Canada, the United States, and Clean Energy: From Dialogue to Action

Co-authored with Mitchell Beer, Smarter Shift

When Canadian Prime Minister Justin Trudeau visits with President Barack Obama at the White House, it will be a once-in-a-mandate opportunity for the two leaders to move their countries' clean energy relationship from dialogue to action. After consulting with energy, climate, and trade specialists on both sides of the border, NRDC prepared a blueprint to both governments, to lay out the steps major economies like Canada and the U.S. must take to demonstrate leadership on their Paris commitments.

Since the Canadian election last fall, there's been no mistaking the warmer relationship between the two governments. But in the end, that only matters to the extent that it translates into real action and significant greenhouse gas reductions. With the Obama presidency in its final year, this is the moment for the two leaders to set their good will and good intentions in motion.

The United States and Canada have the world's largest trading relationship and share the world's longest unprotected border. The timing of this meeting, not yet 100 days after the United Nations climate summit, creates a shining moment for an energy efficiency and clean power agenda that can help both countries meet and exceed their Paris commitments, while setting off a torrent of 21st-century job creation.

That means the Prime Minister's state visit to Washington will be a resounding win if the two leaders treat it not as the culmination of the last eight years of dialogue, but as the beginning of a new era of collaborative, increasingly ambitious action. That era begins with things the countries already know how to do well, like coordinated energy efficiency standards for buildings, vehicles, and equipment. It extends into emerging areas like electric vehicle development, grid decarbonization, and a sustained, bilateral commitment to deep building energy retrofits.


Action Step #1: Climate Promises to Keep

It was an important step, but no more than a first step, when the U.S. and Canada unveiled their international carbon reduction commitments ahead of the Paris climate conference. This is the moment for them to take meaningful action to keep those promises. Then, for an encore, they must continually "ratchet up" their ambition along the road to a post-carbon economy.

The Paris summit was widely declared a success, but it wasn't because 196 countries had committed to the emission cuts that will be needed to hold long-term global warming to an average of 1.5°C. The good news was that almost all the countries adopted voluntary plans to get them part-way to the goal. The true test begins now, with the concrete, practical steps countries put in place to meet their targets.

For Canada and the U.S., that means aggressive reductions in emissions from the power plant (coal) sector in the United States, and ever-deepening carbon cuts in the tar sands sector in Canada. Aligning their efforts around a 2025 target date (Canada is currently working toward a 2030 goal). And agreeing to a process for reviewing and strengthening their climate plans, beginning in 2018, to set the stage for new, tougher targets at the end of the next decade.

Action Step #2: A Joint Climate Test

Both countries have seen recent momentum toward a climate test that would apply to all federal decisions on fossil fuel development, production, and transport. It was a huge milestone when President Obama cited climate impact in his decision to reject a permit for the controversial Keystone XL pipeline, the first time climate explicitly factored into a decision on a major piece of energy infrastructure. In January, Canada announced that it will now assess direct and upstream greenhouse gas emissions in its review of major resource projects.

But neither announcement takes either country all the way to a firm, consistent climate test that assesses every project's life cycle carbon emissions, its economic viability in a world moving toward 1.5°C, and its impact on national and international climate commitments. As a basis for making that assessment, the two leaders should direct the U.S. Energy Information Administration and Canada's National Energy Board to produce a validated safe climate scenario of global energy consumption and market demand, to serve as a reference case for future energy-related planning. This would provide decision-makers with a roadmap for a clean energy transition that is consistent with their Paris commitments, in place of the currently used "business as usual scenario" which assumes expanding global demand for fossil fuels and catastrophic levels of climate change.

Action Step #3: Fossil Fuel Subsidies

In 2013 and 2014, the United States spent nearly $20 billion per year on fossil fuel subsidies, mostly in the form of federal tax breaks, according to studies released just before the Paris conference by the Overseas Development Institute and Oil Change International. Canada averaged $5.6 billion per year in federal and provincial tax expenditures and public financing to fossil fuel production.

In 2009, members of the Group of 20 (G-20) nations agreed to eliminate fossil fuel subsidies. They still haven't delivered. This is an area where the U.S. and Canada can and must show leadership.

Action Step #4: Clean Energy Deployment: How to Collaborate Across Borders

The U.S. and Canada already have solid bilateral experience with some of the most important elements of a post-carbon future. The Prime Minister's visit is the perfect moment for them to ramp up that collaboration, to turn the northernmost two-thirds of North America into a clean energy deployment powerhouse.

They can accelerate the adoption of electric vehicles by building on past successes with harmonized CAFE standards, supported by the development of charging infrastructure and green vehicle corridors by sub-national governments.

While there has already been harmonization energy efficiency standards around appliances between the two countries, NRDC thinks the two countries could take energy efficiency collaboration to a whole new level.

And the two countries should undertake rapid, joint assessment of the emerging potential for grid modernization, energy storage, and north-south clean electricity trade, as key cornerstones of the effort to decarbonize North American electricity production.

What's Old Is New

The bonds of commerce, culture, and friendship between Canada and the United States go back nearly 150 years. So really, what NRDC is looking for at this week's state visit is a new twist on a very old conversation that focuses far more heavily on action than rhetoric.

The good news is that both countries are led by heads of state who appear to be committed to climate action.

The urgency to change the channel is driven by the threat of climate change.

The sense of promise is driven by the rising deployment and plummeting cost of energy efficiency and renewable energy technology.

So for Prime Minister Trudeau and President Obama, the biggest opportunity is to see this visit not as a continuation of business as usual, but as a new beginning for two emerging clean energy partners.

For a copy of the Blueprint, please go here.