That was one of the takeaways from a panel Wednesday that was part of a series on the Corporate Knights Earth Index. The initiative tracks Canada’s progress on decarbonizing its economy in a variety of carbon-intensive sectors, from buildings and transportation to agriculture and power. Heavy industry – the manufacturing of cement, steel, chemicals, pulp and paper, and non-ferrous metal smelting and refining – has seen only a slight reduction in its greenhouse gas emissions since 2005, according to Corporate Knights analysis, something that will need to change for the country to reach its climate ambition.

Heavy industry’s contribution to Canada’s GDP is 2%, but it is responsible for 9% of the country’s emissions. And to meet Canada’s commitment to cut emissions from 2005 levels by 45% by 2030, these industries would have to decline at an average rate of just over 4% a year. Lowering these emissions will not be easy without a complete rethink of these industries’ processes, said Ralph Torrie, head of research at Corporate Knights. “Incrementalism is not going to be an effective strategy in this case,” he told the panel. 

This is because roughly half of these industries’ greenhouse gas emissions come from the chemical processes they use to manufacture products. So it isn’t simply a matter of electrifying their energy consumption. A larger, more complex transformation has to happen. Recycling and disruptive technologies will be key in that transition, said Torrie, but most important will be speed.

By taking bitumen and converting it to carbon fibre alone, it will add so much value to our economy. And it will transform our economy, not transition it.

—Laura Kilcrease, CEO of Alberta Innovates

When it comes to cement, Chris Bataille, an energy economist with the Paris-based think tank Institute for Sustainable Development and International Relations and a professor at Simon Fraser University, said a big chunk of emissions can be eliminated through better design that minimizes the amount of cement used in buildings. But carbon capture technology will also be necessary to reduce emissions, he said.

In Edmonton, a pilot project is under development at a Lehigh Cement plant that hopes to capture more than 90% of the carbon dioxide that comes from the facility’s flue gas. The project is a first for the North American cement industry and follows a Norwegian carbon-capture cement project being built in Brevik, Norway, by HeidelbergCement.

Panellists also exalted the potential of research exploring “bitumen beyond combustion,” which entails tapping Canada’s bitumen deposits to make useful materials beyond oil and gas, such as carbon fibre (a strong, lightweight material used in some electric cars). Laura Kilcrease, the CEO of Alberta Innovates (which funded a $15-million competition to further develop this technology), says that this is not only an alternative way to use an abundant Canadian resource, but an important avenue for increasing its value. “By taking bitumen and converting it to carbon fibre alone, it will add so much value to our economy. And it will transform our economy, not transition it,” she said. 

Panellists agreed we’ll need a national conversation about how these critical industries make the necessary changes to arrive in a net-zero future. And a large part of that conversation will need to involve Indigenous communities, said Jean Paul Gladu, a founder and principal at Mokwateh Group who serves on Suncor’s board of directors. Gladu said that we won’t be able to achieve our goals without Indigenous consent.

And just as there is little time for incrementalism when it comes to the climate crisis, Gladu said that the same applies to Canada’s relationships with its Indigenous Peoples. “We’ve got to start thinking bigger in this country,” he said. 

The post How to transform Canada’s heavy industry into a net-zero powerhouse appeared first on Corporate Knights.

It’s a similar science that Bataille, an energy economist and economic modeller, has been using for more than 20 years to show the impact of rising greenhouse gas emissions on people and the planet.

While his and other climate models haven’t received near the widespread global attention as pandemic-tracking charts used to urge citizens to help “flatten the curve” of the virus, Bataille is hopeful that information will help people take this type of science more seriously.

“Suddenly modelling is relevant to them, numbers are relevant to them, and the credibility of the experts is relevant,” says Bataille, a Vancouver-based energy policy consultant and researcher at the Institute for Sustainable Development and International Relations, a non-profit research centre headquartered in Paris.

And while it’s an inexact science, Bataille says modelling can provide much-needed direction in times of uncertainty, especially when well communicated to the public.

“People know they need to do something different, so they are looking for direction,” says Bataille, who is also an adjunct professor at Vancouver’s Simon Fraser University (SFU). “What I am seeing is that, if experts communicate what they know and don’t know and provide clear direction given this uncertainty, and are willing to correct themselves, people will listen.”

It’s not just wishful thinking for Bataille, a key figure in the movement to decarbonize heavy industry, in particular steel – a sector whose emissions, together with concrete, are responsible for 14.7% of global CO2 emissions.

Bataille’s work is slowly but steadily helping the steel sector build a path toward a net-zero carbon future.

Bataille, a 47-year-old married father of two young daughters, first became interested in modelling as an economics and political science student at the University of British Columbia in Vancouver. One of his UBC professors was renowned economist John Helliwell, whose letter of recommendation landed Bataille a spot in the master’s program in resource and environmental management at SFU.

Bataille worked and studied with Mark Jaccard, a professor with a specialty in developing energy-economy models that assess the effectiveness of sustainable energy and climate policies. Jaccard ran (and still runs) an energy material modelling group at SFU, which also houses the Canadian Energy and Emissions Data Centre.

Bataille says the team built models of the Canadian economy, showing the potential for reducing emissions. “It was a hotbed of energy and economy modelling, and still is,” he says. “A lot of the people who do this in Canada now all came from this group and this school.”

Bataille became the executive director of MK Jaccard & Associates, a spin-off of his work with the professor at SFU from 2006 to 2011, before co-founding Navius Research Inc., where he worked for four years before going out on his own, with a focus on modelling for heavy industry, in particular steel and cement.

Jaccard describes Bataille as “very talented as a modeller” and a “quick study” who has become “a high international roller” when it comes to energy modelling for policy analysis. “He’s a very good, hard-nosed critical thinker,” says Jaccard, adding that Bataille is also skilled at bridging the nexus between academia, government and non-governmental organizations.

Shahrzad Rahbar, president of the Ottawa-based Industrial Gas Users Association, tasked Bataille with four different projects in different roles she’s held over the past couple of decades. She describes him as an “honest researcher” with a “fiercely analytical” mind.

Rahbar hopes Bataille’s work will inspire industry and policy-makers in Canada to put a greater emphasis on decarbonization moving forward.

“I think Canada’s missed opportunity is an international leadership role in the industrial piece of the puzzle when it comes to carbon reduction,” she says.

“As Chris’s work gets more international recognition, I hope that there will be more of a Canadian appetite for looking at the industrial piece in the same manner [as they do internationally] and attempts to craft a viable transition plan.”

If Bataille could set Canada’s strategy for decarbonizing steel during this time of once-in-a-generation public investment, he would get the federal government (and high-carbon manufacturers) to commit to using greener steel and build supply through accelerated research and development, piloting, commercialization and guaranteed lead markets at higher prices for set amounts of greener steel. For a few billion dollars spread over a decade or so, he says, we could make hydrogen-reduced ore in northern Quebec and ship the reduced iron to electric-arc furnaces in Ontario, where it could be made into steel.

Bataille says it was the initial work with Rahbar that enabled him to go out on his own to pursue his “obsession” with industrial decarbonization. That led to his various research papers, talks, policy influence work and work with the Intergovernmental Panel on Climate Change (IPCC).

Some of his work includes being lead editor of a special issue of Climate Policy on the Deep Decarbonization Pathways Project (DDPP) in 2015/16 and a two-year project to review technology and policy options for net-zero emission decarbonization of heavy industry, including detailed physical and policy transition plans for the Canadian steel, chemicals, mining and forest products sectors. Bataille says the policy package written for the 2014/15 DDPP helped inform Alberta’s climate plan under then-Premier Rachel Notley, which helped them form the template of the federal climate plan.

He’s also a lead author for the industry chapter of the sixth cycle of the IPCC Assessment Report (2019 to 2021).

Bataille sees his mission as normalizing conversations about industrial decarbonization, making it part of forecasts such as the one announced in March by the Canadian Steel Producers Association to achieve net-zero emissions by 2050.

“The net-zero commitment from the federal government on down is a necessary beginning. It [requires] a huge jump in technology, and we aren’t going to incrementally bumble our way there,” he says.

It’s his ability to work on different sides of the debate, including industry and academics, that Bataille believes enables him to break through barriers.

“I’m a hybrid academic and corporate person,” he says. “On one hand, I get what it means to run a business, to have things go really well, then south when you’ve got people on payroll . . . Then, on a deep level, I’m a researcher. I’m a person always trying to look forward and explore the world ahead of us . . . [Having experience with both] allows me to realize what policies are likely to have traction and not have traction because of the stickiness of reality.”

Despite pilot projects like the Swedish HYBRIT (Hydrogen Breakthrough Ironmaking Technology), described as “the world’s first fossil-free steelmaking technology,” overall progress on decarbonization has been slow. Nonetheless, Bataille believes his work is helping drive change long-term.

“I would like to see HYBRIT’s hydrogen DRI iron ore reduction technology, or something like it, become the new standard for making steel in my lifetime.”

It’s that hope that inspires him to press on.

“People need a purpose in their lives, and for me it’s an endless font of purpose. It’s not going to be solved when I’m done working, but it’s work worth doing.”

Brenda Bouw is a freelance writer  and editor based in Vancouver.

The post Man of steel: Decarbonizing one of the most carbon-heavy materials on the planet appeared first on Corporate Knights.

The post CK TV: Watch our roundtable on Building Back Better by Greening Industry appeared first on Corporate Knights.

Canada’s manufacturers generate more than 10% of total GDP, export more than $354 billion in goods each year and employ 1.7 million Canadians. Along with all the many benefits, manufacturing also has a sizable footprint. When it comes to greenhouse gas (GHG) emissions, there are two distinct groups: general manufacturing and what we call heavy industry. The heavy industries are the energy-intensive, primary processors, sometimes called the “smokestack industries” – steel, metal smelting, pulp and paper, lime and cement, and industrial chemicals. They consume 80% of the sector’s energy and emit more than 85% of total manufacturing GHG emissions. Their energy and emissions intensities are tied to the production technologies and processes used to make useful materials from raw inputs like trees, ores and aggregates, often in high-temperature furnaces and kilns. They are economic and employment mainstays of the communities and regions where they are located, but most of them operate in global business environments and markets where innovation is driving rapid change. For them, the low-carbon path is a game changer.

The transition to a sustainable production system is proceeding on many fronts, led by a reframing that shifts the focus from commodities to services, and includes dematerialization and lightweighting, reuse and recycling, the substitution of renewable energy for fossil fuels and information for energy, the elimination of toxic by-products and pollutants, and a redoubling of efficiency everywhere. Human production systems may never equal the elegance, efficiency and circularity of the natural systems in which they are embedded, but that is the aspirational goal and that is the direction in which they were evolving when the pandemic put the world on pause.

We have become accustomed to thinking of the primary processors as being necessarily energy- and carbon-intensive, but nowhere is the drive toward cleaner production more intense than in the heavy industry group. Most of the technologies we need to dramatically reduce emissions already exist: in patents, in some engineer’s lab or already in commercial use.

For the rest of the manufacturers, from food and beverage to the auto and industrial machinery industries, energy is no less critical an input, but it is a smaller contributor to the cost of production. Particularly for light manufacturing like consumer goods manufacturing and food processing, decarbonization is possible by electrifying the energy and transportation used, which, although it requires upfront investment, is increasingly popular because of the favourable economic paybacks. This means that there are ready-made solutions available today to significantly reduce emissions, including switching from natural gas to electric heat pumps, improving process efficiency, electrifying fleets and using alternative fuels like sustainable biofuels or hydrogen where available.

A critical component of the transition to net zero will be creating a circular economy, one that designs products for durability, uses fewer raw materials and returns as much used material back into the production chain as possible. A circular economy reduces emissions and waste sent to landfill as well as pressure on natural resources. It also creates jobs and new economic activity: the International Labour Organization projects that worldwide employment would grow 0.1% by 2030 under a circular economy compared to business-as-usual, with a net creation of 18 million green jobs.

Setting Canada’s manufacturing industry on a pathway to decarbonizing as part of building back better can help meet Canada’s goal to be net zero by 2050, as well as support good jobs by enabling the manufacturing sector to weather the economic downturn while retooling for the future and, at the same time, make Canadian companies leaders in exportable low-carbon technology.

 Some key steps for getting there include:

• creating jobs in the transition to a zero-waste economy by setting policy direction that sends a clear signal to business;
• accelerating the uptake of technology to switch from natural gas to electricity where it already exists and is affordable;
• using the power of government procurement to support the use of zero- and low-carbon materials and the adoption of deep decarbonization technologies for cement and steel, and reward producers for the amount of carbon reduced; and
• attracting businesses that build low-carbon equipment and technology in Canada with research and development and business supports.

Building Back Better Manufacturing:

The proposal

1. Drive investment and innovation toward a circular, zero waste economy: Shifting our manufacturing and retailers to support the transition to a circular, zero-waste economy can reduce the need for raw materials, support local economic development and domestic manufacturing (including “upcycling” of materials), and reduce vulnerability to global market disruptions. It can also reduce waste that goes to landfill, reduce GHG emissions and support new jobs in the technologies to reduce, reuse and recycle products in the waste management sector, which has grown three times faster than the rest of the economy over the past two decades.

The recycling industry is currently in crisis. For the industry to work, companies need to earn a return on their investments. There is a clear role for the federal government here to help create markets for recycled material, for example by establishing mandatory recycled content in products and packaging that contain plastics. The federal government could also provide carrots in the form of financial support for new investment in circular economy initiatives in provinces that agree to better harmonize their extended producer responsibility (EPR) standards (under which producers of packaging and paper are responsible for 100% of costs) as well as Nova Scotia–style landfill bans – both of which create reliable supply for recycling firms).

While waste management is largely under provincial and municipal jurisdiction, the federal government has an important role to play in setting the policy and public procurement framework to help drive investment in the circular economy. This includes:

• setting rising standards and integrating requirements for the recycled content of plastic produced to drive demand for recycled plastic in Canada and send a clear signal to recycling firms that they will have a domestic market; this would reduce vulnerabilities to supply- and value-chain interruptions and boost domestic recycling capacity;
• delivering on the government’s commitment to ban harmful single-use plastic products while providing financial carrots for provinces to adopt a more harmonized approach to landfill bans, modelled on the approach taken in the EU; and
• making producers fully responsible for their products, including packaging, at end of life by working with provinces and territories to ensure that companies that manufacture plastic products or sell items with plastic packaging are responsible for the cost of collecting and recycling, through EPR programs, and to set increasingly aggressive targets for recycling.

2. Leverage public procurement: The steel and cement sectors produce critical materials needed to build our transit, buildings and infrastructure, and they employ tens of thousands of Canadians. As part of the pathway to net zero (which the Canadian Steel Producers Association has recently adopted as a formal goal), these sectors will need significant investments in new process technologies. But if Canadian steel and cement producers do not make these investments as soon as possible so they can begin gradually dialling down emissions, there is a risk that it will cost a lot more to move quickly later to comply with Canada’s net-zero targets.

All levels of government are significant purchasers of steel and cement for the construction of public works projects like hospitals, transit and bridges. To support the decarbonization of these sectors, Canada should follow the lead of California and Europe by adopting green public-procurement policies for construction materials. California’s “Buy Clean Act” will set standards for the maximum amount of GHGs produced by steel and other building materials used in public works projects. The European Green Deal is building on existing green public-procurement policies to drive toward the EU’s net-zero goal.

The federal government and some provinces have already taken steps to lay out guidelines for greener procurement.

The federal government can send a clear signal to the steel and cement sectors that there will be a strong market in Canada for low-carbon materials by:

• paying a premium for lower-carbon cement and steel in public projects ($100 per tonne of carbon avoided), based on an industry benchmark, that declines as the cost of adopting the technology decreases;
• adopting a policy to reward lower-carbon suppliers in its own public procurement that sets a maximum threshold for GHG intensity that declines over time; and
• requiring that comparable thresholds are phased in by provincial and municipal governments for projects that receive federal government funding.

It is estimated that a $350 million per year program in subsidies for avoided greenhouse gases could (if combined with $50 million per year for measurement and verification systems and $80 million per year in R&D support) help unlock the $3.7 billion of private capital investment per year that is required for deep decarbonization in these sectors, as well as open up potential opportunities for other low-carbon building materials. With these measures, energy economist Chris Bataille estimates that by 2030, the carbon intensity of steel and cement could be reduced by 30%, and the technology will have developed such that new facilities could be net-zero carbon by 2035.

3. Incentivize electrification of light manufacturing: Light manufacturing has been reducing its energy use over the last several years and increasing electrification. There is an opportunity to accelerate this process and reduce GHGs quickly by creating a financial incentive for facilities to convert from natural gas to electricity, making them more efficient and competitive and securing jobs. The federal government could help spur investment by the private sector in technologies like heat pumps with a time-limited investment tax credit of 50% for the purchase and installation of equipment that eliminates the use of natural gas. To attract the facilities that manufacture this equipment to Canada, such as heat pump manufacturers, the federal government could extend this investment tax incentive for new heat-pump manufacturing facilities located here.

4. Incentivize new circular, zero-waste facilities: In addition to setting the policy and procurement framework to help drive the transition to a circular, zero-waste economy, the federal government can help attract new businesses and technologies to Canada to take advantage of the market. To accelerate these new investments, the federal government could offer an investment tax incentive, similar to what was used to spur solar investment in the U.S., for businesses that want to set up in provinces that have established a policy framework that creates the right conditions for a circular economy (including the phase-in of harmonized EPR and bans along the lines of Nova Scotia, which has among the best diversion rates in the country).

Smart, dynamic policies can help us build back better by accelerating the circular economy, electrifying light industry and decarbonizing heavy industry – moves that will help us build a resilient foundation to strengthen Canada’s manufacturing sector for a thriving 21st-century low-carbon economy.

Ralph Torrie is senior associate with Sustainability Solutions Group and partner at Torrie Smith Associates.

Toby Heaps is the CEO and co-founder of Corporate Knights.

With files from Céline Bak.

Notice to reader: Please be aware some of the figures and other details in this white paper have been updated in the Final Report to reflect feedback.

The post Building Back Better by greening industry appeared first on Corporate Knights.

When it comes to tackling Canada’s carbon emissions, the fuels that power our cars and heat our homes garner the most attention, but the steel and concrete that go into those vehicles and buildings are also highly carbon intensive. Concrete and steel together account for 14.7% of global carbon dioxide emissions, which cause most global warming. Most of the technologies we need to drastically reduce these emissions already exist: in patents, in some engineer’s lab or in commercial use where conventional technology doesn’t work as well.

Another way to cut emissions is by encouraging design that uses less steel and cement altogether – and uses them more strategically combined with other materials, like wood and sustainable plastics. Updated building and infrastructure codes or regulations that put a price on carbon would encourage builders to try out alternatives.

Other game-changing technologies are within reach, but they need developmental support or guaranteed early markets to build economies of scale: primary steel made with hydrogen and electricity instead of coal, and new cement chemistries and processes that are virtually carbon-free, in line with the 2050 goal for net-zero CO2 emissions the Canadian Steel Producers Association has set for itself.

Here’s a breakdown of how a $1 billion federal investment a year through 2025 could begin to bring these climate game-changers to scale:

• $100 million per year to develop measurement and verification systems to allow carbon pricing and regulations to operate more effectively, and allow already lower emissions producers to capture market share;
• $200 million per year for research and development; and
• $700 million per year in smart, dynamic subsidies to help emerging technologies and approaches prove their effectiveness for broader use (the less GHG-intensive the technology, the greater the subsidies).

These would apply to ultra-low-emissions steel, cement and chemical products and their substitutes for public infrastructure, buildings and vehicles. The subsidies could go towards making all new and retrofit government buildings and infrastructure low emissions in both materials and energy use.

With this $1 billion green jolt to the steel, cement and other materials sectors, the government could stimulate the economy in the short run, reduce Canada’s emissions and improve our long-run competitiveness in a low-carbon world.

Chris Bataille is an energy economist who serves as a lead author for the Intergovernmental Panel on Climate Change.

The post Getting the carbon out of concrete and steel appeared first on Corporate Knights.

The world is at a turning point. Will we address the climate crisis in a timely and adequate manner and create a low-carbon economy, or will we fail to see the benefits of the transition and instead face the catastrophic impacts of global heating ill-prepared? With Canada’s energy-intensive economy, there are market opportunities in climate adaptation and mitigation. Now is the perfect time to recalibrate Canada’s economy to thrive in a low-carbon world. The prize includes stronger GDP growth, hundreds of thousands of new jobs and billions of dollars of savings. What’s missing to get us there is an aggressive clean stimulus package to turbocharge the transition, one that would require an investment of slightly under 2% of the national GDP over six years.

To illustrate the economic prospects of various sector-specific climate policies, Corporate Knights worked with industry, government and academic experts to develop The Capital Plan for Clean Prosperity. The Plan has been divided into five sectors that have the biggest carbon and economic footprints in Canada: buildings, transportation, electricity, oil and gas, and heavy industry. In 2017, heavy industry was responsible for approximately 10% of Canada’s total emissions.^[1]

What are the federal party positions on heavy industry?

With the federal election intensifying, parties are making an effort to highlight their policies around reducing emissions while simultaneously supporting Canadian industry and Canadian jobs.

• The Conservative Party promises to fight carbon leakage^[2] by ensuring the competitiveness of Canadian industry when designing environmental policies. Emissions standards would be set for major emitters. Those that would emit more than allowed would be required to adopt emissions-reducing technology and invest in R&D by a set amount for every tonne of greenhouse gas (GHG) they emit above the limit. The party strongly opposes carbon pricing.^[3]
• The Liberals have committed to establishing a $5 billion Clean Power Fund which would support the electrification of Canadian industry, including resource and manufacturing sectors. They will also maintain carbon pricing as part of their environmental plan, albeit with some carve outs for trade-exposed heavy industries.^[4]
• The NDP plans to develop a national industrial strategy to ‘build an advanced low-carbon manufacturing economy in Canada,’ but offers no further details. The party supports carbon pricing, and will implement more stringent pricing regulations for big industry. ^[5]
• The Green Party has committed to setting a decreasing emissions cap for industry, with penalties for companies that exceed said limits. The party would also maintain a revenue-neutral carbon price. ^[6]

While clearly intent on engaging industry in decision-making, all of these commitments fall short of providing the required financial firepower to ignite energy efficiency and decarbonization investments on a scale commensurate with the challenge and opportunity of climate action. Under the logic of “what gets funded gets done,” we propose a six-year time-bound clean stimulus program to cover the cost of improving energy efficiency and reducing emissions in the Canadian heavy industry sector.

We conducted extensive calculations based on data from sources such as Statistics Canada and Natural Resources Canada. By implementing an active clean stimulus program in the heavy industry sector, Canada could:

• raise GDP by $13 billion
• add 19,500 full-time jobs
• drive savings of $16 billion
• increase tax revenues by $4.3 billion from 2020 to 2025
• reduce the sector’s emissions from 75 megatonnes (mt) of CO₂ equivalent (CO₂e)^[7] in 2016 to 53 mt of greenhouse gases (GHG) by 2025 (equivalent to taking 4.6 million cars off the road for a year)

The policy that would bring us these numbers: A $16.8 billion clean public stimulus fund for investments that can reduce either heavy industry’s energy use or greenhouse gas (GHG) emissions by 50% by 2025.

Public investment needs

Implementing the heavy industry clean stimulus program would require public financing of $16.8 billion over the next six years (2020 to 2025, inclusive). The goal is to ‘green’ 50% of Canadian heavy industry by halving either a company’s emissions or energy usage. The choice between emissions or energy reductions would be under the company’s discretion. The companies would be provided with grants from the federal government to achieve these reductions. If the companies fail to reach these goals, the grants would need to be repaid. The grants would be financed through the creation of a federal fund, the Low-Carbon Industry Fund, which would be financed through governmental green bond issuances to raise the required $16.8 billion.

It’s imperative for heavy industry to implement and develop energy and emission-saving technologies as soon as possible. To stay on track for a global temperature increase of 1.5 to 2C, low-carbon technologies should become standard by the early 2030s. There are many off-the-shelf technologies to do this as well a number of game changers in the realm of low-carbon cement, steel and aluminum. For example, in 2018, Alcoa and Rio Tinto unveiled a technology in Quebec that they described as “the world’s first carbon-free aluminum smelting process.” The pilot is supported by various companies as well as federal and provincial governments. The technology could reduce emissions in aluminum smelters and decrease operating costs by around 15%.^[8] The Russian aluminum company Rusal is also working on its own line of carbon-free aluminum, showing that the global race is on. Another company from Quebec, Carbicrete, is developing a carbon-negative concrete alternative which sequesters carbon dioxide from the atmosphere and uses it to produce the sturdy material. In the steel industry, a partnership of Swedish firms is developing a fossil-free steelmaking technology with 20–30% lower production costs compared to traditional technology.

From 1990 to 2015, Canada’s industrial sector’s energy use increased 31%; it would have increased by 42% without energy efficiency improvements. Consequently, the sector saved $3.2 billion in energy costs in 2015.^[9] The business case for investing in technology and reducing emissions or energy use is not hard to spot.

Despite all of these exciting technological developments, it will still be several years before some of these technologies are ready for commercial use. Before zero-carbon or even carbon negative manufacturing technologies are ready to be implemented in heavy industry, cutting emissions and energy use in the short term is vital. This can be both done by incremental changes and/or developing completely new, groundbreaking technologies. Grants such as the one proposed in our Capital Plan can push the needle for both small, cumulative improvements and more impactful technological breakthroughs.

Economic and environmental benefits

Job creation: 19,500 jobs

The new jobs that would be created with the energy efficiency stimulus would amount, based on our calculations, to 19,500 new, full-time jobs. This includes direct, indirect and induced jobs.

Increase in GDP: $13 billion

The GDP increase between 2020 and 2025 could reach $13.2 billion with this stimulus project. With stronger economic growth through increased GDP, average income levels would go up and unemployment numbers would drop for mostly blue-collar workers in the construction and trades industry.

Increased tax revenues: $4 billion

the realization of these energy efficiency projects, federal and provincial Canadian governments could benefit from additional tax revenues of $4.3 billion dollars. These tax revenues could offset approximately one-third of the cost of the program.

Direct savings: $16 billion

Companies could generate savings of close to $16 billion from 2020 to 2025 (inclusive) through reduced energy costs.

Emissions: 30% reduction in heavy industry

In 2017, heavy industry was responsible for approximately 10% of Canada’s GHG emissions. The absolute amount of GHGs emitted in heavy industry has gone down by 29% after peaking in 1996–1997. It’s notable that the federal government predicts that emissions from heavy industry will increase by 19% in the next six years over 2016 levels. This underlines the necessity of a clean stimulus program for the sector as soon as possible. The recommended clean stimulus program could reduce the sector’s emissions by 22 mt CO₂e by 2025, or a nearly 30% reduction from 2016 levels. This would be the equivalent of taking 4.6 million cars off the road for a year.^[10] The recommended stimulus program would achieve approximately 12% of the emissions reductions required to fulfill Canada’s commitments to the 2015 Paris Agreement.

These numbers show that engaging and supporting heavy industry to reduce emissions and/or its energy use is mutually beneficial both for industry and Canadians. With the importance of heavy industry to the Canadian economy and the unavoidable emergence of the low-carbon economy, this mechanism would undoubtedly bring Canada further down the path to a cleaner manufacturing sector and a cleaner environment.

We are, indeed, at a turning point. How we act in the next decade will determine the climate conditions of dozens of future generations. Transitioning into a low-carbon economy is not an alternative course of action, but a necessity to ensure a stable future for Canada. Due to the fact that governments set the framework for how corporations and individuals operate in the economy, the onus on climate action largely lies with federal and provincial governments. Regardless which party is elected October 21, the Capital Plan for Clean Prosperity offers Canada the opportunity to pivot towards a low-carbon economy at this critical time. Adopting the Plan would bring economic prosperity to Canadians through new jobs, higher GDP, and savings for individuals, corporations and governments. The window of opportunity for economic, social and environmental prosperity for generations to come is still open. The question remains, will Canada’s incoming government seize it?

Corporate Knights is committed to providing the public and decision makers with information about the intersection of business, environment and society. Learn more about the rest of our Capital Plan for Clean Prosperity addressing buildings, transport, electricity, and oil and gas  on our website. You can find an overview of the plan here.

^[1] https://www.canada.ca/en/environment-climate-change/services/environmental-indicators/greenhouse-gas-emissions.html

^[2] Carbon leakage refers to a situation that may occur if, for reasons of costs related to climate policies, businesses were to transfer production to other countries with laxer emission constraints, leading to an increase in total emissions. (European Commission)

^[3]

^[4] https://2019.liberal.ca/wp-content/uploads/sites/292/2019/09/Forward-A-real-plan-for-the-middle-class.pdf

^[5] https://action.ndp.ca/page/-/2019/Q2/2019-06-19_Commitments-Doc_EN.pdf

^[6] https://www.greenparty.ca/sites/default/files/platform_2019_web_update_oct_6.pdf

^[7] “Carbon dioxide equivalent” or “CO2e” is a term for describing different greenhouse gases in a common unit.  For any quantity and type of greenhouse gas, CO2e signifies the amount of CO2 which would have the equivalent global warming impact.

^[8] https://corporateknights.com/voices/brenda-bouw/greening-concrete-jungle-15604200/

^[9] https://www.nrcan.gc.ca/sites/www.nrcan.gc.ca/files/energy/pdf/energy-factbook-oct2-2018%20(1).pdf

^[10] https://www.epa.gov/energy/greenhouse-gas-equivalencies-calculator

The post Capital Plan for Clean Prosperity: Steeling heavy industry for a low-carbon future appeared first on Corporate Knights.