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Canada's Net Zero Future

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Canada's Net Zero Future CANADA’S NET ZERO FUTURE: Finding our way in the global transition 1 Cover and following page: Traditional territory of the Blackfoot/Niitsítapi, Ktunaxa ?amak?is, Stoney and Tsuu T’ina CONTENTS 1. INTRODUCTION .................................................................................................................................................................................3 2. DEFINING CANADA’S PATHWAYS TO NET ZERO ............................................................................................... 8 2.1 What does Canada’s net zero goal mean? ............................................................................................................ 8 2.2 How to think about pathways to net zero ...........................................................................................................10 2.3 Our analytical approach .....................................................................................................................................................16 3. CANADA’S MULTIPLE PATHWAYS TO NET ZERO ..............................................................................................21 3.1 The feasibility of a net zero transition in Canada .............................................................................................21 3.2 How we use and produce energy in a net zero Canada..........................................................................24 4. SOLUTIONS ON CANADA’S PATH TO NET ZERO ...............................................................................................35 1 4.1 Buildings: how we heat our homes and workplaces ..................................................................................35 4.2 Transportation: how we move people and things .......................................................................................45 4.3 Industry: what we make ...................................................................................................................................................56 4.4 Negative emissions: putting the “net” in net zero ...................................................................................... 68 5. SAFE BETS AND WILD CARDS ..........................................................................................................................................77 5.1 Shaping Canada’s net zero pathways .....................................................................................................................77 5.2 Three possible net zero energy systems for Canada ................................................................................. 89 5.3 Primary drivers of Canada’s net zero future ......................................................................................................99 6. MAIN FINDINGS .............................................................................................................................................................................101 7. RECOMMENDATIONS .............................................................................................................................................................106 ANNEXES.....................................................................................................................................................................................................110 Annex 1: An overview of key findings from similar studies ............................................................................110 Annex 2: Detailed breakdown of modelling scenarios ...................................................................................... 115 Annex 3: Canada’s greenhouse gas emissions by economic sector .....................................................120 Annex 4: GHG reduction pathways in different economic sectors ......................................................... 121 REFERENCES ..........................................................................................................................................................................................124 ACKNOWLEDGEMENTS ................................................................................................................................................................. 131 ABOUT THE INSTITUTE The Canadian Institute for Climate Choices brings together experts from diverse disciplines to undertake rigorous research, conduct insightful analysis, and engage a range of stakeholders and rightsholders to bring clarity to the climate challenges and transformative policy choices ahead for Canada. We are publicly funded, non-partisan, and inde- pendently governed. Learn more at climatechoices.ca INTRODUCTION Canada has committed to reducing its green- In fact, we heard many divergent views regard- 1house gas (GHG) emissions to net zero by 2050. It ing which visions were most likely and most has proposed new legislation that legally commits desirable when we engaged perspectives from the country to that goal and creates a mecha- across the country—including experts within nism for defining five-year milestones on the way the Institute. Opinions differ about the prospects to achieving it. But what does all of this mean in of different net zero technologies and energy practical terms? This report seeks to bring clarity systems. And the “net” in net zero is itself open to to Canada’s efforts to achieve its net zero target— a wide variety of interpretations. To what extent examining what it will take to get there and how does net zero mean reducing existing emis- reaching this goal could shape our shared future. sions at the source, versus capturing and storing GHGs, whether through nature-based solutions Put simply to reach net zero Canada would need or engineered ones that use technology? to take as many emissions out of the atmosphere as it puts in, rather than leaving them there to In other words, the idea of achieving net zero trap heat and contribute to climate change. raises as many questions as it answers. What That requires shifting toward technologies and might a net zero economy look like in this coun- energy systems that do not produce emissions, try in more concrete terms? Can Canada get and offsetting any remaining emissions by from here to there in 30 years? What are the removing GHGs from the atmosphere and stor- broader implications of doing so? What choices ing them permanently. must Canadians make along the way? And what factors are beyond Canada’s control? Yet achieving net zero—and understanding what that means for life in Canada between now and Tackling these questions now is essential. 2050—is far from straightforward. Our research Though 2050 may seem remote, 30 years is actu- demonstrates that a range of very different ally a very short timeframe to transform Canada’s visions of Canada’s net zero future would be economy and energy system in ways that sustain consistent with that overarching goal. or enhance the prosperity and well-being of CANADA’S NET ZERO FUTURE: Finding our way in the global transition 3 1. INTRODUCTION Canadians. Achieving net zero by 2050 requires they are similar and the ways they are different. immediate planning and action. Without policy Separating these convergences and divergences initiatives to drive Canada’s progress toward net can better inform Canada’s vision of the net zero zero, the country will continue to build long- future while also providing clarity on the policy lived, emissions-intensive infrastructure, making choices that will take the country there. long-term emissions reductions harder and First and foremost, we find thatnet zero by 2050 more expensive—even while the impacts of a is achievable for Canada and many pathways changing climate intensify and global markets could lead to that goal. While some of the path- race toward low-carbon solutions. ways that we consider could ultimately prove The economic, social, and environmental costs unavailable (depending on domestic and global of climate change impacts are immense and technology and market and policy outcomes), growing, and they underscore the importance enough potential routes to net zero exist overall of taking decisive action. The Institute is produc- that we conclude that the net zero goal is achiev- ing a series of reports to identify and quantify able. Yet, the existence of multiple potential these impacts in Canada and show the bene- pathways does not mean navigating any single fits of prioritizing adaptation and resilience one will be easy. Reaching a net zero goal will be alongside emissions reductions. The first report a complex and challenging project regardless of the series, Tip of the Iceberg: Navigating the of which pathway Canada takes, requiring strin- Known and Unknown Costs of Climate Change gent and effective government policy at a level for Canada, was released in December 2020 well beyond any implemented to date. (Sawyer et al., 2020). We find that between now and 2030, the Ultimately, governments in Canada must keep cost-effective solutions to reducing emis- both the short term and the long term in sight sions are broadly consistent. Many solutions— to successfully manage a net zero transition. including improving energy efficiency, They must respond to the urgent need for action shifting to non-emitting electricity, adopt- by pursuing a pathway to meaningfully reduce ing heat pumps and electric vehicles—will emissions over the coming decade (in order to likely be part of Canada’s net zero journey no meet Canada’s 2030 target to reduce GHG emis- matter
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