Rosa Galvez

Rosa Galvez
ISG - Quebec (Bedford)

The federal government pays out around $3.3 billion in fossil fuel subsidies each year to support an industry that could cost the global economy trillions of dollars.

Yet the Conference Board of Canada projects that economic growth in Alberta — home to a considerable part of Canada’s petroleum production — will be led by the agriculture, agri-food, tourism and renewable energy sectors. Healthier economies are diversified economies.

It’s time for the federal government to eliminate fossil fuel subsidies and invest in renewable energy instead. With further innovation and refinement, technologies like hydro, solar, wind and geothermal power can create clean jobs and supply the increasing hunger for energy.

Do we even need to state the obvious? Renewable energy is not only clean but also cheap — or better yet, free.

Energy demand continues to rise across the world; with the global population expected to hit 8.1 billion by 2025 and improvements to living standards in developing regions, the rate of humanity’s energy consumption will only grow.

But energy demand is not necessarily synonymous with petroleum demand. Countries around the world are ever conscious of the negative impacts of human-induced climate change from fossil fuel burning; indeed Canada’s own federal government was elected on the promise to combat climate change.

Defending the environment is defending the economy. Heat waves, drought and flooding cost lives and livelihoods. Failure to keep global warming from increasing beyond 1.5 C could cost global economies $14 trillion, according to some estimates.

At home, the Insurance Bureau of Canada noted in a 2018 report that so-called catastrophic losses — disasters that cause damage in excess of $25 million — have been on the rise.

“Catastrophic losses due to natural disasters have increased dramatically over the last decade,” the report says. “This is not a Canada-only phenomenon; it is part of a worldwide trend.”

There are also losses that have become the accepted price of doing business. There are approximately 1.3 trillion litres of toxic liquids in Alberta tailing ponds that come from oil sands development. Spurring development of renewable energy will allow us to start cleaning up these sites more quickly.

If Canada is to divorce energy demand from petroleum demand, the country needs to step up its investment in renewable energy. From 2016 to 2017, Canadian investment rose to $2.7 billion — a 72% increase — but this was chiefly due to a $1-billion onshore wind project in Ontario. The new provincial government is unlikely to continue investments of this nature.

Investment by developing countries, on the other hand, dwarfs Canada’s modest commitments. Developing economies including China, India, and Brazil, invested $177 billion in renewables in the same year, compared to $103 billion of investment for developed countries.

The world is, slowly, weaning itself from fossil fuels. HSBC — Europe’s largest bank — recently announced it would stop financing for new oil sands development, coal plants and Arctic drilling, while Norway’s sovereign wealth fund is divesting itself of fossil fuels. Canada should be leading the charge instead of hanging back or we will be left behind.

There is also a risk that continuing fossil fuel subsidies will create what’s known as zombie energy — energy production that would not be possible without government subsidies. Given the trend toward renewable energy investment, to say nothing of the environmental and economic cost of fossil fuels, why should tax dollars support an industry that will not survive in its present form?

Replacing fossil fuels with renewable energy will not be easy. Nunavut, for example, is wholly dependent on diesel as an energy source. The Government of Nunavut understandably subsidizes diesel use, including diesel-based electricity generation, to the tune of $60.5 million annually.

That said, the Senate Committee on Energy, the Environment and Natural Resources heard evidence that diesel could be replaced with relatively cleaner fossil fuels with minor changes to existing infrastructure, potentially reducing health harms and environmental impact in northern communities.

Yes, the global demand for energy is increasing but we don’t have to meet it with subsidized fossil fuels. For our environment, for our economy and for our future, we should invest in clean, renewable energy technology instead. 

Senator Rosa Galvez, Ph.D., P.Eng., represents the Bedford division of Quebec. She is one of Canada’s leading experts on pollution control and she chairs the Senate Committee on Energy, the Environment and Natural Resources

This article appeared in the July 16, 2018 edition of The Hill Times.

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