Decarbonizing Canada’s Grids Key To Emission Reduction

Canada's electricity grids hold enormous potential for emission reduction and economic growth, according to the RBC Climate Action Institute's latest report, Climate Action 2025: A Year for Rewiring. This report states that decarbonizing the nation's electricity sector can not only cut down greenhouse gas emissions but also act as a catalyst for economic expansion. Despite the progress made so far, unless Canada accelerates its efforts to deal with the problem, it risks missing its 2030 climate targets.

John Stackhouse, Senior Vice President at RBC, noted that there is now uncertainty over the climate in 2025 because of political change and economic adversity. While this complicates the action on climate, it also offers opportunities for businesses and governments to rebalance their approaches to climate policy as the global environment shifts. "2025 is shaping up to be a year of climate uncertainty. Political change and economic frustration have challenged how businesses and governments are thinking about climate action, but these same forces also offer opportunities to advance our collective approaches in a new global reality," Stackhouse said.

The report paints a mixed picture regarding the climate progress of Canada. In 2023, the emissions of Canada decreased by 0.8%, mainly because of the electricity sector. These gains are, however, insufficient to meet the ambitious 2030 emissions reduction targets of the nation, with projections indicating that Canada will only meet these goals by 2035. The slower pace of progress highlights the need for more aggressive action in the coming years.

Investment in climate-related technologies has also slowed significantly. In 2024, cleantech investments saw a sharp decline, with venture capital funding dropping from an average of $650 million to just $158 million. This reduction in investment is attributed to a global economic downturn, which has caused many investors to become more cautious. In addition to financial challenges, public concern over climate change has also decreased. Only 14% of Canadians now rank climate change as one of their top three concerns, a precipitous drop from 26% in 2019. Changing public perception can affect how policymakers prioritize climate-related policies.

Even with these recent setbacks, however, there are some bright spots in Canada's climate journey. Alberta is leading the way among regions, reaching the goal of eliminating coal-based power six years ahead of schedule. This has led to a decrease of more than six megatonnes in national emissions. Alberta is an example that other provinces can follow, proving that aggressive action can lead to real climate benefits. In addition, over half of Canadian executives polled for the RBC report cited key drivers of emissions reductions within businesses. These include government subsidies (55%), internal funding (53%), and executive buy-in (50%). Corporate action remains one of the crucial components of reducing emissions in Canada, and increasingly businesses are aware of the critical investment they make into sustainable practice.

The RBC Climate Action Institute released the Climate Action Barometer, an instrument to assess progress in areas of policy, capital, emissions, and technology. It said that though nearly double the number of climate action progress has seen since 2018, this growth rate now slows down and calls for renewal and urgency into the renewed quest to keep the country on its climate commitments course.

Many innovative companies are supporting efforts towards climate change in the country through groundbreaking approaches. For instance, Canada Nickel is currently looking to sequester carbon while mining ore with the hope of mitigating the negative impact of mining industries on the environment. In agriculture, Semex is working towards reducing the production of methane emissions from dairy cattle through targeted agricultural methods. These represent some of the critical roles that businesses must play in helping the country attain its climate goals.

As the 10th anniversary of the Paris Agreement approaches, it calls for bolder actions and a change of paradigms to revive the momentum on climate progress. Stakeholders are crucial, as both governments and the private sector join hands to plug investment gaps and revive public interest in climate issues while assuring that the Canadian climate commitment will be achieved. The report calls for greater significant action, insisting that the future of Canada's climate will be shaped by everyone in society.

The country has been making progress on efforts to curb emissions, but it is at a crossroads. The pace of action is not enough to meet 2030 climate targets, and the challenges looming ahead are massive. However, with bold leadership, increased investment, and renewed public engagement, Canada has the potential to achieve its climate goals while fostering economic growth. The path forward requires collaboration, innovation, and a renewed commitment to the climate agenda, with the hope that 2025 will serve as a pivotal year in the country’s efforts to combat climate change.