Decarbonizing Canada's Electricity Grids: A Path to Economic Benefit and Emission Reduction

Canada's commitment to reducing greenhouse gas (GHG) emissions and transitioning to a low-carbon economy is evident in its ambitious climate targets. The country aims to reduce its GHG emissions by 40% below 2005 levels by 2030 and achieve net-zero emissions by 2050. Decarbonizing the electricity sector plays a crucial role in meeting these targets, as it is responsible for approximately 25% of Canada's total emissions. The RBC Climate Action Institute's annual report, "Climate Action 2025: a year for rewiring," highlights the significant economic benefits that can be generated while reducing emissions through the decarbonization of Canada's electricity grids.

The report emphasizes the potential for job creation and economic growth in the clean energy sector. Canada's clean energy gross domestic product is projected to reach $107 billion over the next five years, driven by some $58 billion in annual investments by 2030, and more than 600,000 jobs. This growth is supported by the clean technology sector, which has been growing more than three times faster than the national average. The International Energy Agency's 2024 World Energy Employment report indicates that the number of people working in the global clean energy sector has already surpassed those in the world's oil and gas industry, demonstrating the potential for job creation and economic growth in the clean energy sector.



Decarbonizing the electricity grid can also lead to energy affordability and cost savings for consumers. An analysis conducted on behalf of the Canada Electricity Advisory Council found that Canadians could reduce their total energy-related costs by as much as $15 billion through the shift to a net-zero future. This suggests that the transition to clean energy can result in significant financial benefits for consumers.



Policy incentives and government support play a crucial role in accelerating the transition to clean energy. The RBC Climate Action Institute's report highlights the importance of government subsidies, internal funding, and C-suite buy-in in driving emissions reduction in organizations. Over half of executives surveyed identified these factors as key to driving climate action. Government policies and investments have been instrumental in driving climate progress in Canada over the past five years, with policy, capital, and consumers driving a near doubling of climate action in the country during this period.



However, the pace of change is slowing, and climate investment is slowing as well. Cleantech investments in heavy industry fell dramatically in 2024, with venture capital financing slowing to $158 million, compared to a combined $650 million on average in the previous two years. This slowdown can be attributed partly to an overall global downturn in investment flows and faltering investor sentiment around cleantech. To maintain momentum, governments must continue to provide policy certainty, smooth the path for clean energy projects, and collaborate on tailored approaches for every region.

In conclusion, decarbonizing Canada's electricity grids can generate significant economic benefit while also reducing emissions. The transition to clean energy can create jobs, reduce energy-related costs for consumers, and contribute to energy security. Policy incentives and government support are essential for accelerating the transition to clean energy, but continued investment and policy support are necessary to maintain momentum and overcome the challenges posed by a slowing pace of change and decreasing cleantech investment. By embracing the opportunities presented by the clean energy transition, Canada can build a more sustainable, affordable, and secure future for its citizens.