Environment Committee on April 26th, 2022

[Terry Duguid, Liberal, Winnipeg South, MB]

Thank you, Mr. Chair.

I would like to thank our witnesses for some great testimony. I would also like to welcome our friend Mr. Cosbey from IISD, which is located in Winnipeg. We're very proud to host them. I congratulate them on the support for the experimental lakes area that we provided in the 2022 budget.

Mr. Chair, I have a couple of comments and then a question or two for Mr. Golinowski, who I am very happy is with us today.

Mr. Golinowski, I think you probably followed with interest our emissions reduction plan that was released a few weeks ago. It's a mix of measures, with pricing, which I think everyone has emphasized is important, but also support for clean technology and a variety of technologies, including CCUS. A number of our witnesses have portrayed the technology as “unproven” and “utterly ineffective”. Those are direct quotes. Mr. Cosbey has just raised some concerns about stranded assets, and that this would not be a particularly good use of public funds.

In your view, can we get to our ambitious targets? I know that some people think they're not ambitious enough, but they're 40% to 45% by 2030 and net zero by 2050.

As well, given what is happening in the U.S. with the 45Q tax credit that the Biden administration is not only supporting but amplifying, what would happen if that incentive were not in the 2022 budget? Where would that investment go, and where would it leave our country?

[Craig Golinowski]

That's an important point. I think the United States is taking a much more realistic view of reducing emissions in terms of integrating carbon capture and storage as a solution.

You know, for industries, if Canada is not competitive, then perhaps you could just shut down the fertilizer plant here and move it to Montana, for example. If you're facing a carbon tax without an ability to reduce those emissions in an industrial way, when across the border the alternative would be that the United States government essentially pays for your capture and sequestration solutions straight away, it's simple. You shut down in Canada and reinvest in the United States.

[Terry Duguid, Liberal, Winnipeg South, MB]

Thank you for that.

My follow-up question, Mr. Chair, will probably bring me to the end of my time.

The UN International Energy Agency and I believe the IPCC “working group III” report both say that CCUS is essential to meeting global targets for greenhouse gases. That's my understanding. Yet, on the other hand, they do say that we do need to phase out the use of fossil fuels. I wonder if you would have a comment on that.

In terms of scaling up this technology globally, isn't technology transfer to China, to India, really where we need to go? Again, I take Mr. Mazier's point. We have some of the highest per capita emissions, but in the great scheme of things, our emissions as compared with China and India, of course, are not as large. We need to help those nations with technology transfer. Of course, the atmosphere is the commons, and we are experiencing the tragedy of the commons with increasing greenhouse gas emissions.

[Craig Golinowski]

These projections and scenarios that show the elimination of fossil fuels are total speculation; there's no evidence for it. They're projections made on simulation models to show a mathematical process of how you could possibly do this.

China and India are rich, natively, in coal; they will continue to use coal. If we are unable to show how to use carbon capture and storage so that we can export that to China and India, they'll use coal unabatedly, and we will have no chance of meeting any of our global targets. These are the harsh realities.

[The Chair, Liberal, Francis Scarpaleggia]

Perfect.

Ms. Pauzé, you have two and a half minutes.

[Monique Pauzé, Bloc, Repentigny, QC]

Mr. Chair, I am going to give my two and a half minutes to Ms. May.

[The Chair, Liberal, Francis Scarpaleggia]

All right.

You have the floor, Ms. May.

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

Thank you so much, my friend.

There's so much to cover on the evidence we've had in the two rounds.

I'm going to focus my questions to Aaron Cosbey, and I'm doing this in tribute to my Conservative friends, because I was at the press conference where Brian Mulroney and Gary Filmon launched the International Institute for Sustainable Development. I recall that the first prime minister who promised to eliminate fossil fuel subsidies was Stephen Harper at the G20 in Cincinnati. I like to sometimes use my memory and challenge Google. I can't find, on the IISD website, Aaron Cosbey, the first report, but my memory says that Aaron Cosbey and IISD may have done the first groundbreaking work on fossil fuel subsidies before we pledged to get rid of them.

My question to you, Mr. Cosbey is this: Am I right? How long have you been working on this? Give us your best advice about how fossil fuel subsidies are preventing us from holding to a habitable planet.

[Aaron Cosbey]

My memory is not much better than yours; I'm getting advanced in years. It has been a couple of decades, so yes, you are right, our work on this stuff precedes Canada's commitment to phase out fossil fuel subsidies.

At the foundation of that work is what you imply, the basic premise that subsidizing fossil fuel consumption in a time of climate emergency is akin to putting your foot on the accelerator as you head toward a cliff, when what you should be doing is braking and changing course. We don't need more production and consumption of fossil fuels—that's what fossil fuel subsidies encourage—we need less. We need those same public dollars to go towards finding the very real solutions, the replacements for fossil fuels, which exist. Green hydrogen is a replacement for fossil fuels in fertilizer production and in steel production.

We have the technologies to replace fossil fuels in industrial production, in transport, in residential heating. They exist; it's not a fairy tale.

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

Do I have any time left?

[The Chair, Liberal, Francis Scarpaleggia]

You have 10 seconds for a comment.

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

To Aaron Cosbey, do we need coal to make solar panels?

[Aaron Cosbey]

No, we do not. You usually use it to make copper.

[The Chair, Liberal, Francis Scarpaleggia]

Okay.

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

It was a bit absurd, but I didn't get anything on the record in 10 seconds.

Thank you.

[The Chair, Liberal, Francis Scarpaleggia]

We did get the answer to that question.

Ms. Collins.

[Laurel Collins, NDP, Victoria, BC]

Thank you so much, Mr. Chair.

My colleague, Mr. Duguid, just said that the IPCC says that carbon capture utilization and storage is essential. That's not how I read the report.

My question is to Mr. Cosbey. It turns out that we recently found out that Canada actually lobbied the IPCC to increase the importance of carbon capture in the text. I'm curious if you have any comments on this.

[Aaron Cosbey]

I always have a comment.

Carbon capture and storage is essential, especially in sectors like cement, where we don't see a clear pathway to deep decarbonization. We used to think it was essential in sectors like steel, but technological progress has pushed us to a point where now we see those pathways, and I'm sure we'll see those pathways in future in cement too; but for the moment, it's useful in those sectors.

It is not necessarily useful in the oil and gas sector. I go back to my point. These sectors are very different. The IPCC report, the third working group report that just came out, ranked all the possible solutions in terms of feasibility, and cost and carbon capture was this small, red-coloured portion at the bottom—high cost, high risk. If you want to pick a solution to decarbonization, it's not CCUS.

[Laurel Collins, NDP, Victoria, BC]

You mentioned that you support some subsidies, especially those that support northern, remote indigenous communities.

Can you give us a picture of how the dollar amounts compare, which those current subsidies make up, versus the subsidies that you wouldn't support?

[Aaron Cosbey]

I can give you a snapshot of how much we are currently putting in public support toward renewables versus fossil fuels. It's 12:1. Let that sink in. That doesn't speak well to how we are prioritizing real climate action.

[Laurel Collins, NDP, Victoria, BC]

Would you like to respond to Mr. Golinowski's comments about how we rely on fossil fuels to make renewable energy, and that we need to invest in fossil fuel companies?

[Aaron Cosbey]

We currently use coal to produce copper. That's true. We use diesel in the vehicles which mine the copper and process it, but you can also use hydrogen in those vehicles. Hydrogen can be produced through electrolysis.

Green hydrogen is the wave of the future. If you want to invest in the green energy of the future that has a promising sustained prosperity for the future of Canadians, invest there, because that is also possible. Because we do it now doesn't mean we have to do it.

[The Chair, Liberal, Francis Scarpaleggia]

Thank you.

We'll now go to Mr. Carrie for five minutes.

[Colin Carrie, Conservative, Oshawa, ON]

Thank you, Mr. Chair, and thank you to the witnesses. I find the conversation incredibly informing and interesting.

I did want to go back to Mr. Golinowski.

One of the comments you made, which I think was poignant, was that the goal should be eliminating greenhouse gases, not fossil fuels. I would like to investigate some of the pragmatic solutions you may have on the top of your head. I know in Europe, for example, Germany did eliminate some of its traditional ways of generating electricity. Now, under times of stress, I think it was forced to increase production with coal. Mr. Duguid mentioned how we in Canada have some technology, and we should be helping some of these emerging economies move forward.

Could you comment on some of these pragmatic solutions that perhaps Canada could be sending out around the world to help achieve our goals as a global contributor in decreasing greenhouse gases?

[Craig Golinowski]

As a starting position, a price on carbon is absolutely essential. Valuing carbon is the starting point for all the discussions, so that fossil fuels, renewables, cement, steel, power, and fertilizer...We all compete to solve the emissions problems by knowing precisely what the value is for avoiding that carbon emission. That's absolutely essential.

Carbon price must not be subject to political change. In other words, the biggest challenge we're facing right now, when we speak to institutional investors like pension funds, is that people don't believe the federal carbon tax is durable up to $170 a tonne, and that it will ultimately be changed through the political process. Having contractual guarantees, or some sort of assurance, that the value of an avoided emission remains in place is absolutely critical.

The problem, generally, is if the government is picking winners or losers, or the market forces are not functioning. In Germany, for example, the Germans shut down effectively their nuclear industry on the advice of environmentalists perhaps who suggested that renewables would be able to replace that baseload energy. In fact, the result has been an increase in the use of coal, and an ability for Russia to weaponize energy supply to Germany. Taking away reliable baseload energy on the basis of perhaps an ideology is something we absolutely have to avoid.

Carbon capture is an overall solution. I deeply believe that it plays a pragmatic role, because I start from the basic proposition that the growth in the human population, how the modern world works, is based on fossil fuels. This idea that we're just going to simply eliminate fossil fuels, I don't accept that. I start from, what are we actually going to do about this problem, given what the reality is today? What can I do when I wake up tomorrow?

We've committed ourselves to advancing carbon capture and storage, because we genuinely see a pathway to using our skills in a subsurface, our engineering skills, our financial structuring skills, to deploy capital, and have projects come to fruition that begin to reduce emissions.