CANADA’S NET ZERO FUTURE: Finding our way in the global transition

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Report from the The Canadian Institute for Climate Choices

An unedited Summary of the Report and the Recommendations URL link to all 130 pages at the bottom

Getting to “net zero” emissions in Canada means shifting toward technologies and energy systems that do not produce greenhouse gas emissions, while offsetting any remaining emissions by removing them from the atmosphere and storing them permanently.

Put simply, Canada would take as many emissions out of the atmosphere as it puts in, rather than leaving them there to trap heat and contribute to climate change.

The transition to net zero is global and gaining momentum. From the United Kingdom to China, the world’s pacesetters are embracing net zero as the benchmark for committed climate action.

Major economies, including the United States, are moving to catch up. In the decades ahead, fundamental changes to Canada’s economy and energy systems are inevitable—and they will be driven in large part by factors outside Canada’s control. As the pace of change accelerates within and outside Canada’s borders, the country’s governments and businesses can’t afford to stay out of the game.

Achieving “net zero” emissions in Canada by 2050 is an ambitious goal. Our research indicates it is doable, but getting there will require implementing policy well beyond anything seen to date in Canada. It will also require navigating significant complexity and uncertainty.

Ultimately, this country’s path to net zero will be defined by policy choices made by all orders of government, as well as technological innovation and factors beyond domestic control, such as global market shifts and changing energy demand.

MANY PATHS LEAD TO ZERO
Our research finds there are many possible routes to net zero for Canada. This report does not recommend any specific one. Instead, it provides a clear analysis of what Canada’s options are, the drivers inside and outside Canada’s control that will matter, and the conditions that are likely to influence success.

Our analysis looks across Canada’s various potential pathways to net zero, allowing us to unpack the effect that uncertainty might have on the road ahead and to understand how Canada’s choices will affect crucial outcomes: economic, social and environmental. This approach aims to help decision makers reconcile uncertainty with the need to take decisive early action and realize emerging opportunities—and, ultimately, to make strategic and informed choices on the road ahead.

KEY FINDINGS

A net zero Canada is possible but requires strong policy. There are many potential pathways for Canada to reach net zero by 2050, but reaching it depends on increased policy ambition from all orders of government.

▶Big transitions are inevitable—especially due to global trends. The transition to net zero will drive significant change in Canada’s economy, posing challenges for some regions and sectors while also creating new opportunities. At the same time, much of this change will be driven by factors outside of Canada’s control—particularly international climate policy and global demand for oil—underlining the importance of seizing new opportunities and planning for transition.

▶Canada has competitive advantages that will create new opportunities in pursuit of net zero. Canada is uniquely positioned to capitalize on emerging opportunities as the world pursues emissions reductions. And the transition to net zero presents opportunities for oil-and-gas-producing regions to diversify and grow their economies by capitalizing on emerging sectors.

▶Scaling up “safe bets” (low-risk solutions that are available today) is crucial to reaching 2030 and 2050 targets, and there is no reason to delay. Across the scenarios we examine, nearly two-thirds of emissions reductions by 2030 would rely on safe bet solutions. There are advantages to moving ahead with these solutions quickly and decisively.

▶“Wild cards” (high-risk, high-reward solutions that are still in early stages of development) have an important role to play in Canada’s transition to net zero. Wild cards have the potential to fundamentally change Canada’s path to net zero, and action is required now to ensure these solutions are ready when Canada needs them. Yet wild cards should be handled with careful attention to risk and uncertainty, as betting on the wrong pathway could jeopardize Canada’s net zero efforts.

▶Safe bets and wild cards represent two distinct policy problems that are better considered in separate policy conversations. Too often, policy debates in Canada have led to paralysis by conflating the challenges and opportunities across safe bets and wild cards. Each is a key part of the transition to net zero, and one must not serve as a distraction from the other.

▶Engineered forms of negative emissions are a special type of wild card, best viewed as a complement to other solutions rather than a substitute. Engineered forms of negative emissions face significant barriers and uncertainty: If Canada relies on these solutions and they fail to prove viable, it could significantly increase the costs of Canada reaching net zero, or result in missing it altogether.

▶Pathways to 2050 have far-reaching implications for the well-being of Canadians. If managed effectively, the transition to net zero could maintain or improve the well-being of all Canadians. But this will require careful attention to mitigate uneven impacts and ensure benefits are available to everyone.

RECOMMENDATIONS

1. Governments should create incentives for the widespread deployment of “safe bet” solutions, building on policy mechanisms already in place.

2. Governments should manage the risks and opportunities posed by “wild card” solutions through a portfolio approach, backing multiple potential solutions to mitigate their high risk.

3. Governments should increase policy certainty by implementing robust climate accountability frameworks—governance structures that connect long-term emis-sions reduction targets to near-term policy actions through interim targets, regular and transparent monitoring and reporting, regular opportunities for course correc-tion, and mechanisms to enhance government accountability.

4. Governments should work to ensure the path to net zero is fair and inclusive, providing targeted support so that the transition does not impose disproportionate costs or exacerbate existing barriers for different regions, sectors, workers, communities, and income groups

For the full report please see https://climatechoices.ca/reports/canadas-net-zero-future/

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