Decarbonization is the logical choice

Studying and teaching sustainability in a fossil fuel driven economy like Alberta is interesting. The ability of many to afford things like higher education and organic fruits and vegetables relies on income from the ecologically devastating tar sands. But a number of reports from places like the Pembina Institute over the years have advocated for diversifying our economy.

Diversification always seemed logical to me. When I was a sessional instructor dependent on semester based contracts to pay my bills, I diversified the courses I taught. Invertebrate biology? No problem. Physics? Why not? My ability to diversify meant that I kept working. Why this wouldn’t apply to something like a provincial or state economy is beyond me.

New research on the global energy transformation, from fossil fuels to low carbon, renewable sources indicates that for many markets, diversification is indeed the way forward. Mercure, Salas, Vercoulen and others (2021) show that the energy transformation is no longer an issue of the future. It is happening now and that has different implications for national (and local) economies depending on whether they are high importers, high exporters, or low exporters of fossil fuels.

Not surprisingly after all the supply chain disruptions caused by the covid-19 pandemic, countries that rely heavily on fossil fuel imports like China are motivated to decarbonize. This reduces their dependence on imported energy. This makes sense, nobody wants the lights to go out because a ship couldn’t dock. And nobody really wants to risk spreading a potentially deadly disease because you needed gas to drive into work.

For high fossil fuel exporters like Saudi Arabia can survive the subsequent reduced demand by flooding markets with low cost product. They slow the transition by making fossil fuels more economically viable. This won’t stop the transition from happening but it will increase the time they have before they feel the economic impacts.

But these two responses leave low level exporters like Canada, who rely on high cost extraction methods from sources like the Alberta tar sands in a precarious position. This product has to enter the market at the low prices set by high export nations. And the tar sands are already out of favour because of the aforementioned ecological destruction. Therefore, Mercure et al argue these economies will suffer significant decline.

The option then, is to diversify. Use the positive income from fossil fuels now to fund innovation and diversification of both economies and local energy systems. This gives time for building infrastructure and industries. But it also gives time for job retraining. We need to capture the skills of fossil fuel staff now and plan for where those skills can be applied tomorrow. This allows for a continued ability to pay for those items like education and organic fruits and vegetables.