis on future energy trends are saying. Notably, the U.S. Energy Information Administration (EIA) recently published its projections to 2050. In its reference case, the EIA projected that GDP in non-OECD countries will increase by 150% between 2018 and 2050, compared to less than a 50% increase in the OECD.
Consequently, the EIA projects global carbon dioxide emissions to grow, not decline. Indeed, it projects global emissions to increase from about 35 billion tonnes in 2020 to 43 billion tonnes in 2050, with all of the growth occurring in the non-OECD countries. By 2050, the combined emissions of China and India may constitute 40% of the world total, while those of Canada and the United States combined only 13%.
In addition to the potential consequences of economic trends and political commitments, we must consider the limitations of technology. Vaclav Smil is a Professor Emeritus of the School of Environmental Studies at the University of Manitoba and perhaps the foremost expert on the history of energy transitions. He considers that transitions take 50 to 70 years to unfold, partly because of the long lives of existing energy production facilities and economic infrastructure. Wind, solar and biomass energy sources have increased from negligible levels of use fifteen years ago to 4% of global energy use in 2018, but at a cost of U.S. $2.5 trillion in subsidies. Much of the future growth of renewables as contributors to the electrical energy system depends on an as-yet elusive technology breakthroughs. For example, technologies are needed to lower the cost of battery storage, which now is about $1,000 per kilowatt hour. We await similarly elusive technology and cost breakthroughs with respect to the use of hydrogen as an energy carrier, the production of cellulosic ethanol, and the electrification of transport, especially in the aviation, marine and surface freight modes. Governments simply cannot control the pace of scientific discoveries or the rate of commercialization of the discoveries that do occur.
Almost a billion and a half people in the world have no electricity or modern energy services. Many more want access to better housing, increased mobility, higher incomes from industrialization, and the hundreds of energy services available from increased electricity use. If they can exercise their choices in free, competitive markets, there is no doubt that they will opt for proven technologies that offer secure and affordable energy. That means increased use of fossil fuels and increased emissions. In short, no matter how many costs and constraints the federal government imposes on Canadians, global decarbonization will remain an environmentalist’s dream, not a realistic guidepost for national policy.