Energy transitions and sustainability: Exploring the German and Canadian experiences

October 29th, 2013

This one day seminar examined the topic of energy transitions and sustainability in Germany and Canada, including the experiences, challenges, observations and ‘’lessons learned’’ to date.

Introduction

Germany is one of the few OECD countries to explicitly frame contemporary energy policy in terms of a long term ‘transition’ towards a new energy system. Germany has committed to ambitious climate targets and energy efficiency objectives, while undertaking a nuclear phase-out and a dramatic expansion of renewable energy production.

In the very different Canadian context, the provinces of Ontario and British Columbia can also be considered ‘pioneers’. Ontario’s phase out of coal generation has transformed the fundamental structure of electricity generation and has made a substantial contribution to reducing Canada’s GHG emissions.  The Green Energy and Green Economy Act enabled the introduction of the first feed-in tariffs in North America. British Columbia’s carbon tax represents another North American first, designed to be revenue-neutral with no overall increase in taxation, with four years of results to examine.

This seminar heard expert presentations on the experiences of each of these jurisdictions which  examined the nature, goals, character and challenges of energy transitions. The highlight of the seminar were  presentations by two leading German researchers on the latest developments in the energy transition underway in Germany. In the afternoon session, two Canadian researchers described the highlights and lessons learned from two policy-driven transitions underway in the Canadian provinces of Ontario and British Columbia.  In the plenary sessions following the presentations, participants discussed the particular character of different jurisdictions and their transitions and identified more general lessons about energy transitions and sustainability. At the close of the seminar, an overview was provided of the observations which arose from the discussions during the seminar. Links to PDFs of the presentations can be found at the end of this report.

Participants were from three federal government departments, energy industry associations, and faculty and graduate students from Carleton University and the University of Ottawa.

The German Embassy in Ottawa sponsored the seminar with the support of the Federal Ministry for the Environment.  The Carleton Sustainable Energy Research Centre organized and facilitated the event, held at on October 29 at Carleton University.

Introduction to Energy Transitions

The seminar began with Dr. James Meadowcroft’s overview of energy as a ‘’good’’ in our society and what is meant by the term ‘’energy transition’’. Dr. Meadowcroft noted how energy consumption is at the very heart of our modern lives and that over the coming years global energy demand is predicted to rise exponentially with fossil fuels continuing as a major energy supply source. The reality of climate change poses a problem that necessitates some sort of transition away from carbon emitting fuels. The question then becomes how does change occur and which policies can help develop foster change.

Dr. Meadowcroft explained that an energy transition does not necessarily involve reaching any definitive conclusion or end point. Further, an energy transition can mean different things to different parties and that there is not a singular strategy that can be adopted. Looking at an energy transition in this broad context can help us examine the problem dynamically, considering different scales and ranges in the search for solutions.

In closing Dr. Meadowcroft noted that Canada and Germany are very similar countries in terms of governance structures, level of development and affluence.  However, differences are apparent in terms of their resource endowments and economic history.

Germany’s Energy Transition Experiences 

Perspectives on energy transitions in Germany were offered by Dr. Michael Sterner, Professor, Applied University of Regensburg and Michael Mehling, President, EcoLogic Institute, Washington, D.C..

Dr. Sterner’s presentation developed several key themes that characterized and underscored the German model. The first theme was that Germany’s transition was not a new strategic plan but rather that it has a long history.  There are  long-standing concerns over national energy security rooted in the country’s lack of domestic energy resources. Interestingly, and in contrast to the Canadian situation, these deep historical roots have helped to build social acceptance for many of Germany’s energy policy choices. Dr. Sterner also pointed out that the these historical concerns also helped to foster Germany’s interest and commitment to technological solutions to energy problems, specifically in renewable energy and energy efficiency technologies.  In his final remarks, Dr. Sterner noted that challenges persist for Germany, but contrary to many people’s beliefs, the real problems are political and economic in nature. Technological opportunities and problems are not the primary driver of Germany’s energy transitions, but a flexible policy approach to technology can help to mitigate these challenges.

Mr. Mehling’s presentation echoed a sentiment similar to Dr. Sterner’s, stating that a key point in understanding Germany’s progress to date is looking at history and its governance structures. Germany’s energy transition was instituted nationally a long time ago, and since then, policy innovations have flowed from both down from the top was well as up from the local level based on consensus built along the way. To illustrate this point, Mr. Mehling discussed the German national feed-in-tariff program and how the original inception for this idea was rooted in a movement of local owners in a municipality looking to control their own electrical generation. From here the idea spread to state governments and then to the federal level to become the capstone policy thus far in Germany’s transition. This type of holistic policy development has helped to enshrine the social acceptance of policies, which foster the transition.  This is an important explanation  of  why there does not appear to be much dissent amongst Germans in Germany’s decision to embark upon a renewable energy future.

During his presentation Mr. Mehling discussed the “de-coupling” of economic growth from carbon emissions that Germany had been experiencing. This de-coupling is a welcome dynamic of Germany’s energy transition, which helps to dispel the idea that a large, advanced economy cannot undertake a transition without placing its economic future at risk. Furthermore, Germany’s transition has actually led to growth in a new sector of the economy (about 300,000 employed in 2009), centered around the renewable energy technologies and advanced services which are driving the transition. Growth in the sector is expected to balloon over the next decade as the pace Germany’s transition quickens and other nations advance their own transition pathways.

Energy Transition Experiences in Canada 

Following the discussion on German experiences, Alex Wood presented his perspectives on  Canada’s experience with energy transitions. Mr. Wood first noted that the discourse in Canada around energy policy has always emerged in fits and starts, owing primarily to the decentralized nature of energy resource governance in the country. This has led to the development of good regional or provincial initiatives but a lack of coordination at the national level, which has hampered efforts at a transition.

This being said, Mr. Wood noted how evidence was beginning to accumulate that British Columbia’s carbon tax was resulting in a reduction in the use of fossil fuels.  This trend follows the German path reported by Michael Mehling, which showed a de-coupling of economic growth from carbon emissions. Mr. Wood noted that larger, more structurally targeted policies would be need to adopted to push these gains further.

Mr. Wood closed his presentation with the recommendation that Canada take advantage of changing continental energy markets and begin to build a truly national market for some energy products – mainly electricity. He recommended that Canada begin to separate its domestic market interests (interprovincial energy flows) from its international interests (energy products marketed for export). Developing this idea further would help foster a national discussion and place for a domestic transition while respecting the jurisdiction of provincial governments to develop their resources for export.

In the final presentation, Dr. Mark Winfield developed the idea that in stark contrast to the German experience of slowly building its energy transition over successive decades Canada has suffered from an inconsistent approach to its transition, with political expedience often taking primacy over a stable policy environment for the energy sector. Highlighting Ontario’s recent experience with the Green Energy and Green Economy Act, it was noted how the current policy efforts aiming to increase the share of electricity generation from renewables have been hampered by opposition groups in some local jurisdictions. At the same time, rapidly changing energy markets in North America have cast a shadow of uncertainty over future demand and supply. These two factors combined with the structural changes slowly shifting Ontario’s economy to one based on services have raised question marks around the future of energy policy in the province. In order to combat this uncertainty Dr. Winfield recommended that Canada take a more flexible and adaptive approach to its transition policy, looking at a myriad of solutions rather than one large-scale solution.

Key Messages

The final presentation by Dr. James Meadowcroft was a summary of the day’s discussions and the key messages that had emerged. He noted four key points that had consistently emerged throughout the day.

First, socio-technical transformations are usually not led by incumbent actors whom have an interest in preserving the status quo. Often leaders emerge from areas lacking large endowments of fossil fuels, which may mean that Canada will not become a natural leader in this area.

However, there is potential in this area at the provincial level because the resource endowment of Canada’s regions is very diverse and transitions away from dependence on fossil fuels are possible for those regions with abundant renewable resources.  If Canada can begin to coordinate its efforts on energy amongst the regions, it could emerge as a leader in fostering the transition to sustainable energy going forward.

Second, energy markets have always been and always will be an extremely volatile. These volatilities will continue to exist and it is important that policy be adaptive and flexible.

Third was the importance of social consensus around sustainable energy as a fundamental ingredient to gaining sustained political will, supporting energy transitions. In the two examples discussed Germany has this consensus, while Canada does not. But that is not to say change is not possible, perhaps if Canada were to focus first on domestic rather than international markets a consensus may begin to emerge.

Finally, a fourth observation was on the role of transportation in an energy transition. Dr. Meadowcroft noted that while not discussed as prominently, the future of the transport sector will have huge effects on energy demand, ending with a rhetorical question of where will the innovations in the transport sector come from.

Links to the Presentations:

Share: Twitter, Facebook
Short URL: https://carleton.ca/cserc/?p=1659