Federal government investment in carbon capture projects could help Canada meet its international climate commitments while also boosting the recovery from the Covid-19 pandemic, says Royal Bank of Canada (RBC) in a new report.
The paper calls on the feds to adopt a national strategy for carbon capture, utilization and storage — trapping emissions before they are released into the atmosphere and either deploying them in other processes or storing them underground.
“Making these investments now could help underpin a low-carbon transition, drawing in business investment, and complementing the government’s efforts to support jobs and economic recovery,” it said.
The government has planned emissions reductions toward the ultimate goal of net-zero emissions by 2050.
Yet, for major polluters, such as the energy sector and heavy industry (such as concrete and steel), carbon capture is technically feasible but “often seen to be cost prohibitive,” RBC noted.
Carbon capture projects “are capital intensive and high-risk during the extended construction phase,” it said, adding that this discourages private investment.
This is where government should be stepping into the breach with public funding for research, RBC suggested. Ultimately, driving down costs and developing effective technology will help the projects become more viable for private investment.
“As it lays out long-term climate plans, the federal government has an opportunity to write a new chapter in Canadian climate policy: one that acknowledges the importance of the energy sector, encourages abatement across industries, leverages investment from the private sector, and spurs innovation in sectors that contribute the most to our climate challenge,” the report said.
At the same time, government investment can help combat the long-lasting effects of the Covid-19 crisis, the report said.
“While crisis support for the economy has rightly been the government’s focus, investment in new technologies and industries can limit lasting scars from this recession,” it said.