Joe Biden’s ambitious climate agenda is Canada’s opportunity
Biden’s bold climate agenda offers tremendous opportunity for Canada; it can build upon its impressive climate and clean growth efforts by working with its major trading partner who now shares its ambition.
Canada-U.S. relations on climate and energy are off to a rocky start under Joe Biden. On his first day in office, Biden cancelled approval of the Keystone XL pipeline.
Despite this confrontational debut, in the larger scheme of things, Biden’s bold climate agenda offers tremendous opportunity for Canada; it can build upon its impressive climate and clean growth efforts by working with its major trading partner who now shares its ambition.
The Biden climate agenda is stunning in its reach. Its price tag is an eye-popping $2 trillion. Its scope is broad, targeting greenhouse gas emissions across all sources and sectors. And its leadership is strong and experienced: Biden has appointed former Secretary of State John Kerry and former head of the Environmental Protection Agency Gina McCarthy to call the shots. If implemented, this plan will permanently transform the U.S. economy and, with it, global markets.
ARTICLE CONTINUES BELOW
ARTICLE CONTINUES BELOW
Canada bet that this moment would come, and it is ready. While the Trump Administration was rolling back climate regulations, the Trudeau government and many provinces were ramping up their efforts: investing big in clean electricity, energy efficiency and electric vehicles; introducing and strengthening carbon pricing; and designing smart regulations to make Canadian industry cleaner and more competitive in a low-carbon global economy.
At the time, some criticized Canada for getting ahead of its major trading partner on climate action. But it now looks prescient.
The Biden-Harris Administration will soon match Canada in committing to achieve net-zero emissions by 2050. It will mark the first time ever that Canada and the U.S. have had matching climate targets. While the two countries’ approaches for reaching those targets won’t always align, there are many areas where there are clear mutual advantages.
The Biden climate plan calls for 100 per cent decarbonized electricity by 2035. That’s a crucial undertaking for the U.S., which still generates most of its electricity from fossil fuels like coal and natural gas. Canada, on the other hand, is already well on the way to eliminating coal power by 2030. It has an 80 per cent emissions-free electricity system (and rising), with some to spare. By exporting more surplus hydroelectricity to the U.S., both countries can gain.
A second area of mutual opportunity is transportation, a major source of emissions for both countries. The North American auto sector is highly integrated, making it hard for Canada to go it alone in this area. When Trump abandoned the higher vehicle fuel economy standards agreed to by Obama and Stephen Harper in 2014, it put Canada in a tricky spot. Biden’s commitment to bring back stricter fuel standards will allow both countries to go farther.
ARTICLE CONTINUES BELOW
ARTICLE CONTINUES BELOW
Similarly, Biden’s big push for more electric vehicles (EVs) will complement Canada’s existing efforts to grow EV use and manufacturing, and allow both countries to accelerate the shift to clean cars, vans and buses.
Further, Canada has built a world-class array of clean technology companies, which can help the U.S.’s efforts to drive low carbon growth across its economy, provided the Buy American barriers can be avoided, which will require diplomatic agility.
Other areas where the two climate agendas can align include agriculture and forestry, high-emitting industries like cement and steel, clean fuels, and fostering a just transition for vulnerable workers and communities. The countries also have mutual interest in co-developing emerging technologies like small nuclear reactors or capturing and utilizing waste carbon.
It is less clear, however, if the U.S. will follow Canada’s lead on a national carbon price (although state-led carbon pricing in California and the northeast will continue and probably grow). The U.S. may rely more on other policies to meet its climate goals; but most importantly, businesses on both sides of the border will soon have similar incentives to reduce emissions.
While Biden’s agenda will cause friction from time to time, like with the Keystone XL pipeline, the two countries share a vision and direction on climate change for virtually the first time in 12 years (other than a brief overlap with Trudeau and Obama), which can form the basis for building a cleaner, stronger North American economy.
ARTICLE CONTINUES BELOW
ARTICLE CONTINUES BELOW
And they can use this alignment to drive global progress. After a four-year hiatus, the world’s largest economy is now ready to rejoin Canada and others in building much-needed momentum for a more ambitious global climate agreement — to accelerate the transition to a low-carbon future worldwide.
Stewart Elgie is chair of Smart Prosperity Institute at the University of Ottawa. Brian Murray is the director of the Duke University Energy Initiative in North Carolina.