Canada’s net zero goal hinges on stronger policy and strategic bets: report

First comprehensive modelling report on how Canada can achieve net zero emissions by 2050 shows success relies on decisive action in the face of uncertainty.

OTTAWA, February 8, 2021—Canada’s Net Zero Future, published today by the Canadian Climate Institute, is the first in-depth scenario report to explore how Canada can reach net zero emissions by 2050. Canada can not only achieve net zero, the report finds, it can capitalize on unique advantages by doing so. However, success hinges on governments and businesses decisively scaling up solutions available today, while skillfully navigating unavoidable uncertainty.

Achieving net zero emissions requires shifting to technologies and energy systems that do not produce greenhouse gas emissions, while removing any remaining emissions from the atmosphere and storing them permanently. To assess a mix of policies and technologies that could contribute to Canada reaching net zero within 30 years, the Institute analyzed more than 60 modelling scenarios and undertook supplementary research and consultation with policy experts, industry leaders, governments and civil society.

The report finds Canada’s success in building a prosperous net zero economy relies on advancing two distinct types of climate solutions: “safe bets” and “wild cards”.

Safe bets—commercially available, cost-effective technologies like electric vehicles, heat pumps in buildings, and smart grids—can generate at least two-thirds of the emission reductions required to hit Canada’s 2030 climate target. Canadian businesses, governments and households must massively scale up these solutions to achieve Canada’s 2030 and 2050 climate commitments. This will require creating incentives through increasingly stringent policy.

But success also requires wild card solutions—high-risk, high reward technologies like advanced biofuels, zero-emissions hydrogen, and some types of engineered negative emission technologies that are not yet commercially available. If they prove viable, these emerging solutions could drive significant emission reductions between 2030 and 2050—and could offer valuable export opportunities to meet growing demand for low-carbon technology and expertise. Realizing the potential of these solutions also requires policy, such as support for pilot projects, R&D, and tax incentives now, to increase the odds these prospective solutions come through.

As major economies including China and the European Union move towards net zero emissions, Canada’s energy systems and economy will have to keep pace or risk competitiveness pressures and shrinking market share. This is particularly apparent as the United States, Canada’s largest trading partner, pivots under the Biden administration to pursue major investments in clean energy and a commitment to achieve net zero by 2050 or earlier.

Forces outside Canada’s control will likely be the primary drivers of structural changes within Canada’s economy and energy systems in the decades ahead, the report finds. This includes not only climate policy action in other countries, but also forces like global oil market dynamics and shifting market trends and investor preferences. Developing both Canada’s safe bet and wild card advantages is key to creating opportunities to pivot and adapt, the research concludes.

Achieving Canada’s 2050 target requires policy makers to act decisively in the face of uncertainty. To scale up safe bets, governments should continue to steadily increase the stringency of policies such as carbon pricing and flexible regulations. To advance wild cards, governments should spread their bets—supporting a portfolio of emerging technologies, without delaying progress on existing smart bet solutions over the next crucial decade.

QUOTES

“Reducing Canada’s emissions to net zero by 2050 is no small feat—but it’s doable. For Canada to prosper on the path to net zero, governments and private sector leaders need to navigate complex changes to our policy and energy landscapes, while acting decisively on the solutions and insight available today. Canada has significant advantages compared to our peers, but as technological disruptions and global markets shift the ground beneath us, decision makers will need to manage uncertainty while adapting to seize emerging opportunities.”
-Kathy Bardswick, President, Canadian Climate Institute


“Uncertainty comes with the territory on Canada’s path to net zero—but that’s no reason to delay. There are many solutions we know will be central to reducing emissions in the next decade—electric vehicles, more efficient buildings, and non-emitting electricity like wind and solar are all safe bets. Canada has every advantage, and little risk, in rapidly scaling up these solutions. At the same time, Canada will need to spread its bets by investing in a portfolio of wild card technologies, to increase the odds that some of these solutions will come through when we need them.”

-Jason Dion, Mitigation Research Director, Canadian Climate Institute

CONTACT

Catharine Tunnacliffe
(226) 212-9883

Experts warn: Canada must act now to head off rising costs of climate change

A new report from the Canadian Climate Institute warns that the costs of climate change for Canada are massive and mounting, and recommends substantial increases in adaptation investment and enhanced climate risk disclosure to build resilience and limit damages. In light of the federal government’s fall economic statement, the need to plan for and limit foreseeable and manageable future costs is even more clear. 

The Institute’s comprehensive analysis of historical trends found that weather-related disasters like floods, storms and wildfires are getting more frequent, more extreme and more expensive—already adding up to billions of dollars each year. Since 2010, the costs of weather-related disasters and catastrophic events have amounted to about 5 to 6 per cent of Canada’s annual GDP growth, up from an average of 1 per cent in previous decades.

However, the report, Tip of the Iceberg: Navigating the Known and Unknown Costs of Climate Change for Canada, also reveals that only a fraction of climate change-related costs can be accurately quantified today, and that unknown costs may far exceed those that are understood. While reducing emissions in line with Canada’s climate targets remains critical to limit future damages, it won’t be enough to shield Canadians from the costs—known and unknown—of climate impacts already in motion.

Addressing and preparing for the impacts of a changing climate and building Canada’s resilience through climate change adaptation could help keep many of these costs in check. The report recommends governments and financial regulators systematically increase public and private-sector disclosure and transparency about the risks of a changing climate in decision making, to drive resilient investments and adaptation solutions. The Institute also recommends significantly increasing public funding for adaptation measures that improve resilience, and co-ordinating climate change adaptation efforts across provincial, territorial, Indigenous and municipal governments to scale up adaptation. 

Without such measures, the report finds, catastrophic losses from weather-related disasters could rise unsustainably. Insured losses for catastrophic weather events totalled over $18 billion between 2010 and 2019, and the number of catastrophic events was over three times higher than in the 1980s. Meanwhile, the average cost per disaster has jumped 1250 per cent since the 1970s; a typical storm or flood that cost roughly $8 million in the early 1970’s now costs over $110 million.

The report finds damages from more drawn-out climate change impacts, such as sea-level rise and permafrost thaw, could also increase substantially. For example, permafrost thaw in the Northwest Territories’ 33 communities is estimated to rack up $1.3 billion in costs over the next 75 years, equivalent to about 25 per cent of current territorial GDP. Further, without adaptation, accelerating climate change will increasingly impact health, ecosystems and Indigenous rights, lands and practices in ways that are harder to quantify in economic terms, yet remain highly consequential.

QUOTES

“One lesson Canada must learn from the global pandemic is that we need to get much better at foreseeing and acting on risk. As climate change accelerates, no individual, province or sector will be immune. Now more than ever, we cannot afford to ignore massive future costs—especially those that we have the power to manage. We can limit our risk exposure and make better decisions by investing in resilience and mandating climate risk disclosure.”
Kathy Bardswick, President, Canadian Climate Institute

“Canada has largely left the potential of climate change adaptation untapped. Not only are we more exposed to risk than necessary, we’re also missing out on significant returns that come from investing in resilience. We have the opportunity to proactively reduce some of our most critical climate-related risks—from urban flooding, to crop-killing droughts, to deadly heatwaves. Analysis shows that investing in well-designed climate adaptation measures before disasters strike can provide impressive returns by preventing damages and avoiding social and economic disruption.”
Dave Sawyer, Principal Economist and lead report author, Canadian Climate Institute  

KEY FACTS

  • Since 2010, the costs of weather-related disasters and catastrophic events have amounted to about 5 to 6 per cent of Canada’s annual GDP growth, up from an average of 1 per cent in previous decades.
  • Insured losses for weather-related disasters in Canada totalled over $18 billion in the past decade, doubling the total of the previous three decades.      
  • Since 2010, the average cost per weather-related disasters totalled $112 million, up from $8.3 million in the 1970s—a staggering 1250 per cent jump.
  • The Fort McMurray wildfires were the single most costly weather event in Canadian history, racking up almost $11 billion in terms of property and infrastructure damage, and losses from business disruption. The resulting hit to the economy was equivalent to 3.5 per cent of Alberta’s GDP or about 1.5 years of lost provincial economic growth.
  • 1.8 million households are estimated to be at high risk of flooding—10 per cent of all households nation-wide.

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CONTACT

Catharine Tunnacliffe
(226) 212-9883

Canada’s prosperity tied to progress on climate, social goals: report

September 17, 2020

OTTAWA — As Canadian governments work to revive the economy in the wake of the COVID-19 pandemic, a new report from the Canadian Climate Institute examines how economic, social, and climate objectives are connected. Drawing on various sources of data, the report demonstrates how progress on climate change and efforts to drive prosperity can be mutually reinforcing. 

The report, 11 Ways to Measure Clean Growth, aims to help governments understand how climate change interacts with factors that contribute to society’s long-term resilience and prosperity—such as GDP growth, technology development, trade, jobs, reduced poverty, affordable energy, improved air quality and ecosystem health. According to the report, expanding how governments measure progress is key to adopting policies that grow the economy and make Canadians better off while addressing climate change. 

The data shows that Canada is making headway in reducing greenhouse gas emissions while growing the economy, creating new employment opportunities in low-carbon sectors, and increasing investment in and demand for clean technology innovation and trade. Yet the Institute’s 11 indicators also highlight where progress on clean growth has been slow and uneven across regions, sectors and socio-economic groups. For example, the economies of several provinces remain closely tied to greenhouse gas emissions, and low-carbon technology adoption has been limited in sectors such as transportation. By explicitly connecting climate, economic, and social objectives when designing or implementing policy, governments can address these challenges and avoid disadvantaging lower-income Canadians and communities that have reduced capacity to adapt to climate-related risks.

The report also identifies significant data gaps that limit governments’ ability to clearly track clean growth progress. Successfully tackling ambitious climate objectives, such as Canada’s commitment to achieve net zero greenhouse gas emissions, while supporting economic recovery and long-term prosperity, requires more investment in the data needed to support smart decisions. 

QUOTES

“There are two major threats to Canadian prosperity: a global recession in the short term, and climate change longer-term. If we don’t address them together, we can’t succeed at either one. This research provides a compass pointing the way to better policy—policy that supports the twin goals of climate progress and prosperity.”

—Kathy Bardswick, President, Canadian Climate Institute

“Climate progress isn’t practical or durable unless it also supports a strong economy. Our goal was to figure out what it takes to achieve clean growth, and how to measure progress. The data shows it’s possible to  grow the economy while addressing climate change—as long as policy is designed to achieve environmental, economic and social benefits simultaneously. Otherwise, progress in one area could cause setbacks in the others.”

—Rachel Samson, Director, Clean Growth at the Canadian Climate Institute

RESOURCES 

CONTACT

Catharine Tunnacliffe
(226) 212-9883

Legislating climate milestones clarifies pathways to long-term goals: report

June 10, 2020 | OTTAWA — Long-term climate targets are notoriously difficult to achieve. For that reason, many governments have set legally-binding short-term milestones and adopted formal accountability measures to help clarify pathways and progress toward those far-off goals. 

Various Canadian governments are putting similar measures in place to support Canada’s goal of achieving net-zero emissions by 2050. New analysis published today by the Canadian Climate Institute identifies common elements and best practices for implementing interim climate milestones within a national accountability framework. 

Accountability frameworks have multiple benefits. They bring more clarity about policy pathways for businesses planning into the future. They link the ambition of targets with the stringency of policies. And for Canada, they offer a transparent way to work through the challenges—and opportunities—of climate policy in a federation.

Such frameworks break far-off emissions reduction targets into interim milestones, based on the advice of independent experts, and establish clear governance structures and processes to link milestones to policy actions. This approach holds governments to account for policy implementation by requiring regular and transparent assessments, progress reports, and action plans to meet targets, or course-correct when necessary. 

While B.C. and Manitoba have climate accountability laws, Canada has not yet adopted a federal climate accountability framework to support achieving its goal of net-zero emissions by 2050. The 2019 mandate letter for the Minister of Environment and Climate Change commits to setting legally-binding, five-year emissions-reduction milestones based on the advice of experts and consultations with Canadians. 

The Institute’s analysis outlines recommendations based on experience with climate accountability legislation in the United Kingdom, Aotearoa/New Zealand, and other jurisdictions. The Institute also identifies unique Canadian considerations policy makers must address—such as ensuring Indigenous governance, rights and reconciliation are reflected in the development of the legislation, and how to navigate potential conflicts within the federation over each jurisdiction’s contribution to achieving national milestones. 

Polling indicates most Canadians are in favour of Canada’s efforts to reduce emissions, and expect provinces and territories to contribute to those efforts. A poll conducted by Environics Research on behalf of the Institute in late March and early April 2020, at the outset of the COVID-19 pandemic, found that 76 per cent of Canadians support Canada’s goal to achieve net-zero emissions. Seven in 10 Canadians support the idea of both the federal and provincial/territorial governments adopting short-term “carbon budgets” to help achieve net-zero, and want governments to work together to determine each jurisdiction’s responsibility for reducing emissions. 

The Institute’s analysis finds that climate accountability frameworks are not a silver bullet; nor are they a substitute for policy. While they can create the conditions for coherent policy that’s consistent with long-term goals, like any law, they could be repealed by future governments. They also do not provide a mechanism for one level of government to legally bind another to act. Despite these limitations, international experience shows how legislating interim milestones and governance can promote a clearer and more collaborative approach for governments to work together to achieve long-term climate commitments. 

QUOTES 

“Governments everywhere struggle to adopt policies strong enough to achieve far-off climate goals—and each delay makes achieving those goals more costly. By working with provinces, territories and Indigenous governments to develop binding interim milestones and a national framework on climate accountability, Canada has an opportunity to take a more practical and productive approach that results in measurable progress toward long-term goals.” 

— Jason Dion, Mitigation Director, Canadian Climate Institute 

“Businesses and investors face significant risk given the uncertainty about Canada’s long-term policy trajectory from one government to the next. By collaboratively setting short-term milestones and the rules of the game as governments collectively work to meet those goals, a national climate accountability framework would reduce uncertainty and make it far easier for the private sector to both contribute to climate change solutions and capitalize on the opportunities ahead.” 

— Kathy Bardswick, President, Canadian Climate Institute 

RESOURCES 

CONTACT 

Catharine Tunnacliffe

(226) 212-9883

National research institute launches to bring clarity to Canada’s climate choices

January 21, 2020 | OTTAWA — Dozens of academics and policy experts today launched the Canadian Climate Institute, a new independent national research body. The Institute aims to bring clarity to the transformative challenges, opportunities and choices ahead for Canada as governments at all levels work to address climate change.

The Institute will undertake rigorous, evidence-based and integrated research, analysis and engagement to help decision-makers and Canadians understand and evaluate the policy choices that could put Canada on a path to achieve net-zero greenhouse gas emissions by 2050 and build a clean, prosperous and resilient future that benefits all Canadians.

The Institute aims to provide an integrated, evidence-based and practical perspective to inform climate policy development and decision-making by governments at all levels by bringing together experts from a broad range of disciplines, including economics, climate change adaptation and mitigation, Indigenous knowledge, natural and social sciences, public policy, energy systems and engineering. Institute staff will also engage extensively with business leaders, policy makers, Indigenous governments, communities, thought leaders and a broad spectrum of Canadians to convene constructive discussions about policy choices, and showcase effective solutions and best practices from leading Canadian cities, regions and industries.  

Released today, the Institute’s initial report, Charting our Course, takes stock of the current climate policy landscape in Canada and makes the case for how better integration among areas of expertise and conventional policy silos can contribute to a more resilient and prosperous future. The report concludes with four recommendations for policy makers and governments seeking to design and implement more effective policy:

  • broaden objectives for climate policy
  • embrace Canada’s role in global outcomes
  • expand the scope, scale, and pace of climate policies; and
  • seek out integrated solutions that drive multiple benefits.

The Canadian Climate Institute was established following a competitive call for proposals led by Environment and Climate Change Canada. That process resulted in a mandate to create a pan-Canadian expert collaboration that would “provide independent and expert-driven analysis to help Canada move toward clean growth in all sectors and regions of the country.” While our work is supported through a five-year contribution agreement with Environment and Climate Change Canada, the Institute is a wholly independent entity and retains full control over its research, findings, and policy recommendations.

QUOTES

“Climate change is already affecting life in Canada, and impacts are expected to become more profound and far-reaching in the decades ahead. There are no easy paths to achieve the transformative results necessary to thrive in the face of climate change, but Canadians are resourceful, practical and innovative, and we are already making progress. By drawing on experience and expertise from across the country, we can get further, faster and help decision makers successfully steer the country toward a low-carbon, resilient and prosperous future.”

  • Kathy Bardswick, President and CEO, Canadian Climate Institute

“Canada can design climate policies that work better and cost less by considering the full range of cost and benefits. To do so, we need multiple perspectives. Well-designed climate change policy doesn’t just mean tackling climate change, it’s also about keeping life affordable, protecting Canadians’ health, and making our economy and communities better prepared for the changes ahead.”

  • Dale Beugin, VP Research and Analysis, Canadian Climate Institute

“Climate change has handed us a problem of immense complexity and scale, and there are no easy fixes. The choices governments across Canada make today—about which energy resources to develop, what type of infrastructure to invest in, where to build new homes and developments, and what types of risks we need to prepare for—will have long-lasting implications for Canada’s future prosperity, stability, and competitiveness. Making choices that are cost-effective, fair and position Canada to thrive in the future is an incredible challenge, as well as an opportunity.”

  • Peter Nicholson, Chair of the Board, Canadian Climate Institute

RESOURCES

  • Who We Are | Learn more about the people who make up the Canadian Climate Institute
  • Report | Charting our Course: Bringing clarity to Canada’s climate policy choices on the journey to 2050
  • Blog | Read the latest posts by staff and experts with the Canadian Climate Institute
  • Follow Us | Stay up to date with the Institute by following us on Twitter @ClimateInstit or Facebook @CanadianClimateInstitute and subscribe to our news releases
  • Background | Read the Government of Canada call for proposals news release and backgrounder on the establishment of the Pan-Canadian Expert Collaboration 

CONTACT

For interviews or other media inquiries, please contact:

Catharine Tunnacliffe
Director of Communications,
Canadian Climate Institute
ctunnacliffe@climatechoices.ca
416 527 1777