Cleantech has emerged as a crucial industry now more than ever. Here we look at the trends that are setting the tone for the industry.
With Canada’s climate said to be warming at twice the rate of the global average, cleantech has emerged as a crucial industry now more than ever.
An April report from Canada’s federal government details how the country’s climate has rapidly changed and how extreme weather events, including forest fires, will intensify in the future.
In Q1 2019, cleantech received significant attention, both in Canada and elsewhere in the world.
The differences among political parties on ways to combat climate change have been felt across the world — not just in Canada. Specifically, in the US, the introduction of the Green New Deal by Democratic Representative Alexandria Ocasio-Cortez received polarizing opinions across the political spectrum.
On that note, here the Investing News Network (INN) takes a look back on the first quarter of 2019 to see the different trends of the cleantech sector and what will shape the industry in the months ahead.
Cleantech market update: Polarized views across the political landscape
In his opening day remarks at the 2019 CanWEA Spring Forum in April, Robert Hornung, president of the Canadian Wind Energy Association (CanWEA), summarized the overall state of the renewable industry.
“Wind energy is fast becoming a non-partisan issue,” he said. “Across Canada, political parties have a variety of views on renewable energy.”
Hornung said that certain parties have outdated views on renewable energy; for example, he mentioned the idea that the industry is expensive compared to other forms of electricity generation. He also highlighted how other parties have adopted the view that renewable energy is cost competitive.
“We can’t deny that it is still true that the wind energy industry is, at times, the political football being punted between these two views,” he said.
In the first three months of 2019, diverse opinions from parties on cleantech and ways to tackle climate change intensified, with parties making several announcements.
The Canadian federal government’s budget, delivered in March, has a significant focus on cleantech as the country seeks to ramp up efforts to meet its 2030 targets. From giving out incentives to consumers for buying electric or hydrogen vehicles to building a wind energy project in Inuvik, the federal government touches on multiple areas with its budget.
Also in March, Ontario’s Conservative government upped its ante against the federal government in its quest to stop the carbon tax on its citizens. Ontario Premier Doug Ford connected the impact of the carbon tax to its effect on jobs rather than the environment. Ford said that the carbon tax will chase jobs out of the province, including manufacturing jobs, small business jobs and trucking jobs.
In his statement, Rod Phillips, Ontario’s minister of the environment, conservation and parks, stressed his province’s own plan to fight climate change. The Ontario government’s Made-in-Ontario Environment Plan promises to lower greenhouse gas emissions in line with the federal government’s target, but without a direct carbon tax.
Crucially, the province has taken the issue of federal carbon pricing to the Ontario Court of Appeal, where it was heard by a panel of five judges. The four day hearing began on April 15 and ended on April 18. The judges reserved judgment, with a decision likely to be made within the next six months.
Hornung said that the debate that is currently happening between the political parties on how to fix climate change rather than whether climate change is real or not is a welcome step.
He added that the topic of climate change will not be taken away from the spotlight, highlighting a report from the US Government Accountability Office (GAO). The report from the GAO states that climate change has accounted for US$350 billion in taxpayers’ money in the last decade. Further, Hornung highlighted a report from the Insurance Bureau of Canada that says the agency paid out almost $2 billion in insured damage in climate change-related events in 2018.
“There is no political consensus on how Canada should navigate a shift to a cleaner economy,” he said. “As it stands, Canada is not on track to meet its climate change commitments, and that weighs heavily in political narratives about how Canada should produce and use energy.”
Cleantech market update: US trending towards more clean energy
In March, New Mexico became the third state in the US to pass a bill stating that it will become entirely carbon free by 2045. The state joins California and Hawaii, along with Washington, DC, in going carbon free, while several other states are expected to follow suit.
As a result of these efforts, Clean Edge, a firm that focuses on stock indexes and benchmark reports on clean energy, said that four of its major indexes were up in the first quarter.
In the report, which was published in April, Clean Edge says that Ocasio-Cortez’s Green New Deal has put a focus on climate change.
“While it’s too early to know how this will all play out, one thing’s for certain, the Green New Deal has brought climate change and potential solutions to the fore,” the firm states.
Meanwhile, the Energy Information Administration (EIA) said in a report published in April that renewable energy will account for 18 percent of electricity generation in 2019. Further, the EIA expects that renewables will account for a 20 percent share in 2020.
As electricity generated from renewables is on the rise, the EIA predicts that energy-related carbon dioxide emissions will decline by 1.6 percent in 2019 and 1 percent further in 2020.
Cleantech market update: Political uncertainty could continue in Canada
In the second week of April, Alberta voted Jason Kenney and the United Conservative Party to lead the province.
In his victory speech, Kenney said that his party is serious about the challenges of climate change.
“We are world leaders in innovating to reduce emissions and shrink the environmental footprint of Canadian energy,” he said. “But as long as there is a growing global demand for oil and gas, the question is who will provide it.”
Kenney said that the world needs more Canadian energy and that it is a moral cause to share the country’s resources with the rest of the world.
Under the previous NDP government, Alberta was in the spotlight thanks to its wind energy having the lowest price in Canada. The province is home to 12 percent of total wind capacity in Canada at 1,483 megawatts.
While it remains to be seen whether Kenney will follow Rachel Notley’s government in procuring more wind energy, CanWEA is looking to extend the presence of wind energy in the region.
“Alberta has all the makings of a true energy powerhouse, and not just where oil and gas are concerned,” Evan Wilson, regional director of CanWEA, said in a release. “The wind industry is keen to work with the UCP government to help Alberta turn that investment into low-cost, clean and flexible power that creates jobs and provides significant benefits for rural and Indigenous communities across the province.”
Cleantech market update: Investor takeaway
While it remains to be seen what Alberta does with renewable energy and what the judgment will be on the case between Ontario and the federal government, the focus on climate change and cleantech is here to stay.
Despite differences in views on tackling climate change, political parties across the spectrum have plans in place for meeting climate change targets. Consumers and investors certainly have plenty to look forward to in the coming months.
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Securities Disclosure: I, Bala Yogesh, hold no direct investment interest in any company mentioned in this article.