Technology and Policy Options for aLow-Emission Energy System in Canada
Findings of an Expert Panel on Energy Use and Climate ChangeSeminar Presented byKeith W. Hipel
University Professor, PhD, DrHC, PEng, Hon.D.WRE, FRSC, FCAE, FEIC, FIEEE, FASCE, FAWRA, FINCOSE
Department of Systems Design Engineering
University of Waterloo, Waterloo, Ontario, Canada N2L 3G1
Past President, Academy of Science, Royal Society of Canada
Senior Fellow, Centre for International Governance Innovation
Fellow, Balsillie School of International Affairs
Coordinator, Conflict Analysis Group, University of Waterloo

Abstract
A synopsis is presented on the key findings of the Council of Canadian Academies’ Expert Panel
Report on energy use and climate change, which was released in late October of 2015. Theevidence is clear: increased greenhouse gas emissions from human activity are causing pervasivechanges to the Earth’s climate, and significant and rapid efforts will be needed to reduce theseemissions in the coming decades. The Panel’s report is an up-to-date, accessible review ofoptions for reducing greenhouse gas emissions and moving Canada toward a low-emission future.
It provides an overview of Canada’s energy system, an analysis of different energy sources andtechnologies, and an exploration of the public policies available to support a shift toward lowemission energy sources and technologies. Moreover, the investigation is guided by a systems
thinking approach, recognizing the interconnectedness of society and the natural environment
supporting it. Overall, the Panel acknowledged that the technologies needed for moving toward alow-emission energy system and the policies required for promoting the use of thosetechnologies, already exist, are well-understood and are constantly improving. Optimal
strategies and policies for advancing reductions in greenhouse gas emissions will need to beadaptive by evolving as necessary in response to emission trends, new technologicaldevelopments, and other social, economic, and political changes. They will also benefit fromsystem level principles of resilience, sustainability, fairness, and integration across jurisdictions
and disciplines. The report constitutes an indispensable resource for private sector decisionmakers, different levels of government, and the public as they seek to better understand energy
use and the options available to combat climate change.

−38−Acknowledgement
This seminar presentation is entirely based on the following Expert Panel Report, which wasorchestrated and published by the Council of Canadian Academies (CCA) located in Ottawa,Ontario, Canada. The Expert Panel consisted of a multidisciplinary group of eight experts, forwhich K.W. Hipel and P.R. Portney were the Co-Chairs, as well as an Assessment Team fromthe CCA. Magna International Inc. kindly funded the project.

Expert Panel Report
Council of Canadian Academies (CCA), “Technology and Policy Options for a Low-Emission
Energy System in Canada”, Report of the Expert Panel on Energy Use and Climate Change,
Report released on October 27, 2015, by the CCA, Ottawa, Ontario, Canada K2P 2K3, 2015.
(This report can be downloaded free of charge at http://www.scienceadvice.ca)

Speaker Biography
Keith W. Hipel is University Professor of Systems Design Engineering at the University ofWaterloo where he is Coordinator of the Conflict Analysis Group. He is Past President of theAcademy of Science within the Royal Society of Canada, Senior Fellow of the Centre forInternational Governance Innovation, Fellow of the Balsillie School of International Affairs, andPast-Chair of the Board of Governors of Renison University College. Dr. Hipel thoroughly
enjoys mentoring students and is a recipient of the Distinguished Teacher Award, Faculty ofEngineering Teaching Excellence Award, and the Award of Excellence in Graduate Supervisionfrom the University of Waterloo, as well as the 2011 Outstanding Engineering Educator Award
from IEEE Canada. His major research interests are the development of conflict resolution,
multiple criteria decision analysis, time series analysis and other decision-making methodologies
for addressing complex interdisciplinary system of systems engineering problems lying at theconfluence of society, technology and the environment, with applications in water resourcesmanagement, hydrology, environmental engineering, energy, and sustainable development. Prof.
Hipel is the author or co-author of 4 books, 12 edited books, more than 285 journal papers, aswell as many conference and encyclopedia articles (over 10,160 citations; H-index = 49, i10index = 211). Dr. Hipel is the recipient of the Japan Society for the Promotion of Science (JSPS)
Eminent Scientist Award; Joseph G. Wohl Outstanding Career Award from the IEEE Systems,
Man and Cybernetics (SMC) Society; IEEE SMC Norbert Wiener Award; Docteur Honoris
Causa (France); Doctor Honoris Causa (Hungary); Sir John William Dawson Medal (RoyalSociety of Canada); and Engineering Medal for Research and Development from Professional
Engineers Ontario.

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“Technology and Policy Options for a Low-Emission Energy
System in Canada”, Report of the Expert Panel on Energy Use andClimate Change㸸Overview*

The Expert Panel on Energy Use and Climate Change
Council of Canadian Academies (CCA)

A reliable energy system is essential for a functioning society, and improvements inhumanity’s capacity to harness energy from a range of sources have helped raise living
standards around the world. Canada, like many countries, relies on fossil fuels for mostof its energy. Coal, oil, and natural gas together account for 72% of Canada’s energy
supply, and they are the dominant sources of energy used for transportation, spaceheating, many industrial processes, and electricity generation in some provinces. The
burning of these fuels is increasing the amount of carbon dioxide in our atmosphere andcausing pervasive changes in the Earth’s climate. The resulting widespread andsubstantial risks to society and ecosystems justify significant, accelerated efforts toreduce greenhouse gas emissions from human activity over the coming decades. TheCouncil of Canadian Academies (the Council) was tasked with synthesizing theevidence on select energy sources and technologies, as well as public policies, that would
be involved in a transition to a low-emission energy system in Canada. This chargecame in response to frustration among some business leaders that stemmed from a lackof clarity about key facts relating to energy technologies and climate change, and policy
options to address this challenge. To address this charge, the Council convened amultidisciplinary, eight-member expert panel (the Panel) comprising people withexpertise in economics, public policy, engineering, and energy systems and technologies.
From its discussion and review of the evidence, the Panel identified three key findings.

This paper is a part of the report “Technology and Policy Options for a Low-Emission
Energy System in Canada”, Report of the Expert Panel on Energy Use and ClimateChange” by the Expert Panel on Energy Use and Climate Change, Council of CanadianAcademies (CCA). The report is available at http://www.scienceadvice.ca .
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Finding 1: Canada could achieve major emission reductions with the adoption ofcommercially available technologies.
Over the course of the next several decades, a transition to a low-emission energy
system would involve three main strategies: improvements in energy efficiency, a shift
from high-emission to low-emission energy sources (i.e., energy substitution), andpossibly the adoption of carbon capture and storage (CCS) technologies. Improvements
in energy efficiency can result in early gains and provide a foundation for the
cost-effective introduction of low-emission technologies, but deeper emission reductions
will require energy substitution and potentially the application of CCS in conjunction
xii Technology and Policy Options for a Low-Emission Energy System in Canada with
continued fossil fuel use. Taking advantage of existing technologies in these areas andacross the transportation, building, and industry sectors could result in emission
reductions on a large scale. Promising options for reducing emissions include:• Transportation: Ongoing efficiency gains for all vehicles, increasing reliance on
low-emission electricity for passenger transportation, expanding use of biofuels in
freight transportation, and long-term urban planning and investments intransportation infrastructure.
• Buildings: Ongoing efficiency gains in new buildings or in conjunction with building
renovations, transitioning to electricity for space heating in highly energy-efficientbuildings, and selective adoption of community heating systems that capture and use
waste heat and/or rely on renewable energy sources.
• Industry: Ongoing efficiency gains in industrial processes, reduction of fugitiveemissions, application of CCS in suitable industrial processes, and electrification andenhanced use of biomass in applicable industrial applications. However, given thehigher cost of these technologies relative to conventional options, they are unlikely to
be widely adopted unless stringent, compulsory policies are introduced. Further
innovation and technological development is also essential for reducing the costs of
low-emission energy technologies over time.

Finding 2: Low-emission electricity is the foundation for low-emission energysystems.
Switching to low-emission electricity eliminates carbon dioxide emissions from power
generation and allows for further emission reductions as the transportation, building,−41−

and industry sectors gradually increase their use of electricity as an energy source.
Many Canadians live in jurisdictions that already benefit from lowemission electricity;
however, future emission reductions will require a transition in provinces that stilldepend on emission-intensive electricity sources such as coal, as well as expanding lowand non-emitting generation in all provinces to meet growing demand. This expansion
will require careful planning to integrate higher shares of electricity generation fromintermittent renewable sources (such as solar, wind, and run-of-river hydro) withadditional energy storage capacity and other dispatchable energy sources (such ashydropower, nuclear, geothermal, biomass, and coal or natural gas with CCS).
Investments in electricity transmission lines, interconnections, and grid modernization
can Executive Summary xiii also enhance flexibility and enable greater reliance on
low-emission generation technologies. The costs of low-emission electricity generation
technologies, while still generally higher than those for fossil fuel-fired power plants,
have been falling rapidly. Given the relatively low electricity prices in Canada in mostjurisdictions, the increased cost of electricity from low-emission energy sources is not
likely to pose a major burden for most consumers and businesses.

Finding 3: A transition to a low-emission energy system is achievable with theright combination of stringent and flexible policies.
There is no one right policy for reducing energy-related emissions. However, experience
to date has shown that voluntary measures alone are insufficient, and policies that
focus exclusively on further technological progress offer no guarantee of emission
reductions. Stringent, compulsory, economy-wide emission reduction policies are
therefore essential if Canada is to successfully undertake an energy system transition.
Carbon taxes, cap-and-trade systems, and other regulations are all possible approaches.
Regardless of the instrument, certain design features can improve performance of suchpolicies across a range of criteria. These include linking policies to binding andincreasingly stringent emission limitations, or to binding and increasingly high carbon
prices; including appropriate monitoring and penalty provisions; providing extensive
compliance flexibility; treating new and existing firms fairly; harmonizing policies
across Canada and establishing international linkages; compensating groups that areadversely impacted by policies (at least on a transitional basis); and involving the public
in decision-making. In addition to compulsory policy, enabling policies are very
important for supporting emission reductions. These include direct government
investment, adjustment of subsidies, enabling infrastructure, innovation support, and−42−

making regulatory processes more efficient. Support for energy innovation canaccelerate the adoption of low-emission technologies by making them more affordable.
With flexible economy-wide policies in place, individuals, businesses, and otherdecision-makers can choose the technology and energy responses that are right for theircontext and adjust these choices over time to adapt to further scientific progress,
technological developments, and emission reduction trends. xiv Technology and Policy
Options for a Low-Emission Energy System in Canada.

MOVING FORWARD
Addressing climate change will ultimately require globally coordinated action to protect
a common resource — the Earth’s atmosphere — and society must be willing to pay now
for benefits that accrue largely to future generations. However, climate change as atechnological and policy problem may not be as complex as is often assumed. Both theconsequences of climate change and its potential solutions have been extensively
studied and are now well understood. While energy system transitions typically require
many decades due to the longlived nature of infrastructure and massive investments
required, they can be accelerated with strategic policy support, and they are alreadyunder way in many jurisdictions across Canada. Due to the risk of getting locked in to
new emission intensive capital and infrastructure, delaying mitigation increases thecost of meeting emission reduction goals over time. Ensuring that transitions are fullyrealized will require policies that are adaptive to changing economic, technological, andenvironmental conditions and persistent over time. With appropriately stringent andflexible policies in place, large emission reductions from Canada’s energy system areachievable over the course of several decades. This transition will not be without cost for
consumers, businesses, or the economy as a whole. It can, however, be achieved without
jeopardizing Canada’s long-term economic growth and competitiveness.

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