Why Canadian cleantech is happy with Trump’s Paris mistake: Comment
Jane Kearns from MaRS Discovery District about how Canadian cleantech continues to excel during the Trump era.
After hearing the outcry over Donald Trump’s withdrawal from the Paris climate agreement, you’d be forgiven for thinking the game’s up for the clean economy. Is it time to rip out your solar panels and invest in big oil because we’re going back to drill, baby, drill?
Trump’s decision is deeply misguided and the exact opposite of what is needed to create a sustainable global economy. But it is no cause for Canada’s clean technology companies to hit the panic button — in fact, it might be just the opportunity they need.
There’s been a whiff of the apocalypse to some of the media coverage of Trump’s decision – even the Weather Channel ran a story headlined “So, what happens to Earth now?” But most of the Canadian cleantech entrepreneurs I’ve spoken with are decidedly relaxed about it. That’s not to say they support the decision; most believe it’s an historic mistake. They simply don’t see the markets for their products shrinking substantially as a result.
Take Rob Niven, CEO of CarbonCure, a Nova Scotia-based company whose technology allows carbon dioxide to be sequestered in construction concrete. CarbonCure’s main market is the U.S. and it has more than doubled its customer count over the past year. Niven expects that trend to continue.
“This year, almost half of the commercial construction market is green and this isn’t changing any time soon,” he said.
Rob Niven of CarbonCure, whose main market is the U.S.; it has more than doubled its customer count over the past year.
Trish Nixon, a director at CoPower, an investment firm that sells green bonds to finance clean energy projects in the U.S. and Canada, doesn’t expect Trump’s decision to negatively impact demand. In fact, she’s noticing the opposite, with investors becoming more enthusiastic for green bonds since Trump came to power.
Such confidence has built up because in the past five or six years, clean technologies have shaken off their image as passion projects for do-gooders. These technologies deliver real functional and economic advantages. The carbon dioxide captured by CarbonCure’s technology increases the strength of concrete, so customers can reduce the amount of cement they use. We already know that devices like intelligent lighting and smart thermostats cut energy bills.
Pulling out of the Paris agreement won’t change that financial calculus. That’s why more than 900 companies, state governors and city mayors have found it so easy to pledge continued climate action.
Where Trump’s policies will be felt is in the U.S. economy. The White House wants to close the Advanced Research Projects Agency for Energy (ARPA-E), one of its key funding organizations for clean technology research. Without ARPA-E funding, American companies will find it harder to do the expensive and demanding work needed to commercialize new technologies. Trump’s cuts will mean less innovation coming out of the U.S., and the consequences could be long-lasting, especially if they result in a brain drain.
So, what does this mean for our cleantech industry? First, demand from the U.S. is not going to collapse, but the market is likely to grow more slowly. Second, over the medium term there will be diminished competition from American firms. And, finally, Canadian startups will likely find it easier to recruit highly skilled workers from the U.S., who are already applying for jobs here in record numbers.
The implications are clear: Canadian cleantech entrepreneurs need to win share in international markets to take advantage of reduced competition from the U.S. Our firms have an understandable tendency to focus on North America, but the European Union, Latin America, China and India are all huge potential markets. And clean technologies are particularly suited to export. Greg Nuttall, CEO of Woodland Biofuels, which makes clean, renewable vehicle fuels, puts it neatly: “The opportunity for us is anywhere there’s waste and where people drive cars.”
Canada’s cleantech industry already employs 55,000 people and Ottawa is pumping $2 billion into the sector to spur innovation. That funding, which was revealed in the April budget, now looks particularly well timed.
However, in the past, too much public money has ended up in the hands of large companies like Bombardier and Suncor, which are the ones most able to fund innovation themselves. It’s vital that this time the money goes to support the next generation of companies that will drive growth in the Canadian economy. These companies need access to working capital at non-punitive rates as well as early stage equity. They also need support in the form of flexible project finance to enable deployment of projects that are still deemed risky by our very conservative banks. Until now the U.S. has done a much better job of this than Canada has, and our companies have tended to grow more slowly as a result. Now, it looks like the situation is reversed.
Trump shot America’s economy in the foot — but he might also have fired the starting pistol on a cleantech boom in Canada.
About CarbonCure Technologies Inc.
CarbonCure’s retrofit technology chemically sequesters waste carbon dioxide during the concrete manufacturing process to make greener and stronger concrete. CarbonCure is part of a growing industry of CO2-utilization technologies that are expected to reduce global greenhouse gas emissions by 15% by 2030. CarbonCure’s technology is currently operational in a growing number of concrete plants across North America, including several of the world’s largest vertically-integrated cement and concrete companies. CarbonCure is one of 27 semi-finalists in the $20 million NRG COSIA Carbon XPRIZE challenge, which has been called the Nobel prize for climate technologies. To learn more contact us at firstname.lastname@example.org or visit www.carboncure.com.
Jane Kearns is a senior advisor on clean technologies at MaRS Discovery District in Toronto.