Resource industries need innovation

The latest report on climate change from the Intergovernmental Panel on Climate Change projects a frightening and costly future for human society unless much more concerted action is taken to change behaviour, develop and adopt major new technologies, change land-use patterns and move to new business models

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The latest report on climate change from the Intergovernmental Panel on Climate Change projects a frightening and costly future for human society unless much more concerted action is taken to change behaviour, develop and adopt major new technologies, change land-use patterns and move to new business models.

Yet the enormity of the challenges we face also provide great opportunities, as Wal van Lierop, president of a major clean-tech venture capital firm told a recent innovation summit at Waterloo University. The danger, the president of Vancouver-based Chrysalix EVC told the summit, is that Canada will fail to seize the opportunities.

As it is, he contended, British Columbia had lost its edge in the pulp and paper industry because it failed to innovate while its competitors did, arguing Canada has to move fast to innovate in its other resource industries if it doesn’t want to lose out in those as well. “If we don’t take the opportunity, others will,” he warned.

While Canada’s high-tech players suffer from what he called “Silicon Valley envy,” Canada has something Silicon Valley doesn’t have — natural resources. Applying clean tech to our natural resources, he contended, was Canada’s unique opportunity. Climate change makes it imperative.

Climate change is already having a destructive impact, he said: Glaciers are retreating, which affects future water supplies in Western Canada; warmer winters have meant that the ravenous pine beetle is destroying large swaths of B.C. forest; and ocean warming is threatening shellfish production on the B.C. coast. We can’t go on pretending it doesn’t matter.

Indeed, it is clear that advances in technology will be essential if the world is to avoid catastrophic climate change before the end of the century. Even with today’s population and way of life, there are big challenges. But between now and 2050, the world’s population is projected to grow from seven billion to nine billion, with a much larger world economy and many more people moving into the middle class, meaning much greater demand for food, water, energy and natural resources.

The prevailing climate consensus is that the world should aim to hold the average world surface temperature to an increase of no more than 2C by 2100, compared to 1750. But without significant new measures, the average surface temperature increase in 2100 is more likely to be in the 3.7C to 4.8C range, the IPCC warns, with catastrophic impacts likely well before then.

Canada is falling far short on its own emissions reduction commitment of a 17 per cent reduction from 2005 levels by 2020. Current estimates from Environment Canada show that 2020 emission levels will be largely unchanged from 2005. Oilsands production is a major reason that Canada is failing to keep its commitment.

Lierop argues that the world will remain hooked on hydrocarbons for the next two to three decades, until new technologies kick in on a much broader scale. But “we need to make hydrocarbons much cleaner and get more out of a barrel of oil,” he says. Canada’s goal, he argued, should be to become an exporter of clean, reliable, cheap and safe energy and an exporter of the technologies that make this possible.

In fact, clean-tech is becoming commercially competitive and we are starting to see major inroads. LED lighting, for example, has turned the lighting industry upside down. And now, says Lierop, we can see the same thing happening in solar energy, with the price falling 80 per cent since 2008. “So some technologies are now ready for prime time — some of the frogs are becoming princes.”

The need for future technological innovations will be enormous. Fossil fuel production in the future will require reliable and affordable carbon capture and storage systems. Renewable energy systems will need advances in battery technology so that power generated by wind and solar can be stored for future use. Water technologies will also be critical as climate change and the combined impacts of population growth and economic growth worldwide increases the demand for clean water and water treatment technologies.

Clean technologies could form the basis for a new innovation strategy in Canada, linked to our many resource industries, our capacity for food production and the need for water technologies. In a more crowded and resource-constrained world, no need will be greater than to meet basic human needs in a sustainable and cost-effective manner. It’s a challenge Canada could and should embrace.

Economist David Crane is a syndicated Toronto Star columnist. He can be reached at crane@interlog.com.

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