Is Canada Spending Enough on Clean Energy? John Stackhouse from RBC Disruptors
This week, John Stackhouse, Senior Vice President, Office of the CEO at RBC joins the podcast. John is also the host of the Disruptors podcast. This episode is a joint podcast that is being made available on both the ARC Energy Ideas and Disruptors podcast channels.
John, Jackie, and Peter discuss sustainable finance and Canada’s dearth of capital spending on energy transition and decarbonization.
Questions covered during the podcast: Is the lack of a national taxonomy that defines what projects count as clean, green, and sustainable slowing investment? Should decarbonization projects, including reducing emissions from oil and gas, be included in the definition of sustainable finance? What are the barriers to increasing private spending on Canadian clean energy projects? Considering the situation, is Canada’s 2030 emissions reduction goal achievable? To what extent are upcoming elections in the United States, Canada, and Europe slowing down clean energy investing?
Content referenced in this podcast:
- RBC’s “Sustainable Finance Framework” a document that outlines the bank’s approach and methodology for sustainable finance
- RBC’s “Climate Action 2024” an annual report on Canada’s net zero journey
- RBC’s Disruptors podcast hosted by John Stackhouse, also on podcast apps like Apple Podcasts and Spotify
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Episode 232 transcript.
Disclosure:
The information and opinions presented in this ARC Energy Ideas podcast are provided for informational purposes only and are subject to the disclaimer link in the show notes.
Announcer:
This is the ARC Energy Ideas podcast with Peter Tertzakian and Jackie Forrest. Exploring trends that influence the energy business.
Jackie Forrest:
Welcome to the ARC Energy Ideas podcast. I’m Jackie Forrest.
Peter Tertzakian:
And I’m Peter Tertzakian. Welcome back. Well, unless you’ve been asleep, you would’ve noticed that the markets, the stock markets have just been rocketing largely as a consequence, not surprisingly, of artificial intelligence and the big seven companies, NVIDIA, Apple, Microsoft, etc. And so, that’s not universal. Right?
Technology companies related to clean energy are not following suit, and we’ve talked about that in a previous podcast. Right, Jackie? So, today we’re going to talk about climate finance, and I think no better person to do that with than someone we had on our show three years ago, and a lot has happened since then. So, we’re delighted to have with us John Stackhouse, who’s Senior Vice-President in the Office of the CEO at RBC from Toronto, and he’s also the host of his own podcast called Disruptors, which we highly recommend. And so, actually this is going to be a treat because it’s going to be a joint podcast with both John releasing this on his podcast and ours as well, so… and this is a first, isn’t it? So, well, welcome, John.
John Stackhouse:
Hey. Great to be with you both in this new version of the multiverse.
Jackie Forrest:
Yeah.
Peter Tertzakian:
Yeah.
Jackie Forrest:
So, now, maybe it’s worth telling our audience, your Disruptors podcast. What do you cover and why should people tune into it?
John Stackhouse:
I should say, by welcoming you both to Disruptors, since we’re doing this as a joint podcast, but Disruptors is about disruption. You may get that from the name. It seeks to explore how technology is disrupting everything around us. So, we look at everything from artificial intelligence to smart homes, to a lot of clean tech, and how technology is positively in our view, disrupting energy systems. And I imagine we’ll talk a bit about some of those ideas here.
And thank you for asking that question and allow me to flip it back to you. Tell us a bit about the Arc Energy Ideas podcast. And what makes it so special?
Jackie Forrest:
Well, we’ve been at it for over four years. I’d say we’re one of the top, but because I can’t get all the stats of energy podcasts in Canada. We cover a lot of issues across the country when it comes to energy, energy transition and the broad set of energies all the way from hydrocarbons to the newest forms. And so, yeah, if you want to know about energy in Canada and beyond, we’re the one to listen to.
Peter Tertzakian:
Yeah.
John Stackhouse:
It’s one of my favorites. And I can say quite honestly, wherever I go in the country, people who are curious about energy and about climate tend to listen to your podcast and it is accessible no matter what your degree of expertise is.
Jackie Forrest:
Well, thanks for that, John.
Peter Tertzakian:
Yeah. Thanks.
Jackie Forrest:
Okay. Well, let’s get into the podcast. We are going to have a couple of topic areas today. RBC recently released a sustainable finance framework with your approach to what is a green investment. We want to talk about that. We also want to talk about a report that you released last month, which I also heard across the country people talking about, which was Climate Action 2024, an annual report on Canada’s net-zero journey. I’m not going to do too much of a spoiler here, but it does say that we’re not spending enough on clean energy, and I think a lot of people probably realize that. So, we’re going to talk about your findings in that report.
Before we get to that, we might want to just talk a little bit about RBC’s Climate Institute. When we had you on in April of 2021, that didn’t exist. So, can you tell us why did RBC start the institute? I was looking on your website. It says it was to inform, engage, and act on all aspects of the climate challenge. So, why would a bank want to take on this public service?
John Stackhouse:
Well, as Canada’s biggest and we think leading bank on a range of issues, we’re deeply committed to the transition to net zero. We’ve made a number of public commitments on that front and continue to work with a wide range of clients across a number of sectors in the Canadian economy, as well as globally on their transitions. In addition to that, we felt it is important, maybe critical, to be part of the public conversation on how we get there. If Canada doesn’t get to net zero, it’s going to be pretty hard for RBC and our clients to get there. It’s probably stating the obvious. But accepting that, we felt we can use our databases, our access to information, what we’re learning from clients, and share that with the public and with policymakers, we have some ability to convene. We can bring together people from different sectors as well as policymakers and community leaders and citizens in different parts of the country to talk about a lot of the challenging choices as well as opportunities that I hope we get into in this discussion.
Peter Tertzakian:
Yeah. Well, it’s actually not unusual for a financial institution to bolt on an institute where it’s tasked with thinking about the big picture issues and the macro. I mean, even Jackie, the Arc Energy Research Institute in this podcast is bolted onto Arc Financial, and that was started like 10 years ago.
Jackie Forrest:
Well, John, that’s a good intro actually to some of the themes for the rest of the discussion. So, you’re providing not only a public service, but a service to the clients of the bank in terms of thinking about how to get to net zero themselves.
But let’s come to your new sustainable finance framework. Now, RBC has committed to facilitating 500 billion of sustainable finance by 2025. That’s not very far away. And your framework, which you recently updated, and we will put a link to in the show notes, helps define what types of investments are going to count as being green as you go towards that goal. So, maybe, first of all, tell us how are you in terms of getting towards that goal, and also why do you think you need to put out this definition of green? Don’t people know what that is?
John Stackhouse:
We’re on course to hit the $500 billion target, and we imagine that increasing through the back half of the decade. It’s a global commitment, and we do a lot of business in the United States, in Northern Europe, and there’s great demand for sustainable finance in those markets as well as Canada.
It’s really encouraging to see how many clients in very different sectors are now thinking about sustainable finance as they think about their own strategies, and are coming to us, as well as to our competitors, to see how we can mobilize and generate capital for sustainable investments.
Defining sustainable and related terms like “green” and “decarbonization” is a really important challenge that the sector, but our clients and the general public by extension are up against. We want to be sure that there’s transparency as well as consistency, so that when we say, “Hey. This is a green bond or a mutual fund that has green investments in it,” that there’s clarity and consistency on the definition of “green,” and ideally consistency with the rest of the market. And we can get into the challenges there of coordinating different financial institutions.
Peter Tertzakian:
Yeah. I want to probe this a little bit more, this definition of sustainable finance, sustainable company, I mean, and the 500 billion and what goes into that? I mean, an accounting firm that says RBC lends to is clearly not emitting very much versus say, a steel plant or some other industrial plant. So, what fraction of this 500 billion is including, what I call service sector component versus industrial?
John Stackhouse:
There has to be a clear sustainability outcome. Now, sustainability in the context of this commitment is more than environmental or climate. So, we finance, for instance, a lot of social housing, and a lot of social housing in the United States where municipalities and subnational jurisdictions can access through the bond market and other channels, their own finance. So, good example there of where that’s sustainable finance. And it may or may not be climate-oriented finance depending on how the buildings are operated.
Jackie Forrest:
Now, I want to ask you quickly about this taxonomy. Taxonomy is a new word, but sometimes that’s the word that’s used.
Peter Tertzakian:
Is that a zoological term, like kingdom, phylum, genus?
Jackie Forrest:
Yeah. Maybe that’s where it came from.
Peter Tertzakian:
That is where it came from.
Jackie Forrest:
But it’s being used to define what is truly “green.” And in places like Europe, they’ve come up with a taxonomy that everybody uses. So, banks like yours don’t need to put out their own document. The European government has a definition of green. Here in Canada that’s been under development for many years. In fact, we’ve had a few podcasts about it and it never gets done. It’s always been very slow. We still don’t have one. And a lot of people argue, “Well, we can’t just take the European one because it’s very narrow in its definition,” and Canada, we need to include decarbonizing of high carbon industries like oil and gas. They are like 28% of all our emissions. So, that has to be part of the definition. So, question for you, John. Do we need this in Canada? Would it make it easier for you than having every bank having to put out their own definition?
John Stackhouse:
Yes, it would be easier and better if we had a national and collective approach. We’ve just put out, as you’ve noted, RBC, our own definition and approach to decarbonization. Some of our competitors have taken similar steps. It would be better if there was something for the whole market. So, you had consistency that you could buy a green bond, let’s say from a number of banks and know that green means green or if we’re working with a pension fund to help drive some of its capital into green investments. We’ve got a shared definition of what that is. Canada is somewhat unique economy, and our taxonomy is going to and should be different certainly from let’s say a European taxonomy. It should reflect the realities of our large diverse resource-based economy. A number of us have worked for a few years on that through the Sustainable Finance Action Council and have a taxonomy roadmap. It’s not a taxonomy per se, but it’s certainly a very detailed roadmap to what would be a final taxonomy that’s sitting with the federal government. And we’re still hopeful it will go through. It’s a very strong and thoughtful document, and there’s elements of it that will continue to be reflected on. And they’re not deal breakers in our view. And we think in a reasonable period of time we will have that Canadian taxonomy and each firm may have its own approach within that taxonomy. That’s not uncommon in any standard setting approach, but better to have that whole Canadian approach than a whole bunch of different approaches.
Peter Tertzakian:
To clarify, and for our audience who’s not familiar with how a zoological term applies to energy, much as there’s distinction, and I don’t remember my high school biology, like the birds and primates. It’s pretty obvious, which is which. In the energy world, coal is clearly not green and solar farms are clearly green. And the issue with the taxonomy is the classification of things in between, such as is a natural gas fired power plant with carbon capture green, yes, or no? Or a steel plant with apparatus that reduces emissions. And therefore, the ultimate goal is that a banker such as yourself sitting around a boardroom table can go, okay, tick, this is green, or this is not green. And if it is green, then the company that is looking for financing, say a loan, can then be eligible for a green bond or not. Is that the basic premise of what we’re talking about here?
John Stackhouse:
Yeah, that’s very well described. If you’re building a steel mill or investing in decarbonization technologies, let’s say an electric arc to run the steel mill, that’s going to qualify. I don’t want to be declarative here because there’s usually restrictions around that, but that’s probably going to be eligible for a greener transition label depending on those factors. And there’s all sorts of investors in the world who are looking for exactly that kind of opportunity. And some of them are even restricted to invest only in those opportunities, so they may say, that’s great.
Peter Tertzakian:
It’s also similar, would you say to taking the coffee metaphor, okay, this is fair trade coffee, rubber-stamped-
John Stackhouse:
Yeah.
Peter Tertzakian:
… therefore I will invest.
John Stackhouse:
It’s a labeling system. And knowing when you buy your coffee, what is a decaf, a regular, that’s helpful to know what exactly decaf is, and the world lives by that definition.
Peter Tertzakian:
I don’t buy decaf.
John Stackhouse:
But you’d like to have the right to buy it, Peter, with proper labeling.
Peter Tertzakian:
That’s right.
Jackie Forrest:
I have one question and then I think we should move on to the next topic, but Peter had a couple of examples that I think most people would think our green. What about reducing methane or CO2 emissions from an oil and gas operation? Would that be considered green under your framework or under what you think the Canadian taxonomy should be?
John Stackhouse:
Well, that’s probably going to be counted as transition or decarbonization depending on which system you’re looking at. An important part of the Canadian taxonomy is that it has a transition approach, so it’s not just green and non-green. It has transition, which is back to that point about Canada being a somewhat unique economy is fundamental to our transition to net zero that we find ways to flow hundreds of billions of dollars into transition investments for that kind of opportunity, for carbon capture, for methane reduction through not just the oil and gas sector, all sorts of heavy industries that are going to be in transition. They’re not green now, but they’re in transition to net zero.
Jackie Forrest:
And I think that’s important in that everyone can come up with their definition, but if the whole country and the federal government and everyone says that this is a proper definition, it helps more investors feel confident that they can take that to their investment committee. And it’s a valid definition. I think it is a really important initiative. I hope that we do get one sooner than later, but let’s move on to your Climate Action 2024 Report. We will put a link to this in the show notes. You released it last month. It looks at where we are in terms of how much money Canada is spending in clean energy and what we’d need to be doing in order to meet our goals, like our 2030 goal. As I already put out there, we’re not spending enough. According to your first key finding, we are spending about 22 billion annually on supply side spending, but we should be spending closer to 60 billion a year in order to achieve goals like our 2030 and 2050 goals.
Peter Tertzakian:
Before we go further, Jackie, who’s we?
Jackie Forrest:
That’s Canada as a country.
Peter Tertzakian:
It’s the economy as a whole. It’s the industrial base, it’s the whole, call it the economic machinery. Is that what we’re talking about?
Jackie Forrest:
Yeah, yeah. Well, actually it’s maybe a good question for John. What is supply side spending? And give us a bit of a context for what’s being spent, where areas we’re spending and where we’re falling short to get to the 60 billion. We as in Canada.
John Stackhouse:
I think it’s important to stress that we are making progress as a country and it’s not sufficient progress and it’s not fast enough, but we are moving in the right direction. Capital flows have gone from 15 billion to 22, 22 and a half billion by our calculations in three years. That’s a 50% increase. Most of that comes from government and government investment in our view is going to be limited in the years ahead. If we’re going to get to 60 billion, which is more than a doubling, most of that’s going to have to come from private markets. Back to that taxonomy question, how do we develop the tools to mobilize the billions and trillions which are out there looking for these investment opportunities if there’s good returns, but we can’t assume they’re just going to flow into Canada or flow into the sectors where the capital is needed on its own. We’re going to have to help manage that.
Peter Tertzakian:
What you’re trying to do is highlight where we’re at and also highlight that the money isn’t flowing enough to achieve decarbonization goals. What I want to ask you is getting back to the beginning of our conversation where you talked about profitability a couple of times and you just mentioned good returns, which is basically profitability. To what extent is the issue given the choice between artificial intelligence financing and the NVIDIA effect, I’ll call it, versus investing in a fuel cell option B? Well, I’m going to hitch my horse to the AI wagon and other things that are just going through the roof, therefore, it’s very nice to hear about the labeling and everything else, but I’ve got a better option over there.
John Stackhouse:
I’m so glad you raised that, Peter, because I think that may be one of the biggest challenges to the energy transition. And we should not underestimate what’s going on in global capital markets. I was lucky enough to spend a couple of days recently in California with a group of technology leaders and it was awesome, but really eye-opening to see what’s going on in that space and the ambition there to raise trillions of dollars. And this isn’t just Silicon Valley, Saudi Arabia, the United Arab Emirates, other countries are all over this working with great entrepreneurs like Elon Musk and Sam Altman to transform frankly how we think through AI. And that’s going to require all sorts of computing, also supercomputers, which are going to require those billions and ultimately trillions of dollars. Well, there’s a finite amount of capital in the world. And right now, those opportunities, you mentioned the big seven tech companies known as the Magnificent Seven, they’re on fire in the stock market and global capital is being sucked up by them.
And I don’t mean that negatively. It’s really exciting to see what’s going on. But those involved in the energy transition or in climate more broadly, I think need to be very thoughtful about how the competitive landscape has shifted. And right under our eyes, this is real time is shifting right now. And then I’d add to that there’s another force out there which also may be underestimated, which is not to get too geeky here, but is around banking regulation in the United States and what’s known as the Basel III endgame, which is if it goes through going to require banks to set aside more capital to protect the banking system. It’s an understandable concern, but what it may lead to is less bank capital being available for things like renewables. And we’re even this week seeing renewables, companies out there saying, this is risky. We may be shut out of capital markets. Unintended consequences, which are always interesting to watch. Here’s another perhaps unintended consequence that the climate community and the energy sector more broadly needs to be mindful of.
Jackie Forrest:
John, you’re talking about some of those global things that are potentially competing for capital. Let’s bring it back to Canada, energy transition in Canada. We need to be spending a lot more, government can’t do it all. That’s messages I got out of your report. What can we do to, in light of how scarce capital is attract more? I see some big barriers in Canada. I think our competition with US, their policies around clean energy investing are better in many areas and therefore our projects can’t compete. We are adding a lot of complexity in our policy here in Canada. A lot of uncertainty around it. The intention of it is to drive more investment, but I think it’s actually doing the opposite because of the uncertainty, the potential for legal challenges, provinces not buying into the policy. I think institutional capital is an issue too. I mean, my experience has been while many want to invest in green, organizationally they’re not really set up to have pools of capital as big as you would think in some of these areas. So, what do you see in terms of the barriers, right? In Canada to get that scarce capital and get it invested in the ground here?
John Stackhouse:
You’ve touched on a couple of them. Certainly, our ability to make things more complicated than they should be is a profound challenge to the transition and a challenge to creating these opportunities. We come up with rules upon rules and almost tilt to a European mindset versus an American mindset, and in a lot of this we’re competing more with the United States than with Europe. So how do we simplify? That includes things like a different approach to regulations, which I know the federal government is thinking through in terms of environmental regulations and approvals. But how to have one process instead of asking people to go through a provincial process and then a federal process. so simple example. How to not duplicate which happens all over the place processes in what companies are trying to set up. How not to intentionally or unintentionally restrict the amount of reward potential in any particular project which you don’t see in the United States.
If you say to an investor and it’s kind of an open market in North America, “Hey, if you’re going to do the same thing on this side of the border as in the US you may not be able to make the same kinds of returns.” Well, we’re all rational actors or at least most of us hopefully are. We’re going to go to where that opportunity is more seamless. Last point is as a country we need a few clear wins, especially in the private sector in the energy transition space. So, ensuring that those model projects if you will, are able to move at speed and get to a scale and show the world. But frankly also show the country that we can do this and then we’ll do it again and again and we just need to create that cadence of success.
Peter Tertzakian:
Yeah. Policy density and complexity is something that we’ve talked about on this podcast, and I certainly believe it’s a huge detriment to making decisions around a boardroom table. But speaking of boardroom tables your report found that 96% of CEOs surveyed are confident they can hit their 2030 targets. In some ways there’s a disconnect here, like the survey says there’s a confidence amongst these high-level decision makers yet the money’s not flowing, yet there’s all sorts of other uncertainties that are talked about including policy density, complexity, etc. So, can you break these 96% of CEOs and the seeming disconnect that I’m sensing in the report or maybe I’m wrong?
John Stackhouse:
Certainly, the CEOs I got to talk to are still confident they can hit their goals. There’s a concern that it may not be 2030 precisely, it may be 2032.
Peter Tertzakian:
It’s only five years away.
John Stackhouse:
And as we get closer yes, the deadlines people may try to push them a bit out that’s kind of natural human behavior. But they feel they’re within range of hitting it in a reasonable period of time. That’s contingent on a number of things, either staying the same or being implemented in a reasonable manner. So, if we see let’s say an emissions cap just to pick one example put in place in a way that is challenging for that sector, I think the executives and CEOs in that sector may give a different answer to that question. So, there’s a number of variables at play and it’s still a ways off six years, but we’re getting closer, and I think we’re getting very close to an important moment in time where collectively as a society we’re going to have to say can we get to 2030? And what are going to be the costs that we’re willing to absorb as a society to do that or are we going to make adjustments?
That’s going to be one of the great democratic debates I think in our country, but in other countries too over the next couple of years.
Peter Tertzakian:
Well, let’s talk about that desire to spend more or not. Your polling concluded that two thirds of Canadians want to do more to tackle climate change, but as I interpret the conclusions few want to pay for it. In fact, the report says, “Our research shows most Canadians are not willing to change their lifestyles for high impact climate action.” Can you expand on that some more?
John Stackhouse:
In one way we shouldn’t be surprised. I think that any retailer who’s been around will tell you that when you ask consumers, they’re usually not willing to pay for an additional cost, and especially in this inflationary environment. People aren’t willing to pay more for whether it’s an externality or just seen as an additional benefit to the raw value of that product. We shouldn’t be surprised. What we are seeing is that people do want climate friendly products and services, and that’s the opportunity for companies to think about whatever it is they’re making or providing. If it’s a service, to do that efficiently in a way that doesn’t drive up the price and then share the information with the market as to what the benefits are. A really good example underway is with heat pumps, which are accelerating. Not at an inflection point yet but accelerating really nicely as costs come down.
But as consumers realize the extended value of a heat pump to their overall heating costs or energy costs in their homes, so in different parts of the country and New Brunswick is an example. Sales are accelerating at a really impressive rate because the products are competitive, but there’s a broader economic benefit. This all to say people are going to do things, consumers are going to do things that is in their economic benefit, and we shouldn’t be surprised by that. We should actually look for ways to ensure that there is an economic benefit in everything we do in the transition for consumers and that’s what’s going to lead to that acceleration to scale.
Jackie Forrest:
Right. Well, making incremental improvements to show your product is better environmentally. That to me implies kind of a slower transition though, right? Because you have to do it in a way that doesn’t increase your costs so much. I wanted to switch, your report mentions the potential for political change could reduce climate ambition and change greenhouse gas policy. So that’s for sure in everyone’s minds right now with the Conservatives pulling strongly in Canada and Trump looking like a real candidate here in the United States to be the president in the next election. Do you think that’s already slowing investment on both sides of the border in your view? Like wait and see what the new regime looks like?
John Stackhouse:
And don’t leave Europe out of that calculation as well, you have European Commission elections this year. That could change some of the political dynamic there as well. It’s certainly causing a number of businesses to think about where the world or where their market may be 24 months from now. But I’m intrigued by the number who are staying the course because it’s what’s in their shareholders’ interests and we see this in the United States as well. There isn’t any apparent led up across the board, there may be in certain pockets. Sort of guessing that there may be a significant change in Washington, certainly in those sectors where there is that economic opportunity and where there is that economic opportunity and this can be in energy systems, it can also be in agriculture and housing. I don’t think you’re going to see a different government change things radically if it’s good for the economy, if it’s good for the regions of the country, particularly where they may draw support.
And I wouldn’t be surprised if that’s the case here in Canada, where a different government let’s say it’s a conservative government will change things that wouldn’t be a surprise and we all know some of the things that will be quick changes. But more fundamentally I wouldn’t be surprised if a Conservative government came out with an ambitious climate strategy that’s different from the Liberal strategy, no surprise there. But has the same goals and aligns with a number of Conservative governments at the provincial level that are all taking different courses, maybe have different ambitions or timelines. But are working towards the same goal, just have a different approach as to how to get to that goal.
Peter Tertzakian:
So, I’ve always likened to say no investment equals no transition because we have to pay for it. I think your report, I mean it’s not that black and white. You’re basically saying not enough investment equals not enough transition and so that leads to the conclusion, and I want to come back to these 2030 goals. That the ability to achieve a 40% reduction in emissions within five years seems now to be not that realistic. You’ve attended a number of UN climate meetings and attended all sorts of discussions. So, do you think it’s realistic for us or for the rest of the world, for that matter to achieve these things? And if not, I mean shouldn’t we be thinking about some kind of plan B to accelerate these things? Because my sense is… it’s more than my sense, I mean I participate around boardroom tables and attend meetings and things and it’s just like there is a paralysis out there in terms of liberating capital to get things done.
John Stackhouse:
Let me come at that from maybe a different perspective, Peter. But I want to speak to your first point about no investment, no transition, which is absolutely right.
One of my concerns for Canada is that we are not generating, we’re not attracting and generating enough business investment across the economy. It’s down over the course of a decade. There’s a number of reasons for that, the seeds of some of this has been planted years and years ago. But that’s a fundamental challenge to the country, that we are not attracting and generating enough true private sector productive capital. And if we’re not doing it for the whole economy, how are we going to do it for the climate transition?
We need to come to grips with that fundamental challenge of attracting and generating and regenerating private sector capital for productive investments in the economy. Then the climate transition is going to become much easier if you have that vibrant underlying economy. That’s point 1.
Point 2 on what you call the kind of paralysis, I wouldn’t call it paralysis. I think at Dubai we saw a real excitement around climate from a broad range of countries that are doubling down, tripling down, on renewables.
As an example, what’s going on in the Middle East, I think should be a wakeup call to Canada. The Saudis and the Emiratis are determined to dominate green hydrogen, to dominate solar, to dominate carbon capture, not just for their own region, but they see this as an export opportunity for the world. We should too. We can go toe to toe with them, maybe not at the same scale, but we’re really good at all those things.
That kind of excitement and private sector, capital-led transition, I think is, you call it a plan B, we’ll get into semantics here, maybe it’s plan A plus or asterisk, but I think that’s the next plan, if you will, has to be around some of what we saw at Dubai, which is this animated capital conversation around energy transition opportunities around the world, but they’re here in Canada. So, if we have a plan A, B, or C, whatever it is, I hope it’s animated by that capital opportunity.
Peter Tertzakian:
Well, I don’t want to sound too cynical here, but the Middle Eastern countries don’t have a taxonomy to my knowledge, and they don’t have layers and convoluted policy.
Jackie Forrest:
Well, there’s a lot of national companies too.
Peter Tertzakian:
And they’re not nationalized.
Jackie Forrest:
Yeah.
John Stackhouse:
They don’t have democratic capitalism.
Peter Tertzakian:
Exactly.
John Stackhouse:
Yeah.
Peter Tertzakian:
So, it’s not really a fair comparison because we’re a democracy and there’s pros and cons to that. I’d like to think largely pro. It’s hard to compete against authoritarian directives of capital from state-owned companies. I don’t know if that’s a fair comparison.
John Stackhouse:
The US is. We were talking about AI earlier.
Peter Tertzakian:
Well.
John Stackhouse:
I mean, the US is competing in AI.
Peter Tertzakian:
The US is. But the policies are simpler.
John Stackhouse:
And attracting, generating that kind of capital.
Peter Tertzakian:
The policies in the US are much simpler, although some would argue at the state level they’re not, that they are very convoluted with the regulation and all sorts of things that are inhibiting transition in things like electrical power and so on and so forth.
John Stackhouse:
But thank you for saying that word, simpler.
Peter Tertzakian:
Yeah, no, I agree.
John Stackhouse:
Keep it simple. Keep it simple.
Jackie Forrest:
Yeah, no, I think that’s a great takeaway.
Well, thank you so much, John, for coming to our podcast and we encourage everyone to check out Disruptors. We will put a link to that in the show notes. There’s going to be a lot of links here for everyone to read. But you’ve taught us a lot, learned why we need a taxonomy. I already kind of had a feeling that we weren’t spending enough, but I think you’ve really hit on a lot of the issues, and I will finish on that point.
For all those policymakers listening, keep it simple. It will help drive more capital investment in Canada. So, thank you for joining the podcast, John Stackhouse, Senior Vice-President, Office of the CEO at RBC and host of the Disruptor podcast.
John Stackhouse:
Peter and Jackie, thank you so much for having me on your show and for you being on my show in this novel, certainly for me, novel approach to podcasting. Among my takeaways is that as much as we want to keep this simple, it is complicated. There’re complicated issues out there, but we don’t have a lot of time to wrestle with this. And if we don’t come to grips with this faster, yeah, there’s a risk that people are going to give up on it. To your point, Peter, maybe they’ll search for plan B or whatever it is.
You’ve also reminded me of the power of many of our sectors, including the oil and gas sector, which continue to power, pardon the expression, a lot of the Canadian economy, but a lot of Canadian innovation as well. I’ve always enjoyed listening to your podcast to hear from many of the great innovators, not just in Alberta, but across Canada when it comes to energy. We’re going to need that kind of ingenuity and hope the listeners get excited by the opportunities that are out there. Challenges, yes, but with those come some really cool opportunities that not only are good economic opportunities but are going to help Canada thrive in the decades ahead.
Peter Tertzakian:
Well, thanks so much, John. It’s been great talking with you again. These are not simple issues. I mean, it’s trite to say, “Oh, we are not transitioning because of this reason or that reason.” It’s a collective of complicated reasons that I’ve always said are largely based on behavioral science and decision-making more than it is on technology and engineering.
Both have to work together if we’re going to execute on this transition. Thanks very much for joining us.
Jackie Forrest:
And thanks to our listeners. If you enjoyed this podcast, please rate us on the app that you listen to and tell someone else about us.
Announcer:
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