My presentation will be in English and French as well.
Thank you for inviting the Technologies of Energy and Energy Efficiency Research Group to participate in your work.
I will try to provide a different perspective on energy efficiency, based on my 30 years of work in the industry and, of course, in the academic and research sectors.
The abbreviation “t3e” stands for “technologies of energy and energy efficiency”. Our group is part of the École de technologie supérieure.
Slide 3 shows the two documents we basically use to talk about the energy situation in Canada in the courses we offer at the École de technologie supérieure. One of the documents is from the International Energy Agency, and the other was prepared by the Government of Canada in 2017. The Office of Energy Efficiency recently decided to use these publications, and we thank them for that.
As indicated on slide 4, today, I will tell you about the economic opportunities for energy efficiency in Canada. This is a very broad theme that has required some thought.
The outline of the presentation will be in four points: context, climate change, energy efficiency, and conclusion.
First, I must point out that economic growth has always been coupled with growth in energy consumption, as shown in the graph using the 2018 statistics from BP. From 1992 to 2017, we see that energy consumption increased. As can be seen on slide 7, the 2008 economic crisis clearly highlights the correlation between the economy and energy consumption. Indeed, the economic downturn was accompanied by a slowdown in energy consumption.
Slide 8 provides an overview of the energy demand projected for 2040. According to the International Energy Agency's “New Policies Scenario” document, energy consumption will increase by 25%, while according to BP's “Energy Outlook” report, this increase will be about 33%. So we won't be out of the woods. Demand will continue to increase, mainly because of the development of India, China and Asia more generally, as well as the demographic growth that those regions will experience.
An increase in energy consumption inevitably goes hand in hand with an increase in CO2 emissions, as you can see on slide 9. Renewable energy accounts for only about 10% of our total energy consumption. Hydroelectricity consumption is shown in blue. Renewable energy is in orange. In grey, red and green are the three sources of fossil fuels, which produce CO2. However, as shown on slide 10, fossil fuels account for more than 80% of energy consumption. This cannot be changed instantaneously.
How would you maintain your lifestyle with an 80% salary cut?
It would be absolutely impossible to do.
It will take decades for us to significantly reduce CO2 emissions. It will take 10 to 50 years, in my opinion.
On slide 10, the small table shows that carbon dioxide remains in the atmosphere for about 100 years after it is emitted. Today's emissions will still be there at the turn of the next century. The same is true for nitrous oxides, which have a life span of 120 years and are 300 times more harmful for global warming.
There's no need for me to tell you that we have no way of preventing a two degree Celsius increase in temperature on Earth, regardless of what we hear every day in the newspapers, on the radio or on television.
Slide 11 provides some figures that may seem alarming. I am not pessimistic, even though the figures are not very optimistic in themselves. I will talk about this later, if need be.
How can we prevent an increase of two degrees Celsius? As mentioned on slide 12, the problem should have been tackled when it was created in 1784. That's when James Watt designed his steam engine. It might also have been a concern when Joseph Fourier wrote his paper on global temperature in 1824 or when John Tyndall and Claude Pouillet published a paper that very clearly explained what the natural greenhouse effect was due to water vapour and carbon dioxide.
Furthermore, as indicated at the bottom of the same slide, more than a century ago, scientist Svante Arrhenius, who could have been the first to join the Intergovernmental Panel on Climate Change, proposed a model demonstrating that global warming would reach four degrees Celsius if CO2 concentration doubled in the air, and that is exactly the direction we have taken.
On slide 13, we see that we have enough oil, gas and coal to suffocate ourselves. Over the next 50 or 100 years, we will probably burn all the reserves we are currently aware of.
Slide 14 asks the question: does that mean we shouldn't do anything? Not at all. However, we will not stop climate change for environmental reasons; we will do so for economic reasons. I'm glad you asked the question. There are direct costs, because of hurricanes, storms and fires, as we have seen in California very recently, but there are also indirect costs. At some point in this century, foreign legislation will force us to adopt clean manufacturing methods and processes to create the products and services we will be exporting. One of these days, whether we like it or not, even if some governments are a little resistant to all this, we will be part of a large carbon market. This will become increasingly a problem for everyone. If we cannot stop it, we can at least slow it down for economic reasons.
Let me say a few words about energy efficiency before I conclude.
First, energy efficiency improves the productivity of our businesses. The more businesses consume, basically, the greater the difference will be. I find it very interesting to go into a foundry or an aluminum smelter, for example, and suggest solutions when they are possible. When companies consume less energy, they have more money. They can then invest it in research and development or human resources locally. That's important.
Why do companies prefer to invest in marketing to increase their annual sales rather than in measures to reduce their energy consumption? Well, that's because businesspeople know much more about marketing and sales than energy. That is very clear, in my opinion. As Mr. Luymes mentioned earlier, people don't know much about energy. It is much easier to count sales than it is to count energy. Personally, I have been doing this for a number of years, but it's still sort of a mysterious, strange concept.
In addition, having a five-year payback period is like having a 20% interest rate. When you invest in energy efficiency, the annual bottom line is not very good in the first year. That's why people prefer not to do it.
In addition, energy efficiency puts money in consumers' pockets.
The less energy they consume, the better Black Friday will be.
It will be very good for the GST and all the taxes collected. People prefer to spend on goods and services than pay energy bills. However, as Mr. Luymes mentioned, they do not fully understand how it works. Earlier, we were talking more specifically about geothermal energy. They need help to evaluate their options and to know what to do. They need information.
A five-year payback period is like having an interest rate of 20% for individuals as well. However, most of them would rather have a rebate,
a refund or a subsidy, instantaneously, rather than an appropriate payback.
That's on slide 18.
I will now move to slide 19.
Where should we stimulate energy efficiency efforts?
I would start with the industry, because it is the biggest consumer in Canada and it has international competition. If it reduces its production costs, it will be more competitive.
Transportation is the second largest energy consumer in Canada. Since almost 100% of this sector emits CO2, we are accomplishing two things at once by working on it.
In addition, as Mr. Luymes mentioned, in the residential, commercial and institutional sectors, there are many savings to be made, hundreds of thousands of jobs to be created and billions of dollars to be spent, whether in refurbishing buildings or creating new ones.
Finally, in agriculture, let's take, for example, the United States-Mexico-Canada Agreement, which has just been signed. Our farmers have to spend less energy to create their products, since they are now more directly competing with the U.S.
How to stimulate energy efficiency efforts? I am going to ask you a few questions, which you can find on slide 20.
Why don't the Danes buy cars? Why do the French buy smaller cars? Why do the Germans use solar energy when there is less sun in Berlin than in St. John's, Newfoundland, or any other Canadian provincial capital? How did Ontario get rid of coal in power production?
That's because money is the only language people understand. The Danes have received subsidies. In France, taxes on gasoline are imposed, which means that the cost per litre is twice or almost twice as high as here. For their part, the Germans have decided to make a
massive investment in feed-in tariffs
for solar energy, and their power in this area is comparable to that of Ontario, which took such measures a few years ago. I will not elaborate on that any further.
How can we stimulate energy efficiency efforts then? All the solutions proposed on slide 21 relate to money. We must increase the cost of energy. Having a strategic plan is fine, but you need an implementation plan backed by a measurement plan. Restrictive policies on energy intensity and efficiency are needed. We must participate in a carbon market. We could increase the excise tax on fuels or introduce a specific value-added tax on energy products, as in some countries, or implement a system of feed-in tariffs. Slide 22 lists other opportunities, such as investing in research and development or having working venture capital.
I'll move to slide 23 right away so that I don't take too much time.
Let me give you an example. From Newark, you have to pay $6 twice to get to the Lincoln Tunnel and $15 to cross it to reach Manhattan. Implementing tolls on bridges, tunnels and highways, and returning the money to public transportation is a practical solution, not just for aliens; our neighbours are doing it. This would create many jobs for decades. It would be much better than giving $8,000 to every person who buys a Nissan Leaf in Quebec, for example.