It takes all hands on deck, working together and across borders, to tackle climate change

The Biden administration is off to a bumpy start in its relationship with Canada by cancelling the Keystone XL pipeline.

During his first call with U.S. President Joe Biden, Prime Minister Justin Trudeau expressed his consternation over the President’s move to cancel the pipeline, a decision made on his first day in office. While the PM underscored “the important economic and energy security benefits of our bilateral energy relationship,” he acknowledged at a press conference following the call that there will be many opportunities to work together in the future to address issues where the two countries are more aligned. Given how closely Canada and the U.S. are woven together economically, socially and environmentally, the two countries need to work together to overcome the big challenges they both face; challenges that know no borders. Above all, they need to undertake joint and effective action to tackle climate change.

Canada has welcomed the Biden administration’s reengagement with the Paris Climate Accord. The President and PM are now both committed to achieving a net-zero emission economy by 2050. However, it will take much more than government targets, regulations, taxes and emission trading systems to make real progress towards their shared objective, while at the same time maintaining economic prosperity, sustaining the competitiveness of important industrial sectors in both countries, and securing well paying jobs for workers.

Neither government will be successful in making an economically and socially sustainable impact on emission reductions unless consumers and businesses buy in. They need feasible and affordable options when it comes to transportation, heating and cooling, and other forms of energy use. New products, technologies and energy sources have to be manageable and available at competitive costs, if they are to be part of the solution. Otherwise, consumers and companies will simply turn to other alternatives at hand, like shipping heavy oil by rail instead of pipelines.

That is why innovation is so important. The future will be one of zero-or-low-emission ve- hicles and buildings, energy efficient processes in industry, and less carbon intensive and recy- clable products for consumers. It will depend on new and radically upgraded infrastructure, smart transportation systems, energy distribution grids, alternative energy fueling stations for vehicles, smart interconnected urban infrastructures, new carbon capture and storage systems, as well as vastly improved methods of waste re-use, recycling and disposal. It will also involve new types of behaviour sustained by services, and technologies enabling vastly improved methods of energy management and greater sharing of resources.

New technologies, alternative energy sources, and low-emission products and production processes will be needed. But great new ideas, inventions and technologies will only sit on the shelf unless they are adopted, scaled-up and commercialized by industry, and then purchased by consumers and governments alike.

The President and PM have a common interest in accelerating innovation. This will require eliminating regulatory roadblocks and expanding programs that encourage and help finance technology adoption and scale-up, as well as technology development. Government procurement will be an important tool for both administrations, if used wisely.

Three considerations should guide their actions. First, entire value chains that extend across the common border must be taken into account. Electric vehicles are only a solution
if electricity is generated by a low emitting energy sector and stored in batteries that do not themselves cause major environmental degradation. Hydrogen power is an option, but hydrogen production requires large amounts of electricity, and most of it is supplied by the oil and gas sector. There are other alternatives: nuclear, solar, wind, geothermal and biomass, but the reality is that fossil fuels still account for over 70 per cent of the U.S. electricity production, while Canada offers an important source of clean energy.

The oil and gas sector will remain an import- ant energy source for the foreseeable future. It is the mainstay of energy security for both the U.S. and Canada. Going forward, oil and gas companies in both countries must be engaged as partners in tackling climate change. They are already world leaders in adopting new technologies that have led to significant reductions in the carbon intensity of their operations. Also, they will continue to play a pivotal role in making progress towards a net-zero emission energy future. Second, policies must be geared to a world of advanced manufacturing. Manufacturers will be the enablers when it comes to converting technologies into real applications for consumers, businesses and governments. It is the sector that will scale up and produce the devices and products of the future. Manufacturers’ adoption of new materials, production technologies, business and logistics systems will not only be instrumental in lowering emissions, but in improving productivity, competing and growing in world markets, and maintaining high quality jobs in the future as well.

The economic prosperity of Americans and Canadians will be built on world leading advanced manufacturing capabilities. This be- gins with a strategy and positive incentives for manufacturing renewal and growth, but let’s be real. The competitiveness of the manufacturing sector cannot rest on the production processes of the past, but on the ability of the companies to seize the opportunities that advanced technologies offer to enhance value for customers and significantly improve productivity.

Third, U.S. and Canadian government procurement policies need to look to the future and take the integrated nature of the manufacturing and energy value chains into account. Like climate change, innovation knows no borders. There will be much greater opportunity if the U.S. and Canada work together to build the net-zero emission economy of the future. Buy America policies that exclude Canada will only stand in the way of achieving the shared innovation and climate change objectives.

Tackling climate change is no easy job. No one should claim it is. There is no silver bullet. It takes a lot of hands from every sector of the economy and society, working together and across borders, to make progress. Canadians are looking to the Biden administration for the leadership, collaboration and willingness to build a common vision and purpose in achieving net-zero emissions. The rest of the world is as well.