Canada’s net-zero bill could hit C$2 trillion: report
A report from the Royal Bank of Canada (RBC) October 20 said the cost for Canada to reach net zero by 2050 could reach as high as C$2 trillion (US$1.6 trillion).
But to reach that goal, RBC Economics and Thought Leadership says in The $2 Trillion Transition, “bolder” plans are needed to deploy carbon capture in the oil and industrial sectors, move away from internal combustion to electric vehicles, retrofit buildings and generate all electricity from renewable sources.
“Global economies in the US, Europe and Asia are already embarking on economic transformations on the path to net-zero and Canada urgently needs a plan for leading in that effort,” RBC senior vice-president John Stackhouse said. “To meet Canada’s 2050 emissions targets, every business will need to invest in new technologies, products and processes to enhance their competitiveness in a world of technological disruption and innovation.”
According to the report, at least C$2 trillion of public and private money will need to be invested over the next 30 years in new energy systems, electric vehicles and industrial processes. That is equivalent to about one year of Canada’s GDP.
Priorities will need to be set to double the supply of green electricity to decarbonise the power grid, reduce the carbon intensity (CI) of Canadian oil and gas, retrofit buildings to cut emissions, accelerate the deployment of electric vehicles and the infrastructure needed to repower them, innovate battery and biofuel production, reduce emissions from heavy industry and make agriculture more efficient and less energy intensive.
Among eight recommended policy directions Canada needs to take, the report says, is an industrial strategy for carbon capture, utilisation and storage (CCUS).
“The federal government and major industrial-emitting provinces should agree to a new framework for CCUS, including research grants, long-term tax credits for carbon stored, regulatory flexibility for rapid construction, and new approaches to public-private-Indigenous investment in infrastructure, with particular and urgent focus on abating oil and gas emissions,” it says.
Scaling CCUS could bring 76mn mt/yr of emissions reductions, at a cost of C$12.5bn, the report shows. Electrification of oil and gas infrastructure would bring reductions of another 16mn mt, at a cost of about C$1.2bn.