{"id":25576,"date":"2026-03-12T14:36:37","date_gmt":"2026-03-12T14:36:37","guid":{"rendered":"https:\/\/www.rbc.com\/en\/?post_type=rbc_tl&p=25576\/"},"modified":"2026-03-16T19:31:40","modified_gmt":"2026-03-16T19:31:40","slug":"the-coming-war-for-climate","status":"publish","type":"rbc_tl","link":"https:\/\/www.rbc.com\/en\/thought-leadership\/climate-action-institute\/climate-crunch\/the-coming-war-for-climate\/","title":{"rendered":"Climate Crunch: The coming war for climate"},"content":{"rendered":"\n
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\u2794 Inside Canada\u2019s strategy for the \u201cDavos of Energy\u201d<\/p>\n\n\n\n

\u2794 What Canadian leaders told us about their views on climate action<\/p>\n\n\n\n

\u2794 Canadian oil can deploy industrial carbon pricing at the cost of a Timbit per barrel, according to a study<\/p>\n<\/div>\n<\/section>\n\n\n\n

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Signals<\/h2>\n\n\n\n

Energy transition\u2014not defence\u2014will drive demand for critical minerals. <\/strong>Focus on electric vehicles and other energy transition technologies will be vital to underpin investments in Canada\u2019s critical minerals sector, , according to Energy Lead Shaz Merwat<\/strong>. The good news is that emerging processing technologies\u2014such as flash joule heating and direct lithium extraction\u2014could alter the cost curve for new Canadian refining projects. Canada\u2019s clean electricity advantage could also prove to be a differentiator as processing technology reduce energy intensity sufficiently to compete with China.\u200b\u200b\u200b\u200b\u200b\u200b\u200b\u200b\u200b\u200b\u200b\u200b\u200b\u200b\u200b\u200b Read Shaz\u2019s Mine & Refine<\/a><\/strong> report and Seven Takeaways from PDAC<\/a><\/strong>.<\/p>\n\n\n\n

How are Canadian business executives addressing climate policies? <\/strong>The Climate Action team was on a listening tour over the past few weeks to check the pulse on climate action among Canadian leaders. Here\u2019s what we heard: Canadian businesses are focusing on the doable.<\/strong> The result is not retreat, but a sharper focus on what can be built, financed, and scaled this decade. There\u2019s plenty of climate capital to scale ambitions.<\/strong> The challenge is deploying it. Read our full briefing here<\/a>.<\/p>\n\n\n\n

Creating demand is the impetus for the new Advanced Carbon Removal (ARC) Coalition in Canada. <\/strong>The coalition launched this month<\/a> and is made up of RBC, Shopify, the Government of Canada and other investors to mobilize $100 million in new support for Canadian carbon dioxide removal projects by 2030. These projects cross several sectors including energy, heavy industry and agriculture, and focus on scaling durable carbon removal technologies, including direct air capture, biochar, bioenergy with carbon capture and storage, enhanced weathering, and marine carbon dioxide removal. Canada has a competitive advantage in these carbon removal pathways given its vast resources in minerals and biomass, and access to clean electricity sources for processing.<\/p>\n<\/div>\n<\/section>\n\n\n\n

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The coming war for climate<\/h2>\n\n\n\n

The hope is that the Middle East conflict is short-lived. But it\u2019s already casting a long shadow on global economic growth and energy flows\u2014and climate goals.<\/p>\n\n\n\n

With much of the oil-and-gas rich region engulfed in the crisis, major European and Asian importers are scrambling to secure alternative fossil fuel supplies. Solar and wind may be \u201cintermittent\u201d power sources, but oil and gas are now facing challenges of their own. The question for both energy-rich and option-poor policymakers is how to make urgent short-term decisions\u2014without undermining long-term climate implications.<\/p>\n\n\n\n

Here is what\u2019s at stake\u2026<\/p>\n\n\n\n

For Canada: Big decisions, high stakes <\/h3>\n\n\n\n

Safe-harbour Superpower. <\/strong>Nervous nations have come calling, says Tim Hodgson<\/a><\/strong>, Minister of Energy and Natural Resources, looking for politically neutral Canadian oil and gas. Bonus: Canadian hydrocarbons don\u2019t pass through global flashpoints\u2014but do face domestic logistical hurdles. Can Canada ramp up as a reliable supplier without compromising its climate goals?<\/p>\n\n\n\n

Investors are already testing the waters.<\/strong> The temptation is to build new West Coast LNG terminals and oil pipelines, and even East Coast projects to power Europe. Newfoundland Labrador recently reached a deal with Equinor and BP p.l.c. to lay the ground for construction and production at the offshore $14-billion Bay du Nord project<\/a>. The oil pipeline route formerly known as Keystone XL\u2014and now called the Prairie Connector<\/a>\u2014is all being revived. These projects could trigger an economic growth spurt\u2014most certainly they would raise emissions.<\/p>\n\n\n\n

Provincial<\/strong> considerations.<\/strong> British Columbia and Quebec must now navigate the tension between their strict environmental mandates and the pressure of allowing new energy infrastructure through their territories. Alberta, on the other hand, would need to ensure it does not over-index on oil and gas investments amid uncertain global energy demand.<\/p>\n\n\n\n

For Europe: A power reset? <\/h3>\n\n\n\n

Continental drift. <\/strong>The 40% surge inEuropeanLNG prices following the strike on Iran highlighted the economic bloc\u2019s limited options. With the continent still scarred by the loss of Russian pipeline gas, the current Middle Eastern shock has fractured the EU\u2019s green consensus. Italy\u2019s recent move to suspend carbon pricing\u2014and Germany\u2019s quiet recalibration of the 20-year-old Emissions Trading System (ETS)\u2014signals a pivot toward security first over climate first.<\/p>\n\n\n\n

Power with strings attached.<\/strong> As Qatari LNG through the Strait of Hormuz dries up, Europe is facing a short-term gas crisis, with Italy, Belgium and Poland<\/a> more exposed than others. While U.S. LNG is bridging the gap, this reliance is increasingly transactional, coming with “political strings” that complicate the transatlantic alliance. Faced with a complete Russian gas embargo and a supply chain for renewables that remains dangerously concentrated in China, Europe finds itself in a strategic deadlock: return to legacy coal, pay the American premium, or accelerate a transition fuelled by China.<\/p>\n\n\n\n

For Asia: Wake-up call<\/h3>\n\n\n\n

The Electrostate Paradox: <\/strong>China\u2019s energy security is currently defined by a stark contradiction. As the destination for 38% of all oil transiting the Strait of Hormuz, Beijing has much lose from Middle Eastern volatility\u2014a vulnerability compounded by the loss of Venezuelan crude following the ouster of the Maduro regime earlier this year. While Beijing recently issued a cautious 15th Five-Year Plan\u2014lowering its carbon intensity target to 17% to prioritize industrial stability\u2014this retreat masks a deeper shift. As Jason Bordoff<\/a>, director of the Centre on Global Energy Policy at Columbia University, argues, by absorbing the short-term costs of fossil fuel disruptions today, China is effectively clearing the path to consolidate its dominance as the world\u2019s first true “Electrostate.”<\/p>\n\n\n\n

India\u2019s dilemma.<\/strong> Even before the recent destabilization in the Middle East, New Delhi signalled a significant appetite for Canadian energy, with High Commissioner Dinesh Patnaik<\/a> affirming India\u2019s readiness to absorb “whatever Canada is offering.” While India maintains deep-rooted ties with Middle East nations, the vulnerability of the Strait of Hormuz\u2014which handles nearly 15% of India\u2019s crude imports\u2014has accelerated a long-standing diversification mandate. For India, the crisis could simultaneously trigger higher coal consumption, more Western LNG exports, but also focus on powering up sola, and other renewable energies.<\/p>\n\n\n\n

The Asian pivot.<\/strong> Roughly 37% of the oil transiting the Strait is destined for South Korea, Japan, and other regional hubs\u2014a dependency that is forcing a radical strategic recalibration. Rather than waiting for Middle Eastern tensions to stabilize, South Korea<\/a> is leveraging the volatility as a catalyst. The country\u2019s president framed the crisis as \u201ca good opportunity to swiftly and extensively transition to renewable energy.\u201d<\/p>\n\n\n\n

It’s unclear whether fossil fuels or renewables will emerge as winners from the latest cataclysmic conflict. What\u2019s certain, however, is that the global race to secure energy supplies has intensified.<\/p>\n<\/div>\n<\/section>\n\n\n\n

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Inside Canada\u2019s CERA play<\/h2>\n\n\n\n

Canada is all set for the \u201cDavos of energy.\u201d The IHS CERA conference in Houston, starting March 23, will have a much larger Canadian presence than in recent years, with the Canada House pavilion and participation of Tim Hodgson, the Minister of Energy and Natural Resources, with officials from Invest in Canada (IIC), Innovation, Science, and Economic Development Canada (ISED), and Global Affairs Canada (GAC), among others.<\/p>\n\n\n\n

Canada\u2019s balancing act would be to attract American dollars but also diversify<\/em> away from U.S. capital and attract a wider investor base to safeguard its sovereignty and reduce dependence on the American market.<\/p>\n\n\n\n

\u2014Canada\u2019s four strategic themes at the event:<\/p>\n\n\n\n