'Spending What It Takes' Would Put Canada on Net-Zero Path
Next month’s federal budget can set the pace for the transition off carbon, as long as Finance Minister Chrystia Freeland gets the pivot right.
This post has been updated.
At a moment when how we speed up the shift off carbon is an even bigger question than what policies we put in place, a new piece of pre-budget advice points the Trudeau government toward a green industrial plan that isn’t just good policy. It’s also good project management.
The headline number from Spending What It Takes, released Thursday by Climate Action Network-Canada (CAN-Rac) and the Canadian Centre for Policy Alternatives (CCPA), is C$287 billion over five years. Investment on that scale, the groups say, would put Canada on track to meet its net-zero goals, while delivering good jobs, lower living costs, and better climate resilience in every part of the country.
But here’s the back story: at about $57.5 billion per year, the price tag for this rapid decarbonization plan is about half of the capital expenditures the country’s highest-emitting industries already pay out each year. That list (naturally) begins with oil and gas, but extends to all the energy-consuming businesses and sectors that must also cut their emissions by at least half over the next seven years, then bring them to zero by 2050.
Those industries averaged $100 billion per year in spending on their own capital and infrastructure projects in the five years leading up to the pandemic, CCPA Senior Economist Marc Lee told The Energy Mix earlier this month. And “I think those industries would see themselves reverting to something like that in terms of the baseline” as COVID-19 mostly moves into the rear view mirror.
The CAN-Rac/CCPA analysis lays out a different path. “What we try to do with our report is present a big investment plan that displaces fossil fuel investment and puts us on the trajectory for public infrastructure to meet our targets,” Lee said. “It’s a major ramp-up from where we are now, but it’s also the right ramp-up, and it’s not necessarily forever,” in contrast to industry subsidies that may have been going on for decades.