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Clean tech funds key to Canada’s low-carbon future

September 17, 2011


The federal government is taking a regulatory, sector-by-sector approach to addressing  climate change concerns, putting it in step with the United States, our largest trading partner. This makes good sense.

In August, Environment Canada​ released a consultation paper on the development of proposed regulations to limit greenhouse gas emissions from new on-road heavy-duty vehicles, as well as proposed regulations to reduce emissions from coal-fired electricity.

Technology fund a legitimate form of compliance

But there is an opportunity to do more. Technology funds need to be recognized as a legitimate form of compliance and an important tool in meeting Canada’s reduction commitments.

In Canada’s energy-intensive economy, new and innovative clean technologies will play a pivotal role over the long term to help Canada transition to a lower carbon future. Climate related technology funds provide an important mechanism to reduce emissions and generate the investment required for innovation.

In Alberta, where energy is the backbone of our economy, the Conference Board of Canada predicts that between 2010 and 2014 it will invest more in clean technology to reduce greenhouse gas emissions than any other jurisdiction in Canada. Much of that investment comes through the Climate Change and Emissions Management (CCEMC) Corporation – a unique model that could be adapted for other jurisdictions.

Enabled through regulation, the CCEMC is an independent not-for-profit organization that provides ongoing, dedicated funds to support the discovery, development and deployment of transformative technology.

Funding for CCEMC is collected from industry. Since 2007, Alberta companies that annually produce more than 100,000 tonnes of greenhouse gas emissions are legally required to reduce their greenhouse gas intensity by 12 per cent (vs. 2005 operating baseline).

Companies have three options to meet their reduction target: improve the efficiency of their operations, buy carbon credits in the Alberta-based offset system or pay $15 dollars into the Climate Change and Emissions Management Fund for every tonne they emit over the reduction limit.

The CCEMC has several features that make it unique.

First, the funds that flow to CCEMC are not subject to normal government budget allocation processes but are segregated from general revenues and dedicated by law to emissions reductions or adaptation. They can’t be redirected to address some other need.

Second, funding is sustainable, as industry must renew their compliance annually. Every year, industry will provide new funds – we estimate we’ll receive between $50 to $100 million dollars in industry funding annually. And every year, we’ll provide opportunities for organizations to apply for funding to develop clean technology.

Real innovation requires transformative thinking and a long-term view with dedicated funding. A one-time investment is not sufficient. Our sustainable funding will help to nurture ideas from start to finish.

Third, CCEMC’s investment is leveraged: for every dollar CCEMC invests, about another four dollars are also invested. CCEMC has invested about $127 million to date and the projects we invest in have a combined value of more than $630 million.

Finally, CCEMC engages industry in the drive to find real solutions. It provides a direct and dedicated link between emitters, as a source of funds, and solutions for reduced emissions through clean technologies.

Of course investing the funds collected from industry directly into clean technology serves not only to reduce emissions over the long-term, but provides economic spin-off benefits as well.

While it’s challenging to make projections, a report from the Conference Board of Canada indicates that spending generated by technology funds between 2010 and 2014 in Alberta is estimated to boost real GDP by roughly $4.8 billion dollars and create about 50,500 person-years of employment.

Alberta’s new technologies will be commercialized

Over time, the new technologies we develop in Alberta will become commercialized and exports will generate additional economic benefits – carbon capture and storage technologies provide just one example where our province is playing a leading role. Alberta is investing more on carbon capture and storage on a per capita basis then any other jurisdiction in the world.

The CCEMC model could be adapted and applied more broadly in other provinces as well as part of efforts to reduce emissions and reduce the cost of developing the technology we need to help Canada move to a low carbon future.

Technology funds must be part of Canada’s policy response to climate change challenges. Technology funds deliver real reductions at the source, provide employment and ensure industries and jurisdictions maintain and enhance their competitiveness.

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