With Canada’s climate said to be warming twice the rate of the global average, according to the Government of Canada, cleantech has emerged as a crucial industry now more than ever.
The report from the Canada’s federal government released in April detailed how the country’s climate has rapidly changed and how extreme weather events, including the likes of forest fires, would intensify in the future.
In the first quarter of 2019, cleantech received significant attention both in Canada and elsewhere in the world.
Analysts say look beyond cobalt and lithium
There are many great opportunities to profit in the cleantech space
In Canada, the Conservative government in Ontario has taken it to the courts on fighting the carbon tax that is imposed on the provinces who don’t have their own systems in place.
The differences among political parties on ways to combat climate change has been felt across the world—not just in Canada. Specifically in the US, the introduction of the Green New Deal by Democratic Rep. Alexandria Ocasio-Cortez (AOC) received polarizing opinions across the political spectrum.
On that note, here the Investing News Network (INN) takes a look back on the first quarter of 2019 to see the different trends of the cleantech sector and things that will shape the industry in the months ahead.
Cleantech market update: Polarized views across the political landscape
In his opening day remarks at the 2019 CanWEA Spring forum in April, Robert Hornung, president of the Canadian Wind Energy Association (CanWEA), summarized the overall state of the renewable industry.
“Wind energy is fast becoming a non-partisan issue,” he said. “Across Canada, political parties have a variety of views on renewable energy.”
Hornung compared how certain parties have outdated views on renewable energy, exampling how the industry is expensive compared to other forms of electricity generation. He also highlighted how other parties have adopted the view that renewable energy is cost competitive.
“We can’t deny that it is still true that the wind energy industry is, at times, the political football being punted between these two views,” he said.
In the first three months of 2019, the diverse opinions on cleantech from political parties and ways to tackle climate change intensified with parties making several announcements.
The federal government’s budget delivered in March had a significant focus on cleantech as it seeks to ramp up efforts to meet its 2030 targets. From giving out incentives to consumers for buying electric or hydrogen vehicles, to building a wind energy project in Inuvik, the federal government touched on multiple areas with its budget.
Also in March, Ontario’s Conservative government upped its ante against the federal government as it seeks to put a stop to carbon tax on its citizens. Ontario Premier Doug Ford connected the carbon tax with jobs than environment. Ford said that the carbon tax would chase jobs out of the province including the manufacturing jobs, small business jobs and trucking jobs.
Analysts say look beyond cobalt and lithium
There are many great opportunities to profit in the cleantech space
In his statement, Ontario’s Minister of the Environment, Conservation and Parks, Rod Phillips stressed on his province’s own plan to fight climate change. The Ontario government’s Made-in Ontario Environment Plan promises to lower greenhouse gas (GHG) emissions in line with the federal government’s target, but without a direct carbon tax.
Crucially, that province has taken the issue of federal carbon pricing to the Ontario Court of Appeal, which was heard by a five judge panel. The four day hearing began on April 15 and ended on April 18. The judges reserved judgement, with a decision likely be made within the next six months.
Hornung said that the debate that is currently happening between the political parties on how to fix the climate change rather than whether climate change is real or not is a welcome step.
He added that the topic of climate change would not be taken away from the spotlight, highlighting a report from the US Government Accountability Office (GAO). The report from GAO stated that climate change has accounted for US$350 billion in taxpayers money in the last decade. Further, Hornung highlighted a report from the Insurance Bureau of Canada, which said the agency paid out almost $2 billion in insured damage in climate change-related events in 2018.
“There is no political consensus on how Canada should navigate a shift to a cleaner economy,” he said. “As it stands, Canada is not on track to meet its climate change commitments and that weighs heavily in political narratives about how Canada should produce and use energy.”
Cleantech market update: US trending towards more clean energy
In March, New Mexico became the third state in the US to pass a bill that would become entirely carbon-free by 2045. The state joins California and Hawaii along with Washington, DC, to go carbon-free, while several other states are expected to follow suit.
As a result of these efforts, Clean Edge, a firm that focuses on stock indexes and benchmark reports on clean energy, said that four of its major indexes were up in the first quarter.
The firm said that its NASDAQ Clean Edge Green Energy Index (NASDAQ:CELS) was up 14 percent while its NASDAQ OMX Clean Edge Smart Grid Infrastructure (NASDAQ:QGRD) was up over 12 percent.
In the report published in April, Clean Edge said that AOC’s Green New Deal has put a focus on climate change.
“While it’s too early to know how this will all play out, one thing’s for certain, the Green New Deal has brought climate change and potential solutions to the fore,” the firm said.
Analysts say look beyond cobalt and lithium
There are many great opportunities to profit in the cleantech space
Meanwhile, the Energy Information Administration (EIA) said in a report published in April that renewable energy would account for 18 percent of electricity generation in 2019. Further, EIA expects that renewables would account for 20 percent share in 2020.
As the electricity generating from renewables is on the rise, EIA predicts that the energy related carbon dioxide emissions would decline by 1.6 percent in 2019 and further one percent in 2020.
Cleantech market update: Political uncertainty could continue in Canada
In the second week of April, Alberta voted Jason Kenney and the United Conservative Party to lead the province.
In his victory speech, Kenney said that his party is serious about the challenges of climate change.
“We are world leaders in innovating to reduce emissions and shrink the environmental footprint of Canadian energy,” he said. “But as long as there is a growing global demand for oil and gas, the question is who will provide it.”
Kenney said that the world needs more Canadian energy and that it was a moral cause to share the country’s resources with the rest of the world.
Under the previous NDP’s government, Alberta was in the spotlight thanks to its wind energy being the lowest price in Canada. The province is home to 12 percent of total wind capacity in Canada with 1,483 MW of capacity.
While it remains to be seen whether Kenney would follow Rachel Notley’s government in procuring more wind energy, CanWEA is looking to extend the presence of wind energy in the region.
“Alberta has all the makings of a true energy powerhouse, and not just where oil and gas are concerned,” Evan Wilson, regional director of CanWEA, said in the release. “The wind industry is keen to work with the UCP government to help Alberta turn that investment into low-cost, clean and flexible power that creates jobs and provides significant benefits for rural and Indigenous communities across the province.”
Cleantech market update: Investor takeaway
While it remains to be seen what Alberta does with renewable energy and what the judgement will be on the case between Ontario and the federal government, the focus on climate change and cleantech are here to stay.
Despite the differences in views of tackling climate change, political parties across the spectrum have a plan in place for meeting climate change targets. Thus, consumers and investors certainly have plenty to look forward in the coming months.
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Securities Disclosure: I, Bala Yogesh, hold no direct investment interest in any company mentioned in this article.
Analysts say look beyond cobalt and lithium
There are many great opportunities to profit in the cleantech space
