‘Net-zero’ targets neither feasible nor realistic

Canada and other developed countries have committed to achieving “net-zero” carbon emissions by 2050. Yet here at the midway point between the 1997 Kyoto Protocol, the first international treaty to set binding targets for cutting greenhouse gas emissions, and the looming deadline of 2050, recent findings cast doubt on the feasibility of this ambitious transition.

According to a new study published by the Fraser Institute, despite international agreements, significant government spending and regulations, and some technological progress, the world’s dependence on fossil fuels has been steadily and significantly increasing over the past three decades. By 2023, global fossil fuel consumption was 55 per cent higher than in 1997. The share of fossil fuels in global energy consumption has only slightly decreased, dropping from nearly 86 per cent in 1997 to approximately 82 per cent in 2022.

Viewed through a historical lens, this sluggish pace of change is not surprising. The first global energy transition, from traditional biomass fuels (wood, charcoal, straw) to fossil fuels, started more than two centuries ago and unfolded gradually. Coal only surpassed global wood consumption in 1900; crude oil surpassed coal only in the mid-1960s; and natural gas has yet to surpass crude oil. Even today, this transition remains incomplete, as billions of people still rely on traditional biomass energy for cooking and heating.

The scale of the energy transition ahead is daunting. The 19th-century transition from wood to coal and hydrocarbons replaced about 1.5 billion tons of wood, equivalent to 30 exajoules. But the current transition will require at least 400 exajoules of new non-carbon energies by 2050. To put this in a Canadian perspective, generating this amount of clean energy worldwide would require the equivalent of about 22,000 projects the size of British Columbia’s Site C or Newfoundland and Labrador’s Muskrat Falls.

Advocates for today’s mandated energy transition often overlook the complexity of energy transitions and their many challenges. Critical industries such as cement, primary iron, plastics and ammonia still rely heavily on fossil fuels, with no viable alternatives readily available for large-scale adoption.

The energy transition also imposes unprecedented demands for minerals vital for renewable energy technologies, such as copper and lithium, which require substantial time to mine and develop. According to the International Energy Agency, the widespread adoption of electric vehicles by 2040 will require more than 40 times more lithium and up to 25 times more cobalt, nickel and graphite than the world was producing in 2020. Assuming such scale is even possible, there are serious questions about whether mineral and metal production can expand nearly quickly enough to meet the 2050 deadline.

Transitioning to a net-zero carbon footprint also requires a massive overhaul of existing energy infrastructure, as well as development of new systems and technologies, all of which will be very costly. High-income countries (including Canada) would need to allocate between 20 and 25 per cent of their annual incomes (broadly measured as GDP) to the transition. That would create significant economic challenges for citizens in terms of living standards.

A final problem is that achieving decarbonization by 2050 hinges on extensive and sustained global cooperation, a difficult task given the conflicting political, strategic and economic interests of different countries. In 2024 it’s not easy to imagine how the major countries can coordinate their decarbonization efforts. The European Union and the United States are already reducing emissions. But China and India are still increasing their coal combustion and have decades of emissions growth ahead of them, while Russia’s economic stability depends on exporting fossil fuels. And low-income African countries are expanding their fossil fuel consumption to build infrastructure and lift their living standards to alleviate poverty.

After two centuries of rising global carbon emissions, the goal of zero carbon by 2050 faces significant economic, political and practical obstacles. Severing modern civilization’s reliance on fossil fuels may be a desirable long-term goal but it simply cannot be accomplished either rapidly or inexpensively.

Authors:

Vaclav Smil

Distinguished Professor Emeritus, University of Manitoba

Elmira Aliakbari

Director, Natural Resource Studies, Fraser Institute

Related Topics:#ElmiraAliakbari #FraserInstitute #NetZero #VaclavSmil Energy feature

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Nissan, Honda scrap $60B merger talks amid growing tensions

Published on February 6, 2025

Todayville

MxM News

Quick Hit:

Nissan is reportedly abandoning merger talks with Honda, scrapping a $60 billion deal that would have created the world’s third-largest automaker. The collapse raises questions about Nissan’s turnaround strategy as it faces challenges from electric vehicle competitors and potential U.S. tariffs.

Key Details:

Nissan shares dropped over 4% following the news, while Honda’s stock surged more than 8%, signaling investor relief.
Honda reportedly proposed making Nissan a subsidiary, a move Nissan rejected as it was initially framed as a merger of equals.
Nissan is struggling with financial challenges and the transition to EVs, still reeling from the 2018 scandal involving former chairman Carlos Ghosn.

Diving Deeper:

Merger talks between Nissan and Honda have collapsed, according to sources, after months of negotiations to form an auto giant capable of competing with Chinese EV makers like BYD. The proposed deal, valued at over $60 billion, would have created the world’s third-largest automaker. However, differences in strategy and control ultimately derailed the discussions.

Reports indicate that Honda, Japan’s second-largest automaker, wanted Nissan to become a subsidiary rather than an equal merger partner. Nissan balked at the idea, leading to the collapse of negotiations. Honda’s market valuation of approximately $51.9 billion dwarfs Nissan’s, which may have fueled concerns about control. The failure of talks sent Nissan’s stock tumbling more than 4% in Tokyo, while Honda’s shares rose over 8%, reflecting investor confidence in Honda’s independent strategy.

Nissan, already in the midst of a turnaround plan involving 9,000 job cuts and a 20% reduction in global capacity, now faces mounting pressure to restructure on its own. Analysts warn that the failed merger raises uncertainty about Nissan’s ability to compete in an industry rapidly shifting toward EVs. “Investors may get concerned about Nissan’s future [and] turnaround,” Morningstar analyst Vincent Sun said.

Complicating matters further, Nissan faces heightened risks from U.S. tariffs under President Donald Trump’s trade policies. Potential tariffs on vehicles manufactured in Mexico could hit Nissan harder than competitors like Honda and Toyota. The stalled deal also impacts Nissan’s existing alliance with Renault, which had expressed openness to the merger. Renault holds a 36% stake in Nissan, including 18.7% through a French trust.

While both Nissan and Honda have stated they will finalize a direction by mid-February, the collapse of this deal signals deep divisions in Japan’s auto industry. With Nissan’s financial struggles and the growing dominance of Chinese EV makers, the company must now navigate an increasingly challenging market without external support.

Automotive

Trudeau must repeal the EV mandate

Published on January 25, 2025

Todayville

By Dan McTeague

Last Monday, Transport Canada released a bombshell statement, announcing that the Trudeau government’s program granting a $5,000 rebate to Canadians purchasing an Electric Vehicle (EV) had run out of money and would be discontinued, “effective immediately.” This followed a prior announcement from the government of Quebec that they would be suspending their own subsidy, which had amounted to $7,000 per EV purchased.

This is, of course, a game changer for an industry which the Trudeau government (as well as the Ford government in Ontario) has invested billions of taxpayer dollars in. That’s because, no matter the country, the EV industry is utterly dependent upon a system of carrots and sticks from the government, in the form of subsidies and mandates.

EVs have remained notably more expensive than traditional Internal Combustion Engine (ICE) vehicles, even with those government incentive programs. Without them the purchase of EVs becomes impossible for all but the wealthiest Canadians.

Which is fine. Let the rich people have their toys, if they want them. Though if they justify the expense by saying that they’re saving the planet by it, I may be tempted to deflate them a bit by pointing out that EVs are in no way appreciably better for the environment than ICE vehicles, how all the lithium, nickel, cobalt, manganese, aluminum, copper, etc, contained in just one single EV battery requires displacing about 500,000 lbs of earth. Mining these materials often takes place in poorer countries with substandard environmental regulations.

Moreover, the weight of those batteries means that EVs burn through tires more quickly than gas-and-diesel driven vehicles, and wear down roads faster as well, which among other issues leads to an increase in particulate matter in the air, what in the old days we referred to as “pollution.”

That is a potential issue, but one that is mitigated by the fact that EVs make up a small minority of cars on the road. Regular people have proved unwilling to drive them, and that will be even more true now that the consumer subsidies have disappeared.

Of course, it will be an issue if the Trudeau Liberals get their way. You see, Electric Vehicles are one of the main arenas in their ongoing battle with reality. And so even with the end of their consumer subsidies, they remain committed to their mandates requiring every new vehicle purchased in Canada to be electric by 2035, now just a decade away!

They’ve done away with the carrots, and they’re hoping to keep this plan moving with sticks alone.

This is, in a word, madness.

As I’ve said before, the Electric Vehicle mandate is a terrible policy, and one which should be repealed immediately. Canada is about the worst place to attempt this particular experiment with social engineering. It is famously cold, and EVs are famously bad in the cold, charging much slower in frigid temperatures and struggling to hold a charge. Which itself is a major issue, because our country is also enormous and spread out, meaning that most Canadians have to do a great deal of driving to get from “Point A” to “Point B.”

Canada is sorely lacking in the infrastructure which would be required to keep EVs on the road. We currently have less than 30,000 public charging stations nationwide, which is more than 400,000 short of Natural Resources Canada’s projection of what we will need to support the mandated total EV transition.

Our electrical grid is already stressed, without the addition of tens of millions of battery powered vehicles being plugged in every night over a very short time. And of course, irony of ironies, this transition is supposed to take place while our activist government is pushing us on to less reliable energy sources, like wind and solar!

Plus, as I’ve pointed out before, the economic case for EVs, such as it was, has been completely upended by the recent U.S. election. Donald Trump’s victory means that our neighbors to the south are in no immediate danger of being forced to ditch gas-and-diesel driven cars. Consequently, the pitch by the Trudeau and Ford governments that Canada was putting itself at the center of an evolving auto market has fallen flat. In reality, they’ve shackled us to a corpse.

So on behalf of my fellow Canadians I say, “Thank you,” to the government for no longer burning our tax dollars on this particular subsidy. But that isn’t even half the battle. It must be followed through with an even bigger next step.

They must repeal the EV mandate.

Dan McTeague is President of Canadians for Affordable Energy.