After more than three years of denial and policy rollbacks under President Donald Trump, the United States may be about to turbo-charged its response to climate change, and Canada will have to step up its game or be lost in the wake.
Former vice president Joe Biden — the presumptive Democratic Party nominee who has a sizeable lead in current polls — unveiled a massive and comprehensive climate-change plan this month. He has vowed that, if elected in November, he will make the U.S. a global climate leader.
The federal Liberal government is preparing to launch a more ambitious plan that would set tougher targets for reducing greenhouse gas emissions by 2030, and put the country on a path to net-zero emissions by 2050.
What happens in the U.S. in November will have enormous consequences for how successful Canada will be in driving towards those goals. Essentially, we will either be swimming with a strong North American current or be forced to make progress against a political tide that favours fossil fuels and deregulation.
While a Biden win would represent major victory in the battle against climate change, it would pose both an opportunity and a challenge to Canada’s growing clean technology sector. The goal, as stated in his plan, is to make the U.S. “the world’s clean energy superpower.”
A growing American clean-energy sector would be an attractive market for Canadian entrepreneurs, though protectionist measures in the U.S. could limit that benefit. Biden also promises subsidies for such American companies that would then target the Canadian market.
The federal and provincial governments will need a coherent strategy to ensure the clean-tech sector here has the policies it requires to prosper, or we will be importing the technology we need to make the clean-energy transition.
Ottawa received advice last week from the independent task force for resilient recovery that urged the Liberal government to adopt a $50-billion, five-year plan that would be competitive with the green recovery plan that the European Union has endorsed. However, it would be dwarfed by the plan proposed by Biden.
A Democratic Party victory is far from assured in November. While Biden has a strong lead in polls — including in crucial swing states — it would be foolish to assume Trump can’t find a way to win. Especially given the Republican Party’s aggressive campaign to suppress voting in minority area that traditionally support Democrats.
Should he win, Biden will need Congress to enact much of his four-year, $2-trillion package. As was the case with his former boss Barack Obama, he may have to find non-legislative means to accomplish his goals if Republicans maintain control of the Senate.
Still, Biden’s climate plan is more ambitious than anything the Liberal government has articulated to date. While it lacks a national carbon price, it would rely on regulations and subsidies to achieve the same ends.
Politically, it would challenge Prime Minister Justin Trudeau to step up the government’s climate-change agenda with direct spending, subsidies and regulations. Conversely, a Trump win would strengthen the voices here who argue Canada must limit its ambition in order to remain competitive with U.S. industry.
A key Biden goal is a carbon-free power system by 2035. Canada has pledged to phase out coal-fired power by 2030 but many provinces would still rely on natural gas.
A net-zero electricity goal in the U.S. would represent opportunity for Canadian clean power generators to sell power to customers in northern states, though additional transmission lines and energy-storage capacity would be needed to realize the full potential.
Biden is also promising support for small modular nuclear reactors (SMRs) and for carbon capture and storage technology. In both cases, Canada is pursing its own ambitions with those technologies that could potentially provide zero- and low-carbon solutions for the power, oil and gas and industrial sectors.
His plan also promises to unleash the world’s largest investment in clean energy research and innovation, with the goal of regaining leadership in key areas form the China and other global competitors.
A Democratic victory would also put more pressure on western Canada’s oil and gas sector.
Biden has voiced his opposition to the Keystone XL pipeline project which has been halted by Americans courts, and to which the United Conservative Party government in Alberta has promised $7.5-billion in subsidies. He would doubtless be less supportive that Trump has been for other cross-border pipeline projects.
In theory, a less supportive administration for the American oil industry could result in lower crude production there and encourage allow for increased Canadian imports. But western producers need more pipeline access to take full advantage of such a situation. At the same time. policies to cut fossil-fuel consumption would undermine the biggest export market for Canadian oil producers.
Biden also pledged to require publicly traded companies to report on their climate change-related financial risk and opportunities in their regulatory filings.
Large investors such as pension funds are increasingly demanding such risk disclosures from energy, financial and industrial firms. As it takes hold, the growing awareness of climate-related risk and opportunities will create incentives for investors to shift their assets out of the fossil-fuel sector to low-carbon alternatives.
A Biden victory would also pave the way for the U.S. to rejoin the Paris climate agreement, and re-assume a leadership role in the battle against global warming. The presumptive nominee has said he will convene an international meeting immediately after taking office with the world’s largest emitters, including China and India, to seek greater commitments to reduce greenhouse gases emissions.
As it is on so many fronts, the upcoming American election represents a watershed moment in the world’s effort to avert a climate catastrophe. Whatever political party holds power in Canada, its policies on climate change will play out on a global playing field where major economies, especially the United States, dominate the action.
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