Decarbonizing Canada’s Electricity Grids Key to Emissions Reductions and Economic Growth

Decarbonizing Canada’s electricity grids presents a significant opportunity to reduce emissions and drive economic growth, according to the RBC Climate Action Institute’s latest report, Climate Action 2025: A Year for Rewiring. Despite some progress, the report warns that Canada risks missing its climate targets unless efforts accelerate.

The report highlights 2025 as a pivotal year for climate action amidst global political and economic uncertainty. John Stackhouse, Senior Vice President at RBC, noted, “Political change and economic frustration have challenged how businesses and governments are thinking about climate action, but these same forces also offer opportunities to advance our collective approaches in a new global reality.”

Current Progress and Challenges

Canada’s greenhouse gas emissions fell by 0.8% in 2023, largely due to reductions in the electricity sector. However, current projections suggest that 2030 climate targets will not be met until 2035. Meanwhile, cleantech investments have significantly declined, with venture capital funding dropping from an average of $650 million to $158 million in 2024 amid global economic challenges. Public concern over climate change has also diminished, with only 14% of Canadians ranking it as a top-three concern, compared to 26% in 2019.

Encouraging Developments

Some bright spots indicate progress:

• Alberta eliminated coal-based power six years ahead of schedule, reducing national emissions by more than six megatonnes.
• Corporate engagement has increased, with government subsidies (55%), internal funding (53%), and executive leadership (50%) cited as key drivers of emissions reductions.

The RBC Climate Action Institute’s proprietary Climate Action Barometer shows that while climate action has nearly doubled since 2018, the pace of growth has slowed in recent years.

Canadian companies are spearheading initiatives to combat climate change:

• Canada Nickel is exploring methods to sequester carbon during ore mining.
• Semex is working to reduce methane emissions in dairy cattle through targeted agricultural practices.

With the 10th anniversary of the Paris Agreement approaching, the report calls for bold action and collaboration to close investment gaps, renew public interest, and ensure Canada’s climate commitments remain on track. Climate Action 2025 emphasizes the need for stakeholders to embrace new paradigms and seize opportunities in the face of emerging global challenges.