Canada's Road to Net-Zero Emissions Pegged at $2 Trillion

The science is in and it's undeniable: To avoid irreversible consequences to our planet, we need to get to Net Zero—that is, a place where we remove as much greenhouse gasses from the air as we put in—by 2050. But where's the map to get us there? And what's the price tag?

Thanks to a year-long research project undertaken by RBC Economics and RBC's Thought Leadership group, the steps forward have become clearer. The report resulting from that year-long endeavour, The $2 Trillion Transition: Canada's Road to Net Zero, lays out six avenues that could help lead the way, as well as the investments and policies needed along the way. The $2 trillion figure? That's the estimated cost of ultimately getting us to Net Zero.

We dug into the comprehensive report to bring you a few highlights on where we are now and what we can expect in the years ahead. You can find the full report at thoughtleadership.rbc.com.

The Bad & Good News

Despite our reputation as vast and green, Canada is responsible for our share (and more) of greenhouse gas emissions—about 730 million tonnes annually. That makes us the world's 10th largest emitter, which maybe doesn't seem that bad until we realize that's out of 195 countries around the globe. While we're dumping as much pollution into the atmosphere as we did a generation ago, what has changed is our state of mind. For decades, Canadians have been vowing to go greener. The time appears to have come.

First Things First

Sometimes the first step is the hardest, so the Federal Government's first goal is to get emissions down to 500 million tonnes by the end of this decade. The technology we'll need is already well on its way, from electric vehicles to solar power heating to hydrogen-fuelled airplanes. However, the report points out, using these technologies to their fullest will only get Canada three-quarters of the way to Net Zero. And based on the researchers' estimates, governments, businesses and communities would have to spend at least $60 billion a year to cut Canada's emissions by 75 per cent. We currently spend around $15 billion a year, the report points out.

The Final Quarter

Once we pass the 75-per-cent-of-the-way-there mark, how do we bridge the final 25 per cent gap to reach Net Zero? According to the report, it's going to take innovations, new habits and transformed industries and lifestyles. Canada has already begun a “green grid" fed by hydro, wind and solar power, and from natural gas to renewables, we have a wealth of resources. A national green grid can help power our bigger emitters from carbon-heavy sectors like oil and manufacturing in cleaner—and cheaper—ways.

Six Pathways to Net Zero

The report identifies six of the most viable opportunities (pathways) to reaching Net Zero. They include ways to cut emissions from the electricity and oil and gas sectors, as well as from buildings, transportation, heavy industry and agriculture. The most essential? Successfully reducing emissions from the electricity and oil and gas sectors.

According to the report, the federal government expects oil and gas emissions to drop 53 megatonnes by 2030. After that, the view "is far murkier because it's difficult to predict how quickly current technologies will be adopted or new ones commercialized. Given what we know now, if $14 billion were invested by industry and government in green initiatives annually, 92 additional megatonnes could be eliminated in the oil and gas sector," the report says.

Small Changes, Big Difference

We get it: Change is hard. As the report notes, a low-carbon lifestyle can seem less convenient and is more expensive than sticking with the status quo. But it points out that even small tweaks, when multiplied by nearly 40 million Canadians, can add up to massive change. Two stark examples the report cites are the potential for up to 4 million tonnes of reduced emissions by lowering waste from fruits, vegetables and leftovers, and the potential to cut up to 1.7 billion tonnes globally by changing how we move, how much we heat and cool spaces and by using cement and other carbon-intensive materials more sparingly.

A Few Specifics

The report notes that every sector has a part to play in helping consumers make more informed decisions and offers up a few suggestions. How about mandatory disclosure of energy efficiency ratings and annual emissions for home-buyers? What if online retailers disclosed the impact of shipping options before you buy? What about bettering dark subways and crowded streetcars with amenities that make them a pleasure to take?

Long Story Short

Overall, the report concludes that getting to Net Zero won't be easy, but despite the challenges, it's within reach. Findings show that Canadians want a faster, more effective and more innovative response to climate change that ushers in a new era of ingenuity, prosperity and sustainability. It will mean getting creative, coordinating with federal and provincial leaders and moving forward in an inclusive and respectful way.

Find the full report at thoughtleadership.rbc.com.