Evidence of meeting #12 for Environment and Sustainable Development in the 44th Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was sector.
A recording is available from Parliament.
Canada Research Chair in Urban Planning for Climate Change, Associate Professor in Geography and Civil Engineering, University of Victoria, As an Individual
I can speak to the new European Union legislation, though, and I can speak to what's happening with the European Commission.
Liberal
Lloyd Longfield Liberal Guelph, ON
Okay. I guess now isn't the time to develop ideas too much further, because of time constraints, but Germany has done a lot of work on biomass on the farms. They have over 6,000 installations of biomass on farms. It was because of the installation in municipalities of district energy that I was there on behalf of Guelph before politics. I was looking at how we could get district energy implemented in Guelph to reduce our carbon footprint. It still relies on natural gas in terms of heat source, but it's something that Germany has done. You can see that Germany, as Mr. McTeague said, is still using some fossil fuels. They haven't made the full transition, and probably won't because of the mix that's needed in the market.
What stops countries from getting to full renewables?
Canada Research Chair in Urban Planning for Climate Change, Associate Professor in Geography and Civil Engineering, University of Victoria, As an Individual
As I mentioned in my writing, for one thing, we just haven't gone far enough yet. Just like transitions with other things, it requires time. One thing to note, though, about what you're bringing up is that every country and geography is different and will have different types of resources available to it.
For example, you mentioned that district energy is reliant on natural gas. Well, actually, one of the things I teach my students, and that I put into my briefing note, is that two-thirds of the energy across any country, across all sectors of the economy, is typically lost as waste heat. A lot of that waste heat is actually lost in cities.
For example, we don't need natural gas to have district energy. We can basically map out waste heat centres and implement waste heat capture, which could be used for both heating and cooling. That would dramatically reduce the amount of fuel we need for heating and cooling—for example, taking waste heat from industrial processes and using that for district energy.
Liberal
Lloyd Longfield Liberal Guelph, ON
Perhaps I can interrupt, just because of the time.
Guelph looked at that. We have waste heat at the hospital. We have waste heat at the rink downtown. We didn't have enough waste heat source to make it viable, so the federal government likely would have to get involved. The economics just weren't there for the municipalities.
Canada Research Chair in Urban Planning for Climate Change, Associate Professor in Geography and Civil Engineering, University of Victoria, As an Individual
It's happening in the city of Toronto right now.
Liberal
Lloyd Longfield Liberal Guelph, ON
It is in some cities. Edmonton has found some opportunities. But to get real change in our energy consumption on buildings, we need projects of scale. I'm not putting that as an either-or.
Canada Research Chair in Urban Planning for Climate Change, Associate Professor in Geography and Civil Engineering, University of Victoria, As an Individual
I agree with you on that, but Guelph is quite a bit smaller than the city of Toronto. Very large cities can definitely find those. As prices change, we can also find better economic supports if we have more regulatory supports, but effectively, Toronto is already implementing it right now.
Liberal
Lloyd Longfield Liberal Guelph, ON
My point, though, is that governments need to bridge the gap in many cases in order for that to happen, and that subsidies are the way we bridge that gap.
Canada Research Chair in Urban Planning for Climate Change, Associate Professor in Geography and Civil Engineering, University of Victoria, As an Individual
I think there's a range of different types of instruments that can be used to bridge those gaps. For example, in the case of electrification, there are regulations against sharing electricity on a microgrid that would improve resilience.
Liberal
The Chair Liberal Francis Scarpaleggia
Thanks very much. That's a good note to end on.
We'll go Madam Pauzé for two and a half minutes.
Bloc
Monique Pauzé Bloc Repentigny, QC
Thank you, Mr. Chair.
Mr. Pineault, I have two and a half minutes to ask you two questions.
Yesterday, the IPCC was emphatic about how quickly governments had to act to reverse the current trend.
At one point, we debated the efficacy of subsidies and inefficient subsidies. Do you feel that a definition is really needed at this point?
Professor, President of the Scientific Committee, Institute of Environmental Sciences, Université du Québec à Montréal, As an Individual
I believe that at this point, if we want to speed up our transition to carbon neutrality, as required by the IPCC, we need to take a highly global view of the oil and gas sector. We need to ask ourselves what to do in this sector, how to intervene, how to reduce its scale, and how to redeploy resources. We also need to ask ourselves how to help the three provinces that depend heavily on it and for whom there would be consequences. That's the conversation we need to have. Unfortunately, it's not the one we are having because we're talking about extending the momentum of a sector that, in practice, needs to be curbed.
Bloc
Monique Pauzé Bloc Repentigny, QC
I expect that you are aware of Senator Rosa Galvez's Bill S‑243, the preamble of which states:
... climate-related financial risks cannot be treated as conventional financial risks because they are characterized by radical uncertainty and irreversible catastrophic consequences and therefore require a distinct approach to urgently align financial flows with climate commitments;
Do you agree that it's essential to “urgently align financial flows with climate commitments”?
Professor, President of the Scientific Committee, Institute of Environmental Sciences, Université du Québec à Montréal, As an Individual
I do. I would say that most major investors are agreed on that.
The petroleum sector has a great deal of trouble in obtaining capital from major institutional investors because most of them have adopted policies that require them to withdraw from this sector, or at least no longer invest in it. The discussion is not yet over with respect to the gas sector, and the reaction to it is different.
Clearly, the risk of stranded assets is an extremely important consideration.
Liberal
NDP
Laurel Collins NDP Victoria, BC
Thank you, Mr. Chair. My first question is for Mr. Pineault.
In under a minute, Canada's biggest emitters in the oil and gas sector are paying the lowest carbon tax rate, contributing only one-fourteenth of the full carbon price. Shouldn't these companies be paying for their own pollution? Would you categorize these carbon tax loopholes as a fossil fuel subsidy?
Professor, President of the Scientific Committee, Institute of Environmental Sciences, Université du Québec à Montréal, As an Individual
I would characterize them as a subsidy to the sector, and they're not going to go away. They're not going to go and extract elsewhere, because of the resources here, so the idea that we should protect ourselves from them fleeing is not a good motif.
They're not losing money. They're making tons of money right now, and especially in the past three years. They're not investing as they were. Investment is down 43% from what it was in 2015. This sector is very particular and it's being overly protected by the government.
NDP
Laurel Collins NDP Victoria, BC
When it comes to the carbon capture, utilization and storage tax credit, can you talk a bit about how this could lead to carbon lock-in and prolonged fossil fuel dependence?
Professor, President of the Scientific Committee, Institute of Environmental Sciences, Université du Québec à Montréal, As an Individual
It depends on what we attach the CCUS to. If we attach the CCUS to extraction and refining, and if it's the type of investment that needs at least 20 to 30 years to pay itself back, that lock-in effect will be tied to the volume of what you're extracting and what you're refining.
If you start to extract less and refine less, you're going to lose money on your investment. There's a built-in incentive to keep production up, or even to expand production, because of the investment that you're making. You're not decarbonizing the whole life cycle of the barrel; you're decarbonizing only the extraction and refining of the barrel.
NDP
Laurel Collins NDP Victoria, BC
Thanks so much.
To Dr. Hoicka, on CCUS, can you talk a bit about this idea of carbon lock-in and fossil fuel dependence?
Canada Research Chair in Urban Planning for Climate Change, Associate Professor in Geography and Civil Engineering, University of Victoria, As an Individual
Basically, as Dr. Pineault said, if we are using carbon capture, utilization and storage in order to support increased production of fossil fuels, then this basically promotes fossil fuel lock-in, not only of our own economy, but also of other economies.
NDP
Laurel Collins NDP Victoria, BC
Please give a quick yes or no. Would you support a simple definition of subsidy encompassing any public financing to oil and gas?
Canada Research Chair in Urban Planning for Climate Change, Associate Professor in Geography and Civil Engineering, University of Victoria, As an Individual
Yes.
Liberal
The Chair Liberal Francis Scarpaleggia
Thank you for the brief answer and respecting the time limit.
Mr. Seeback.