COVID-19 is the ultimate short-term shock, shuttering economies overnight and claiming hundreds of thousands of lives over the past year. In less than a year we went from sequencing the genome of a novel coronavirus to developing vaccines with >90% efficacy. Governments sprang into action, spending billions to ensure that economies and societies did not collapse. Science has come to the rescue, with the countries that relied and acted on the advice of public health officials faring better than others.
Many have suffered and some more than others, especially women, youth, and other minority groups, but things could have been so much worse if we had not acted. The response has been nothing short of incredible.
Another shock is coming, and this one is a drawn-out slow burn. Inevitably every country will be impacted by the perilous effects of climate change, with the most vulnerable having the most to lose. As wealthy countries have a moral obligation to share vaccines with those less fortunate, they too have a moral obligation to decarbonize their economies to mitigate negative global climate impacts.
While the pandemic has temporarily decreased emissions as the world stayed home under quarantine, these gains are only temporary and there are already signs that emissions may come roaring back when the pandemic is over.
To address climate change and reach our net-zero by 2050 goals, we need to rapidly develop and scale technologies that will help us decarbonize our economies. Half the emissions reductions need to reach these goals rely on technologies that are not yet commercial. We have a lot of work to do and the scale is massive, but so is the opportunity.
Developing clean technologies is not only good for our planet, but it’s great business too. In 2020 cleantech outperformed other sectors and doubled its worth on the TSX. In contrast, stocks of fossil fuel-based companies plummeted as demand for oil and gas dried up. Shell’s CEO has said that oil demand has already peaked and is focusing on transitioning the company towards low-carbon energy. Large investors and venture capitalists are taking note. BlackRock, with $7 trillion under management, altered their 2021 stewardship principles to focus on environmental and social priorities as core to its investment approach. The Bill Gates-led Breakthrough Energy Ventures just raised another $1 billion to invest in high-risk cleantech companies.
Even with the immediate threat of a pandemic, governments around the world have announced ambitious climate plans and targets with a strong emphasis to build back greener and better. In December, the Government of Canada released its much anticipated national hydrogen strategy to decarbonize hard-to-abate sectors like transportation and heavy industry. They also announced a rise in the carbon price from $30 per tonne today to $170 per tonne by 2030. US President Joe Biden has also made addressing climate change core to his agenda with an ambitious $1.7 trillion climate plan that includes carbon-free electricity by 2035, rejoining the Paris Climate Accord on day one, and appointing John Kerry as Special Presidential Envoy for Climate.
Canada already has many advantages that could give us a head start in the cleantech revolution. Our electricity is already relatively emissions-free with 60 percent coming from hydroelectricity—Canada has the most lakes of any country after all. We have strong post-secondary institutions and national labs that develop innovative breakthroughs in clean technology. Our problem has always been getting these innovations to scale.
The swell of momentum around taking action on climate change is palpable. To capitalize on this, Canadian companies and investors need to be more willing to adopt new clean technologies into their existing supply chains and operations. Every company in every sector needs to develop a serious plan for lowering emissions meaningfully or contributing to the transition we are share. The private sector needs to lengthen their time horizons and increase their patience for return. Cleantech is capital intensive and requires big machines and materials to build. In contrast, you only need a laptop, a talented programmer, and a killer idea to make the next digital technology unicorn. We need to create demand and a robust Canadian market for the made-in-Canada cleantech innovations we develop. The government can have a role to jump-start this with procurement, but industry and the private sector need to step up for these technologies to really scale.
Eventually, COVID-19 will be behind us. We’ll be rejoicing in the streets, the bars, and concert halls that we’ve all missed so dearly. However, we cannot be complacent with our victory and instead double down on the science and innovation that we need to address the challenges ahead. Another shock is coming, in fact, it’s already here, are we ready to meet it?
About the author: Phil De Luna is on a mission to make Canada a leader in decarbonization technology. He leads a $57M research program with the goal of helping Canada achieve net-zero GHG emissions by 2050, using renewable fuels from air and water. To hear more about Phil’s mission to decarbonize Canada, check out his TEDxToronto talk on February 4, 2021 at 7PM. Tickets available at https://uncharted.tedxtoronto.