{"id":16706,"date":"2025-07-17T14:56:24","date_gmt":"2025-07-17T14:56:24","guid":{"rendered":"https:\/\/www.rbc.com\/en\/?post_type=rbc_tl&p=16706\/canadas-other-green-superpower"},"modified":"2025-07-29T14:22:44","modified_gmt":"2025-07-29T14:22:44","slug":"the-good-and-the-ugly-in-the-big-beautiful-bill","status":"publish","type":"rbc_tl","link":"https:\/\/www.rbc.com\/en\/thought-leadership\/climate-action-institute\/climate-crunch\/the-good-and-the-ugly-in-the-big-beautiful-bill\/","title":{"rendered":"Climate Crunch: The good and the ugly in the Big, Beautiful Bill"},"content":{"rendered":"\n
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\u2794 AI gets all the attention, but the AC is also a major power drag, too<\/p>\n\n\n\n

\u2794 Canada\u2019s ghost emissions<\/p>\n\n\n\n

\u2794 David Suzuki and Chris Wright\u2019s starkly different world views<\/p>\n<\/div>\n<\/section>\n\n\n\n

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Hot takes<\/h2>\n\n\n\n

\u2794 Ghost emissions are climate change’s untold story.<\/strong> Globally, emissions from Land Use, Land-Use Change and Forestry (LULUCF) are tracked but not included in a country’s emissions inventory. While emissions from managed lands are included, emissions from unmanaged lands are excluded as they are triggered by events beyond human control-such as wildfires. But they are formidable: Wildfire on just managed lands had emissions in 2023 that surpassed<\/strong> Canada’s total accounted emissions-by a lot<\/a>. This year’s LULUCF emissions could rack up, too. By June 2nd, total estimated wildfire emissions for Canada were second only to 2023, with approximately 56 megatonnes of carbon<\/a> (or 8% of Canada’s GHG emissions<\/a> in 2023), according to the EU CAMS Global Fire Assimilation System. That’s years of painstaking climate action wiped out in weeks. This highlights a fundamental tension in Canada\u2019s climate policy: most of the attention has been on emissions mitigation; less attention has been paid to climate adaptation. And we are all paying the price.<\/p>\n\n\n\n

\u2794 Is it time for a $100-billion Pathway + pipeline package? <\/strong>Alberta and Ottawa are making progress on a big energy package that could include a West Coast oil pipeline, the long-contemplated Pathways project to capture carbon emissions, and room for expanded oil production, writes John Stackhouse<\/a> <\/em>from Calgary. But Mark Carney\u2019s team may need to finesse its way out of the previous Liberal government\u2019s oil and gas emissions cap. That could involve a new target, or delayed timeline, or a refined approach to measuring abated emissions. The package\u2019s headline costs could also be sobering\u2014up to $100 billion.<\/p>\n\n\n\n

\u2794 The Texas tragedy underscores the frequency, and intensity, of floods. <\/strong>More than 80% of Canadians live in urban areas, and around 8 out of 10 major Canadian cities are located in proximity to flood zones, according to the federal government.<\/a> Floods are already Canada\u2019s costliest natural hazard in terms of property damage, causing $2 billion<\/a> in destruction annually, as climate change supercharges weather conditions. As part of a greater National Adaptation Strategy<\/a>, Ottawa is spending  $164.2 million to update Canada\u2019s flood mapping<\/a> program by 2028. Will it be enough?<\/p>\n\n\n\n

\u2794 David Suzuki and Chris Wright\u2019s recent comments highlight the tension between environmentalists and some energy proponents. <\/strong>Canada\u2019s veteran environmentalist told iPolitics<\/a> recently that its \u201ctoo late\u201d to reverse climate change as policymakers are focused on economic growth, not nature. Meanwhile, U.S. Energy <\/a>Secretary Christ Wright<\/a> sees the climate crisis as a byproduct of progress, not an existential threat. \u201cI am willing to take the modest negative trade-off for this legacy of human advancement,\u201d he wrote in The Economist<\/em>. Policy is often driven by political cycles, with energy proponents winning this round. However, the next political cycle is around the corner.<\/p>\n<\/div>\n<\/section>\n\n\n\n

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The Big Cool<\/h2>\n\n\n\n

Power-hungry data centres get all the attention, but the humble air conditioner is also a major strain on grids. As summers get more oppressive in Canada and around the world, the International Energy Agency expects air conditioners to be a top driver of global electricity demand, with air-conditioner ownership worldwide rising from 37% to 45% by 2030.<\/p>\n\n\n\n

Here\u2019s why cooling is emerging as a critical climate issue:<\/p>\n\n\n\n

\u2794 Cooling generated just over 1 gigatonne of carbon emissions globally in 2022 <\/a>(1.9% of total). Space cooling could also lead to leakage of refrigerants, which have a global warming potential of around 1,000 times higher than CO2.<\/p>\n\n\n\n

\u2794 2Energy demand for space cooling globally is growing at 4% annually, twice as fast as water heating. This is putting pressure on power capacity, especially as countries like Canada strain to keep their grids clean.<\/p>\n\n\n\n

\u2794 In Canada, the percentage of households with an air conditioner hit 64%<\/a> in 2021, compared to 55% in 2013. That\u2019s even more impressive given the surge in households<\/a> over the past decade.<\/p>\n\n\n\n

\u2794 Buildings account for 18% of Canada\u2019s total emissions. Of these, space heating and cooling represent more than 67%<\/a> of building energy use.<\/p>\n\n\n\n

\u2794 One in 10 Canadian households had a heat pump (which, of course, double up as air-conditioners) in 2021, from virtually zero a few years prior. Heat pumps are 4.5 times more efficient than conventional air conditioners, making them a key pillar of climate action.<\/p>\n\n\n\n

\u2794 Residential heat pump imports jumped 71% in Canada in Q1, compared to the same period last year, the Heating, Refrigeration and Air Conditioning Institute of Canada<\/a> (HRAI) data shows.<\/p>\n\n\n\n

\u2794 Federal and provincial Canadian policymakers are considering building codes that would stipulate at least one room with an air conditioner in a home.<\/p>\n\n\n\n

\u2794 Access to cooling is emerging as a human rights issues, especially after nearly 600 people died in a Vancouver heat dome event in 2021<\/a>.<\/p>\n\n\n\n

\u2794 \u201cAn important driver of activity is climate-change mitigation, driven mostly by policy, rebate programs, incentive,\u201d says Martin Luymes, Vice President, Government & Stakeholder Relations at HRAI. For instance, federal rebates led to record heat pump sales, which then dropped off when the programs ended. <\/strong>Several provinces including Ontario, B.C., and Nova Scotia<\/strong> continue to offer rebates, helping sustain interest.<\/p>\n\n\n\n

\u2794 The Canadian HVAC industry sees the possible termination of the Energy Star program<\/strong> in the U.S. as a \u201cmajor mistake,\u201d says Luymes, noting that <\/strong>the program, which promotes energy-efficient products including air conditioners, as valuable, low-cost consumer guidance tools. <\/strong>Experts<\/a> say scrapping or weakening Energy Star could harm climate progress.<\/strong><\/p>\n\n\n\n

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The good and the ugly in the One Big, Beautiful Bill Act<\/h2>\n\n\n\n

Donald Trump\u2019s signature 2025-26 budget bill is now law. The legislation changes several clean energy tax incentives that were managed under the Inflation Reduction Act (IRA), tightens domestic content requirements, imposes new qualification deadlines and sunsets other tax credits that could impact Canadian cleantech firms eyeing opportunities across the border.<\/p>\n\n\n\n

Here’s the good, the bad and the ugly of the OBBBA:<\/p>\n\n\n\n

Carbon capture:<\/strong> The bill maintains credits for carbon capture, but also provides incentives for captured CO2 for oil production, underscoring the administration\u2019s commitment to the fossil fuels industry.<\/p>\n\n\n\n

Nuclear:<\/strong> The bill maintains credits for both existing nuclear facilities and new advanced energy technologies. However, new foreign entity provisions could inject uncertainty in the sector\u2019s growth. The legislation is supported by an earlier executive order that targets a quadrupling of U.S. nuclear capacity from 100GW to 400 GW by 2050.<\/p>\n\n\n\n

EVs:<\/strong> Electric vehicle manufacturing and competitiveness will be \u201chard hit,\u201d according to the Center on Global Energy Policy<\/a>, noting that the law could reduce domestic demand for EVs, jeopardize battery investment and allow China and other foreign competitors to gain greater market share.<\/p>\n\n\n\n

Clean grid:<\/strong> Solar and wind power was particularly hard hit as historic investment and production tax credits sunset earlier than before. The law would reduce the build-out of new clean power generating capacity by 53-59% through to 2035, according to the Rhodium Group<\/a>. An executive order<\/a> following the OBBBA directs the U.S. Treasury Secretary to eliminate subsidies for \u201cunreliable green sources like wind and solar,\u201d that it believes is threatening national security. A separate executive order<\/a> directs the Treasury Secretary to end \u201cmarket-distorting subsidies for unreliable, foreign controlled energy sources.\u201d<\/p>\n\n\n\n

Critical minerals: <\/strong>Metallurgical coal is nowdeemed a \u201ccritical mineral,\u201d allowing it to qualify for a production tax credit. The law also broadly reduced 45X Production Tax Credits for critical minerals to 2033 (compared to no limits before), which would pose a challenge as most critical minerals projects require long timelines. The Center for Strategic & International<\/a> says the \u201camended tax credit disincentivizes investment in newly discovered greenfield projects with longer timelines to production in favour of brownfield legacy mines that may be closer to production but have lower grade reserves.\u201d<\/p>\n<\/div>\n<\/section>\n\n\n\n

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