On this episode of Disruptors, an RBC podcast, host John Stackhouse is joined by a special guest co-host: Lindsay Patrick, Head of Strategic Initiatives & ESG at RBC Capital Markets, where she leads the Sustainable Finance Group.
As the world marks Earth Day on April 22, John and Lindsay explore various questions on climate and call on a cross-section of Canadian experts to help answer them.
Listen in to find out what exactly is a nuclear Small Modular Reactor (SMR), and whether electric vehicles ramp up will “blow up the grid?”
To read RBC’s report on electricity, “The Price of Power: How to cut Canada’s Net Zero electricity bill,” click here.
Speaker 1 [00:00:00] Hi, it’s John here. And joining me in studio today is a special co-host, my colleague, Lindsay Patrick. Lindsay is the head of Strategic Initiatives and ESG at RBC Capital Markets, where she leads the Sustainable Finance Group. Lindsay, welcome to the show.
Speaker 2 [00:00:16] Hi, John. Thanks for having me.
Speaker 1 [00:00:18] It’s so great to have you on disruptors, Lindsay.
Speaker 2 [00:00:21] So, John, Earth Day is coming up. How will you be celebrating this year?
Speaker 1 [00:00:25] Well, Earth Day means a lot of things to a lot of people. And for me, it’s a chance to get my bike out of the garage if I haven’t already and get back into the ravine system of Toronto. It’s one of the things I love most about the city is it’s got, in my view, the world’s best ravine system. You can go for tens of kilometers without ever crossing a city street right through the downtown core out to the suburbs. So it’s a reminder of how even in a big metropolis like Toronto, Nature and the Earth is integral to our lives. But I also like to reflect on Earth days past and one in particular way back in 1990, when a remarkable Canadian, Matthew Coon, come the grand chief of the Grand Council of the Crees, led a group down the Hudson River to Manhattan in a large freighter canoe in protest of a big hydro dam in northern Quebec. That protest came and went. The world has moved on in many ways, but the message and that iconic image of them outside Manhattan stays with me. That Earth Day is about people and planet, and we always have to keep that balance in mind. Lindsay What does that mean to you?
Speaker 2 [00:01:34] I, to John, really love the concept of Earth Day is the start of spring. And spring often means spring cleaning for many people. But we can also take that spring cleaning of cleaning up the ravines and time before the grass is grown and the leaves are out to protect the earth, to clean up some of the debris that has accumulated over the course of the winter. And that’s an annual tradition I do with my four boys in the ravines close to our house. But coming back to the events of 1990, I agree with you that that was really a powerful reminder of the importance for humans to protect nature and in a peaceful way. But they can also galvanize attention across the country, here in Canada, but around the world. And really hard to believe that that was 35 years ago. And in that spirit, with Earth Day coming up, we figure that there is no better time to tackle climate questions that you may have been too shy to ask.
Speaker 1 [00:02:29] That’s right. We’re dedicating this episode of Disruptors, not just to Earth Day, but to questions that a lot of us have about climate. So we called up a bunch of experts to answer climate questions, such as Are batteries truly recyclable and what is a small modular nuclear reactor? So let’s dive in. We promise you’ll learn something new. This is Disruptors. An RBC podcast. I’m John Stackhouse.
Speaker 2 [00:03:02] And I’m Lindsay Patrick. Today on the show, we tackle the top questions on climate. You’ve always wanted to know. We’ve got a lot of ground to cover, so let’s get right into it. John, going back to Earth Day, what’s the relation to technology here?
Speaker 1 [00:03:23] It might seem unusual that we’re talking about technology on Earth Day, but they’re inextricably linked, as Rachel Dawn is going to point out. We called up Rachel, who is the director of policy and strategy at Clean Energy Canada, to ask what role does tech play on Earth Day?
Speaker 3 [00:03:40] We live at a crucial time in human history. For the first time, the majority of the technology we need to address climate change exists, and many of it is cost competitive. So what we need is not more technology alone. We live in a rapidly closing window to secure our future, and what we need is more urgency at every level. We need governments that will act on climate change. We need citizens that will hold them accountable. We need business and capital to pivot into the energy transition. And that is how we’re going to save Earth Day.
Speaker 2 [00:04:12] What an inspirational segment to kick us off. I agree with Rachel. It’s about collective action. We all have a role to play and we need to work together to achieve our common goals.
Speaker 1 [00:04:24] It’s also a great reminder that most of the transformative technologies are already out there at work. This is not about the Jetsons or some crazy sci fi world of the imagination, whether it’s hydrogen or carbon capture or batteries. It’s all out there. As Rachel said, we’ve just got to figure out a way to scale it. And I might also point out we’ve got to figure out ourselves, because technology on its own is kind of useless without humans changing the way we interact with each other and with technology, which makes me think about our next question. Electric vehicles.
Speaker 2 [00:04:58] Electric vehicles are something we hear so much about. A day doesn’t go by without news of electric vehicles in the press. But in Canada, RV adoption rate still lags behind our peers. It’s close to 9%, but we need to make more progress faster if we’re going to achieve our goal of EVs making up to 100% of new vehicles by 2035.
Speaker 1 [00:05:21] It’s true we still have a long, long way to go, and I’ve often wondered about the physical makeup of an EV. So we called up a previous disruptors guest David Patterson, the VP of Corporate and Environmental Affairs at GM Canada, and asked him, Are EVs really carbon neutral?
Speaker 4 [00:05:39] The great advantage of an EV is that it doesn’t emit carbon unlike an internal combustion engine vehicle. So you’re way ahead. The question is really, does the making of the EV itself create more carbon? The answer is it can. But if you like, General Motors are going to make the batteries from cathode active materials using zero emission electricity like we’re doing in Quebec. That’s going to make a huge difference. And then when you buy that electric vehicle, you’re quickly going to offset any additional carbon from the making of the vehicle and you’re going to be helping save the planet kilometer after kilometer.
Speaker 2 [00:06:15] John I’m a proud EV owner, and I have to say it is so much not only about the makeup of the EVs and the fact that they don’t burn carbon, but it’s all about the electrical grid and the power that you use to charge your vehicle. So what about all the electrical grid capacity for these EVs that we’re planning to drive? Do we have enough power and is it enough clean power?
Speaker 1 [00:06:39] I know this is one of the questions we probably all get into endless debates about how are we going to power all the EVs when the highways are full of them. So we reached out to our colleague Colin Goldman, a senior economist in our newly launched RBC Climate Action Institute. Collins done a lot of great research in this area, and here’s what he had to say when we asked him, Will all those EVs blow up the grid?
Speaker 4 [00:07:03] EVs are going to be a big source of future electricity demand. In Ontario alone, they could be something like 20% of all the electricity demand in the province by 2040. That’s going to be challenging, not just in terms of how much more electricity generation we’re going to need, but also in how we get that power to houses. We’re going to need significant investments in hardening the wires that bring power to people’s homes and to businesses to charge those EVs. And the real challenge is going to be how those EVs interact with system peaks. So when there is significant demand for electricity, when everyone comes home and turns on their stoves and their air conditioners in the summer, do they also plug in their EVs? But EVs can also be something that helps improve resilience in the grid. Those batteries in those cars can act as a way to sort of help meet peak demand. Doing that, we could actually see falling cost of meeting peak demand because people are buying the batteries for their cars and then selling those services to the grid.
Speaker 2 [00:07:58] I think that’s such a valid point. And from my own personal experience, I charge maybe at night while I’m asleep at off peak prices. So it’s cheaper, it’s efficient, and I’m really looking forward to at some point using that electricity that stored in my car battery to power my home on those peak periods.
Speaker 1 [00:08:16] We may even get to the day where your car is a profit center, or at least for the home, because you’re going to be selling power out of the car into the grid.
Speaker 2 [00:08:25] Related to this are the batteries that power the EVs themselves. Lithium ion batteries were initially developed and commercialized for use in laptops and consumer electronics. They’ve now become the leading battery type for use in EVs. But what is lithium? Tim Johnston, co-founder and executive chairman of Toronto based Battery Recycling Startup Lifecycle, explains.
Speaker 5 [00:08:49] Lithium is a very light metal situated perfectly on the periodic table for use within lithium ion batteries. Lithium is produced predominantly in Australia and South America in a variety of different forms. Its production is driven today largely by lithium ion batteries, but traditionally has been used in things like ceramics and industrial greases, pharmaceutical applications and a range of specialty chemical purposes.
Speaker 1 [00:09:22] Okay, that’s a great point. But aren’t all these batteries going to lead to mountains and mountains of garbage as we have to dispose of batteries the way we dispose of so many other things in society now? Well, Tim took on that question and busted the myth.
Speaker 5 [00:09:38] Lithium ion batteries are inherently not wasteful. They can be reused multiple times to store energy. And that’s one of the real benefits of the lithium ion battery system. Today, with the benefits of recycling, we can now take the materials from a lithium ion battery, turn them back into. The same constituent materials that went into the battery in the first place and reuse them effectively in an infinite cycle. This is what we call closing the loop in the recycling world.
Speaker 2 [00:10:11] Okay. We’re going to take a quick break. But coming up, more answers to the climate questions you’ve always wanted answers to. Stay with us. Welcome back, John. I know nuclear power has been making a comeback in the global conversation on energy.
Speaker 1 [00:10:34] Yeah, there are a lot of large nuclear commitments being made right around the globe, including a lot of talk about Mars, the small modular nuclear reactors. But you know what? There’s only one functioning SMR existing out there right now, and it’s floating on a barge off the coast of Saint Petersburg, Russia. But for all the talk about Mars, many may be wondering just what isn’t. R Exactly. So we called up Robin Manley, who recently retired from his role at Ontario Power Generation, or OPG as the VP of New Nuclear Development. To break it down for us.
Speaker 4 [00:11:10] A small modular nuclear reactor or SMR, is a smaller, simpler, more advanced version of nuclear power plants that we safely operate today as members do not produce greenhouse gases. They do provide non emitting electricity, energy and heat to power homes, businesses and industrial applications, which currently rely a lot on fossil fuels. The deployment of smart cars will greatly contribute to our battle against climate change.
Speaker 2 [00:11:35] One thing I think is really exciting about ExoMars is their ability to provide clean energy to more remote locations that may not have access to solar or wind or a variety of other renewable energy sources.
Speaker 1 [00:11:48] And when it comes to competitive advantages that Canada has, and we have a lot in the energy transition, nuclear has got to be near the top or at the top of any list. Here in Ontario, we have decades and decades of global leadership in nuclear technology and nuclear engineering. That’s now being applied to the SMR revolution. And it’s going to be really interesting to watch in the coming years as Ontario and Canada tries to take the lead in this new chapter of nuclear technology.
Speaker 2 [00:12:23] Switching gears a bit to supply chains, we know the pandemic put a lot of strain on global supply chains, but e-commerce in general experienced a huge surge.
Speaker 1 [00:12:33] That’s right, Lindsay. So we reached out to Mark Ang, who’s the founder and CEO of Gold Bolt, a Toronto based startup focused on electrifying and streamlining last mile delivery. Mark had this to say about the climate implications of that next day parcel delivery.
Speaker 4 [00:12:49] So with all of their factors equal, simply increasing the speed of a delivery could theoretically increase carbon emissions at the same time, which will negatively impact the environment. So retailers and brands need to work with the logistics partners to mitigate the climate implications for next day delivery while still meeting their customers demands for convenience. And with the introduction of buy today, receive it on a planned date in the future. We’re seeing that convenience actually doesn’t just mean speed. Convenience could be schedule delivery. More awareness to deliver will arrive based on logistics providers routing. Other examples to do this I think are more environmentally sound will be things like forward placement where merchants can afford place the most popular SKUs so that next day deliveries or same day deliveries have shorter distances to travel. The other option is route efficiency, where logistics partners can help to sort and consolidate routes and map deliveries in a way that minimizes emissions. And then finally, at fleet electrification, where last mile delivery with EVs can just simply reduce and eliminate many of the emissions associated with maxi deliveries in totality.
Speaker 2 [00:13:52] John, I think this is really exciting. When I think about my own carbon footprint, I’m a working mom with four busy kids. Perhaps I have an overreliance on e-commerce and a large part of my carbon footprint can be attributed to the distribution associated with that e-commerce activity. So terrific to see that we are coming with Climate Solutions not to address individual parts of the supply chain, but actually all the parts that will come right to my front door.
Speaker 1 [00:14:23] Let’s switch Lindsay from parcel delivery to air travel. And that may be a question on a lot of people’s minds as they think I had two summer travel plans. Air travel accounts for roughly 4% of human induced global warming. And some people may say, well, the solution is to scale back or even stop flying altogether. So we thought it would be good to put that question to a Quebec based carbon credit company, Planet Air, to get their take. And here’s what CEO Mark Parker told us.
Speaker 4 [00:14:52] Should you stop flying? It’s a complex question with no easy answer. But we do know that air travel is a significant contributor to carbon emissions. While stopping flying altogether may not be feasible or desirable for everyone. It makes sense to take climate change considerations into account when making travel decisions and to aim to reduce air travel whenever possible. When travel is necessary. By investing in carbon credits, you can support projects that reduce or remove carbon from the atmosphere, such as renewable energy or reforestation initiatives. This will help mitigate the impact of flights on the environment and support a more sustainable future.
Speaker 2 [00:15:34] This is such an important point, John, because when I again look at the second biggest contributor to my own carbon footprint, it is probably my air travel. So, you know, really we’re calling for two key actions. One, really think about your travel footprint and minimize it. Try to do as many meetings as you can in one trip, for example. But when you need to fly, think about ways that you can invest in the ecosystem that will have environmental benefits.
Speaker 1 [00:16:01] As well, said Lindsay. And I know you and I both lived and worked in different parts of the world, and we both love to travel with our families to continue to explore the world. And that’s a wonderful gift that we have the opportunity. But we need to be more mindful about the impact of our travel, not to stop it, as you say, but to be more thoughtful about the impact and how we can literally offset switching to a completely different field. Much of our recent research at RBC has been focused on the agriculture sector, and we thought it would be worth asking about cows in particular. We know cows are a significant source of GHG emissions and there’s all sorts of interesting technologies emerging that are starting to mitigate or abate those emissions. So we wanted to go back to a previous disruptors, guest John Van Logsdon Stein of Dairy Land Systems, to ask him, can machines and technology really capture those things that come out of cows?
Speaker 4 [00:17:01] Indirectly, yes. Directly? No. Unless you attach a balloon to the back of a cow somehow. But I would not want that job. Indirectly. We take the manure that’s generated from the cow, run it through a biomass plant, capture that gas in a large dome, and then use it for energy production purposes.
Speaker 2 [00:17:20] John, it brings us back to how we started the conversation on what is the role of technology. And never in my wildest dreams would I imagine that technology would exist to capture methane that’s released from cows that can actually then be used for energy production.
Speaker 1 [00:17:35] Well, it’s an exciting technology to watch evolve and scale. Anaerobic digesters are a significant opportunity for Canada’s livestock and dairy industries. It’s really interesting to note how the US is investing a lot in digesters through the Inflation Reduction Act, and Canada needs to match that to ensure that as long as we’re producing beef and dairy products, we’re doing it in the most sustainable way possible. It can even make us a competitive exporter to the world.
Speaker 2 [00:18:10] Last. John, I thought we should close on something a little bit more consumer oriented. We talked about it’s the start of spring, which is the start of barbecue season in Canada. And I’m sure many of us are wondering what is the climate footprint of all that propane we burn to power our barbecues over these spring and summer months? I’ve got four teenage boys at home who love to barbecue. What can you tell me here, John?
Speaker 1 [00:18:34] Well, it’s a great Canadian question, Lindsay. So we thought we’d go back to Rachel Doran, who answered our first question. Rachel’s from Clean Energy Canada and had this answer.
Speaker 3 [00:18:44] Overall, in the energy transition, we’re going to need to burn less stuff. So that means using an induction stovetop instead of your barbecue from time to time is a positive piece of the puzzle. So is switching from a gas powered car to an electric car, But how you can get at those really big and systemic changes is also thinking not just about what you drive or how you cook, but who you vote for and where you invest. This is how we get at some of the systemic changes that we need.
Speaker 1 [00:19:15] Lindsay, I want to seize on that last point about investing, because I’d like to wrap up with a question for you. As I mentioned in the introduction, you lead our sustainable finance work and oversee the $500 billion that RBC has committed to sustainable finance. What are your thoughts on Canada’s net zero transition and what are you hearing from investors as well as company executives and innovators around the world in terms of how we’re going to manage this transition?
Speaker 2 [00:19:44] The world of finance, John, is largely dependent on facts and figures. We love numbers, and what’s really exciting about the work that we are doing is we are integrating facts and figures, GHG emissions, our clients production plans, the capital that they need to invest in clean tech solutions and how that will generate incredible offsets that can be financed. So really what I see is that we are seeing a merging of the climate world and other social economic factors that can be quantified that do have value into the mainstream world of finance. There is a lot of capital we need to fund the transition to trillion dollars as you and your team have surmised for Canada about 50 times that for the rest of the world. But by integrating climate factors into financing decisions, we are taking a step to making these systems mainstream. And by doing that, we can accelerate capital to the areas which are part of the solution in a way that I don’t think we would have if we didn’t had the numbers associated with it.
Speaker 1 [00:20:54] So Earth Day, as we’ve heard through these conversations, is about technology. It’s about people. It’s about our choices and it’s about capital. All of those coming together, not just on Earth Day, but every day. Lindsay, you’ve talked about your kids in this program. I’m wondering as we wrap up, what your message is going to be to them on Earth Day 2023.
Speaker 2 [00:21:16] My message to them is, do everything you can. You have the power, have your own climate footprint. Factor into every decision you make. You have the power to make a change. Go out and do it.
Speaker 1 [00:21:29] It’s been great to have you on the podcast.
Speaker 2 [00:21:30] Lindsay Thanks for inviting me. I’m Lindsay Patrick.
Speaker 1 [00:21:34] And I’m John Stackhouse. This is Disruptors, an RBC Podcast. Talk to you soon.
Speaker 3 [00:21:43] Disruptors, an RBC Podcast is created by the RBC Thought Leadership Group and does not constitute a recommendation for any organization, product or service. For more Disruptors content, visit RBC dot com slash disruptors and leave us a five star rating. If you like our show.
Jennifer Marron produces "Disruptors, an RBC podcast". Prior to joining RBC, Jennifer spent five years as Community Manager at MaRS Discovery District and cultivated a large network of industry leaders, entrepreneurs and partners to support the Canadian startup ecosystem. Her writing has appeared in The National Post, Financial Post, Techvibes, IT Business, CWTA Magazine and Procter & Gamble’s magazine, Rouge. Follow her on Twitter @J_Marron.
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