Lord Adair Turner in London, England, on May 9.Lauren Fleishman/The Globe and Mail
An authoritative figure on the global shift toward a low-carbon economy will arrive at a Canadian climate-policy summit this week with a message that momentum is much stronger than it might appear, at a moment of turbulence
Lord Adair Turner – who now heads the Energy Transitions Commission, an international coalition of senior executives and policy leaders aiming for a net-zero emissions economy by mid-century – has had a unique window into that shift since 2008. That’s when he became the first chair of the Climate Change Committee (CCC), a watchdog created by Britain’s Parliament that has set an international standard for holding government accountable for setting and meeting emissions-reduction targets.
His optimism stems from the scale-up and ensuing cost decreases of technologies to shift energy uses from fossil fuels to electricity, and to produce electricity cleanly, that have dramatically exceeded projections back then.
“We can now plan to decarbonize economies faster and cheaper than we dared think was possible in 2008,” he said, pointing to developments such as a nearly 90-per-cent price drop for electric-vehicle batteries and a comparable one for solar panels, in an interview with The Globe and Mail before appearing Tuesday at a conference hosted by the Canadian think tank The Transition Accelerator.
A crossbench (independent) member of the House of Lords, who also formerly headed Britain’s financial regulator, he is not one to sugarcoat. While acknowledging lack of deep familiarity with Canadian climate policy, he expressed the perception that the country is a laggard because of limited progress toward its emissions goals. And he acknowledged that as a major fossil-fuel producer, Canada stands to suffer some net economic loss as cheaper suppliers compete for declining demand, although he stressed that it should be better able to minimize that damage through diversification than less developed economies in similar situations.
“Broadly speaking, countries which are high-cost producers of oil and gas have to be relatively disadvantaged in this transition,” he said. “I think one’s got to be honest.”
But as recent phenomena such as a decline in EV demand growth and political backlash to governments’ regulatory efforts fuel mounting skepticism and anxiety about whether emissions can be swiftly reduced globally to minimize environmental disaster, he mostly offered a comparatively calm take that some technological advances are now too great to be derailed by bumps in the road.
That includes, even, the possible return to office next year of a U.S. president – Donald Trump – who actively opposes fighting climate change, which he discussed extensively in the interview.
Lord Turner did not dispute that such a sharp swerve away from Joe Biden, who has accelerated tech scale-ups by pumping many hundreds of billions of dollars into energy transition through the Inflation Reduction Act, would be a major international setback. While he doubts the IRA would be fully overturned, since much of the money is creating jobs in politically sensitive districts, scaling it back or even just refusing to expand or extend it would “be very bad for the world and it would be absurd to imagine otherwise.”
The loss of ambitious goal setting for emissions reduction in the U.S. would also undermine one of the ways he believes progress has been achieved. Trends to date, he said, show that when governments set credible long-term and intermediate targets, finance and industry boost investments in technologies to help meet them, bringing costs down and creating a “virtuous cycle.”
He contends, however, that despite U.S. policy having encouraged other countries (including Canada) to spend more to keep up, much of the world would now continue apace because of the unstoppable economics.
“There’s a set of technologies coming forward which I think are going to produce transformational change in Indonesia, in India, in Africa,” he said. “It’s getting to the stage where the combination of a solar panel plus a battery just becomes the cheapest way to produce electricity around the clock. In which case, even if America is slowing down, in a lot of other countries in the world, things are still progressing – they don’t switch off.”
A U.S. retreat from clean-tech competition, he said, would largely just lead to those countries – which “will import from the cheapest place possible” – relying even more on China, which already took a big lead in bringing down clean-tech costs before Mr. Biden’s efforts. And tariffs on Chinese imports to the U.S. (which Mr. Biden is also applying) wouldn’t do much to stop that.
Not that Lord Turner is convinced that U.S. industries already producing or adopting clean technologies would abandon that under a Trump presidency. For one thing, he said, executives increasingly recognize that climate-change seriousness is essential for attracting young talent. Plus, it might just be too inefficient to reverse course again.
For all that, he still sees plenty of need for proactive government policy, beyond just subsidies.
Asked where he’s most concerned about lack of capital flow currently, he mentioned electricity transmission and distribution as a challenge in most places. “A hell of a lot of renewable energy developments are stuck waiting for grid connections,” he said, requiring regulatory reforms and basic investments such as adding staff to permitting departments.
He’s also a believer in carbon taxes, not as the be-all and end-all of climate policy, but to provide value certainty for low-carbon investments. That’s particularly the case with pricing for heavy industry, which he was encouraged to learn may survive in Canada even if the consumer-facing fuel charge is eliminated by a future government.
“Ordinary consumers don’t sit down of an evening with an Excel spreadsheet and work out the net-present value of alternative courses of action, taking into account reasonable expectations of what the future price will be,” he said. “But that is exactly what the managers of steel, metals and cement companies do.”
In some of those industries, he noted, technologies that haven’t yet proven economical will still be needed to fully reduce emissions. That includes carbon capture – in which Canada has placed much stock, with little progress – for which a strong pricing regime could help.
Carbon capture, he said, is also an example of a type of technology that hasn’t yet scaled, because it can’t easily be modularized. While millions of standardized batteries or solar panels are now produced, carbon-capture projects involve bespoke engineering to fit industrial sites, keeping costs high.
The good news, per his assessment, is that while he still sees a need for that form of abatement, it’s more limited than he once thought, because of electrification’s progress.
“If you’d asked me how we were going to decarbonize our economy, I would’ve described a role for electricity, but not as much as I believe today,” he recalled of his time with the CCC. “And I would’ve described a role for wind and solar, but not as much as I believe today.
“All the technological trends,” he said, have since provided a certain clarity of purpose about how to affordably move toward net-zero emissions: “Electrify as much of the economy as you possibly can, and decarbonize it primarily with renewables.”