Reposted from The Globe and Mail March 12, 2012
The global energy market is undergoing a profound transformation as the debate on supply, security and sustainability escalates. While innovative technologies will be key to addressing the challenges that lie ahead, experts believe that the right policies are also essential to ensure that new approaches are developed and implemented successfully.
James Tansey, CEO of Offsetters, Canada’s leading provider of carbon management solutions, and executive director of Sauder S3i Research Centre at UBC Sauder School of Business, says carbon pricing, either through tax or cap and trade programs, is a sensible policy option.
“It is very difficult to make any of the models for sustainable energy work without internalizing some of the costs,” says Dr. Tansey. “For example, what the Government of British Columbia has done by putting a price of $30 a tonne on carbon sends a very strong signal to industry about what they need to plan for in the future.”
In some cases, he says, market mechanisms work well, such as in the case of a high-emission industrial operation that uses a significant amount of power. “A $30 a tonne carbon tax – equal to about $1.50 on every gigajoule of natural gas used in the factory – lets the operator plan for and respond to the tax through energy and transportation efficiencies and so on,” says Dr. Tansey.
In other areas, such as emissions standards, regulation may be the best approach. And he says governments could play a more prominent role in promoting investment in emerging technology, as the federal government does through Sustainable Development Technology Canada.
Jim Burpee, president and CEO of the Canadian Electricity Association, says Canada has one of the most reliable, affordable and sustainable electricity systems in the world, but faces a major challenge to renew, replace and expand infrastructure.
“The electricity system is the lifeblood of our economy,” says Mr. Burpee. “Changes in policies and legislation that create a clear and predictable regulatory environment will allow the $347 billion in investments planned between now and 2030 to be made efficiently, effectively and sustainably.”
He believes governments across the country have the capacity to take a holistic, integrated approach to energy regulation based on the principles of sustainable development. “While the electricity sector is working toward fostering greater public understanding and acceptance of electricity-related projects, we need governments to work toward clearing the decision path for infrastructure project approvals. Specifically, this takes the form of reforming the approvals process for large infrastructure projects. At the same time, we need governments to work with the industry to build public support for needed infrastructure investments,” says Mr. Burpee.
At the federal level, government has an important role to play in supporting investments in infrastructure- elated innovation, he adds. “Through investment in a Canadian energy innovation strategy, the government should consider greater public-private partnerships in research, development and the deployment of new technologies, use of an innovation fund, loan guarantees and other financial incentives,” says Mr. Burpee.
He adds that the industry is also concerned about looming labour shortages. “A recent report released by the Conference Board of Canada predicts that investment activity in the electricity sector will support an average of 156,000 jobs per year until 2030. But labour shortages will threaten the reliability and sustainability of Canada’s future electricity supply,” warns Mr. Burpee.
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