This blog post was previously published in The Hub.
Technology plays a central role in addressing climate change and building a cleaner economy. At its most fundamental level, reducing harmful greenhouse gas emissions requires switching the technologies that power our economies. And that means that what governments and the private sector do to accelerate the adoption of cleaner or non-emitting technologies will be critical to the success of those efforts and to Canada’s future prosperity.
In a new series of technology profiles, the Canadian Climate Institute examines the current status of some of these critical technologies, and what governments can do to accelerate their use and impact. We’ve classified each technology into two categories—either as a “safe bet” or “wild card”—based on the level of risk and reward each involves.
No single technology will get the country all the way to its goals for reducing emissions and driving clean economic growth. We found that Canada will need a mix of safe bets and wild cards to play its hand right. Doing so will mean capturing some of the global growth in technology innovation and deployment, which offers big economic upsides for Canadian companies, industries and communities.
Canada’s portfolio needs safe bets and wild card solutions
Safe bets are solutions we know will play a role no matter what. They include technologies that are already viable, commercially available, and competitive no matter how the energy transition plays out. Energy efficiency, smart grids, hydroelectricity, and wind power are some examples of safe bets. They work, and make economic sense, today. But they need a policy environment that incentivizes adoption and rapid expansion of their use.
Wild cards are less certain. These technologies may be in earlier stages of development, or they may end up outcompeted by alternatives. Some examples of wild cards are small modular nuclear reactors (SMRs), green hydrogen, and technologies that capture and store carbon emissions from non-concentrated sources like the ambient air. In time, some wild card technologies might become common and viable solutions. Others might not.
Safe bets and wild cards have different policy needs. To support safe bets, effective government action accelerates deployment. That can mean speeding up project approvals, creating incentives for technology adoption, and maintaining a predictable policy environment. Wild card solutions need policy support for innovation and commercialization.
To reach Canada’s climate goals and keep up in a competitive global economy, we need a strong hand that includes both types of solutions.
Clean technology can be an ace up Canada’s sleeve
Luckily, Canada holds a strong hand today. Our electricity grid is among the cleanest in the world and getting cleaner. For companies deciding on where to locate new factories, access to reliable, clean, and affordable energy is a difference maker. As demand grows for clean electricity, maintaining this advantage will mean ramping up investment in more electricity capacity, as well as smarter systems. That means faster and wider deployment of proven smart grid technologies that better enable grid operators to balance energy demand with supply.
When it comes to wild card technologies, Canada starts with some competitive advantages. Massive demand for clean electricity could open doors for Canadian nuclear energy expertise in emerging small modular reactor technology. In Western Canada, for example, geological resources and technical expertise from oil and gas extraction sets up new opportunities in advanced geothermal and carbon capture, utilization, and storage (CCUS). For example, Calgary-based Eavor is led by veterans of the oil patch who are repurposing oil-and-gas drilling technology for advanced geothermal energy. The company has raised hundreds of millions in venture capital funding.
Opportunities for jobs and economic growth can and should extend to Indigenous nations who are increasingly big players in clean technology projects. As we note in our wind power technology profile, Indigenous partnerships are increasingly the norm for projects across the country, including in Quebec, Nova Scotia, and Ontario.
But to capitalize on its natural advantages, Canada needs a policy environment that lets clean technology succeed.
Smart policy can turn Canada’s technology advantages into wins
Both the deployment of safe bets and development of wild cards needs clear, consistent policies that incentivize these technologies and provide a level playing field for them to compete. That can mean, for example, long-term predictability on the rules for clean electricity, and stability in what to expect across the country from industrial carbon pricing policies.
In addition, targeted policy attention is needed to help remove unique barriers. All safe bets need support for deployment, but that can mean different things for different technologies. For example, streamlining regulatory approvals is a big opportunity for speeding up wind power development, while proven applications of CCUS could see faster growth with better stability and consistency in carbon policies and investment incentives.
Similarly, wild cards generally benefit from broad research and development support, but different wild card technologies also have specific needs. SMRs and advanced geothermal technologies, for example, would benefit from governments clarifying each of their unique permitting and regulatory environments to give investors certainty on the road to commercialization.
The bottom line is Canada needs both safe bets and wild cards. Smart technology policy boosts both. It’s critical that policy support is tailored to each solution to increase our chances of success in a global economy that is increasingly moving to clean energy.
