30.03.2016 - Natural Sciences Sector

Australia and Canada to raise investment in clean technology

Climate rally in Toronto in July 2015. © arindambanerjee / Shutterstock.com

Recent moves by the Australian and Canadian governments suggest a greater policy focus on clean technology. At the 21st Conference of the Parties to the United Nations Conference on Climate Change (COP21) in November last year, the newly elected Canadian Prime Minister Justin Trudeau pledged to develop a sustainable economy based on clean technology and green jobs.

Four months later, his government’s first budget honours this pledge: €40.5 billion are to be invested over the next ten years in green technologies and a low carbon economy, according to Le Monde(1). Of this, €1.9 billion will be used to reduce greenhouse gas emissions and improve the quality of the air, soil and water. This budget comes just weeks after the Minister of Innovation, Science and Economic Development, Navdeep Bains, announced a series of innovative projects. He commented that the time had come for Canadian firms to seize their share of the global market for clean technology(1).

This market is expanding rapidly and should generate revenue of US$ 6 400 billion by 2023, according to a World Bank forecast(1). Up until now, the bulk of research funding in Canada has gone on fossil fuels, observes the UNESCO Science Report: towards 2030, released in November last year.

At the G8 summit in 2006, former Prime Minister Stephen Harper said that Canada was aiming to become a ‘global energy superpower.’ For the next decade, research and development (R&D) conducted by the private sector were heavily concentrated in oil and gas. After the global financial crisis struck, many manufacturing companies, especially in the hard-hit automobile and consumer goods sectors, retooled, in order to serve the resource sector, ‘further contributing to an economy that is increasingly unbalanced and reliant on commodities,’ observed the UNESCO Science Report. Between 2002 and 2012, the proportion of Canadian exports from energy-related products grew from just under 13% to over 25%.

Canada managed to dodge the worst shockwaves from the US financial crisis of 2008, thanks to a robust banking industry and strong energy and natural resource sectors. The energy sector has, however, been affected by the decline in global oil prices since mid-2014.

Canada faces another challenge. Between 2010 and 2013, the country’s research intensity – the ratio of research spending to GDP – fell to its lowest ebb in a decade: 1.63% of GDP, down from 1.92% in 2009. The share of business funding of R&D has receded from 51.2% (2006) to 46.4% of the total. Consequently, the number of personnel employed in industrial R&D shrank by 23.5% between 2008 and 2012.

Oil and gas extraction constitute one of Canada’s most robust industries, along with aerospace products and parts manufacturing, information and communication technologies and pharmaceuticals. Under the Harper government, some attention was paid to clean and renewable energy but they remained a poor relation, according to the UNESCO Science Report. Although the federal government created a clean energy fund of more than CAN $600 million in in the 2009 budget, most of this went to carbon capture and storage projects (CAN $466 million). In 2012, CAN$1 488 million was spent on fossil fuel-related industrial R&D, compared to just CAN$86 million on renewable energy, according to Statistics Canada. Between 2011 and 2012, R&D spending on oil (tar) sands and heavy crude oil technologies rose by 53.6% to CAN$886 million.

In 2008, the federal government announced a green energy target: by 2020, 90% of all electricity generated in Canada was to come from non-greenhouse gas emitting sources. By 2010, 75% of electricity was being generated from nuclear energy, clean coal, wind and hydro-electricity. A year later, Canada withdrew from the Kyoto Protocol.

It is Canada’s Program of Energy Research and Development (PERD) which is responsible for advancing key clean energy technologies at federal level. Operated by Natural Resources Canada, PERD funds R&D performed by 13 federal departments and agencies, which are at liberty to collaborate with partners from industry, funding agencies, the university sector and associations. Natural Resources Canada is one of ten federal agencies and departments that were earmarked for budget cuts between 2013 and 2016.

At the provincial level, some governments have also invested in schemes to stimulate clean energy research. Quebec, for example, has a well-developed clean technology cluster and British Columbia has developed a bio-energy strategy designed to ensure that biofuel production meets 50% or more of the province’s renewable fuel requirements by 2020.

Like Canada, Australia has recently decided to invest more heavily in clean technology. On 24 March this year, Malcolm Turnbull, who succeeded fellow Conservative Tony Abbott as prime minister six months ago, announced the creation of a fund for the development of clean energy technologies over the next ten years that is to be endowed with AUS $ 1 billion. Part of the fund will be used to establish large solar farms(2).

The prime minister has also come out in support of two agencies that his predecessor had planned to abolish, the Australian Renewable Energy Agency and the Clean Energy Finance Corporation. Both agencies had been established by acts of parliament, observed the UNESCO Science Report, and the Abbott government had been unable to obtain majority support from the upper house to repeal them.

Australia devoted 2.25% of GDP to R&D in 2011, almost as much as at the height of the global financial crisis in 2008 (2.40%). Two-thirds of this amount (62%) is funded by the business sector. In 2015, the UNESCO Science Report advised that, ‘in order to realize the imperative of moving the Australian economy towards more value-added production, there is a need to align public investment in R&D with emerging opportunities for innovative products and services. The declining pre-eminence of coal as the main source of energy for driving global production opens up new scientific opportunities for alternative energies. A decade ago, Australian R&D was well-placed to be at the forefront of this frontier field. Since then, other countries have overtaken Australia but the potential for it to be a leader in this field remains.’

(1) Anne Pélouas (2016) Le Canada se rêve en géant vert. Le Monde, 27-28 March;

(2) Caroline Taix (2016) L’Australie investit dans les énergies renouvelables. Le Monde, 27-28 March.

Source: UNESCO Science Report: towards 2030. See the chapters on Canada and Southeast Asia and Oceania.

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