Canada is betting on climate failure

(National Observer, 22 May 2019) Oil and gas extraction has been a cornerstone of Canada’s economy for decades, but plans for expansion of the oil sands represent an enormous economic risk in a world moving to electric vehicles and action against climate change.

The federal and some provincial governments of Canada are not only planning to keep the oil and gas industry running at full steam, but to massively expand it. At the same time, the majority of demand for oil comes from fuel for road vehicles, a segment undergoing a huge technological transformation towards electrification. Canada appears to be grossly underprepared for a future where global demand for oil declines and not only that, our political and industry leaders are currently doubling down on oil as an economic engine — oil that is more expensive to produce than virtually anywhere else in the world.

The plans and investment decisions of the Canadian Government and oil industry leaders imply that, despite what they may be saying in press releases, they are assuming that we are headed towards two, three or more degrees of catastrophic warming globally. In other words, they are betting on global climate failure.

The IPCC’s recent special report, along with countless others, highlight the absolute urgency of addressing climate change. Global protest movements like the student climate strikes, Extinction Rebellion, Ende Gelände and others are increasing pressure on politicians, while at the same time dramatic cost reductions in renewable energy, battery storage systems and electric vehicles (EVs) mean solutions are clearly affordable and available. As global policy makers are finally starting to seriously consider the implications of these warnings and as technological solutions become clearly affordable, it increasingly looks like a massive shift will occur in the coming decade.

Rapid EV Adoption

One of the most important technological advances and the one that poses the biggest threat to Canada’s economy is the electrification of transportation. According to the International Energy Agency (IEA), road transportation accounts for about 50 per cent of global oil demand; the United States Energy Information Administration reports an even higher share of oil demand dedicated to road transportation for the U.S., Canada’s primary oil customer.

External link

National Observer, 22 May 2019: Canada is betting on climate failure