As a result of the massive increase in development over the 20th century, global energy demands have exponentially increased creating a strain on the world’s energy resources. Interests into renewable energy sources have developed with the realization that the world’s global dependence on finite oil reserves is both unsustainable and damaging to the environment (Owen, 2004). Due in part to the harsh climate, energy intensive industries, and great distances between inhabitants, Canadians on average use the most energy per capita of the industrialized nations, where each citizen accounts for 21 tonnes of greenhouse gases (GHG) emissions per year (Islam et al, 2007). Although Canada has much more potential for renewable energy development it remains far behind most industrial nations in developing renewable technologies; this is due to an absence of supportive market structures and necessary government policies and initiatives (Islam et al, 2007). Canada’s history as renewable energy developers started as a leader in the field. As a result of the oil price shocks in the 1970’s Canada made its first major steps to developing available renewable resources; biomass, solar, wind and geothermal (Islam et al, 2007). In the early 1980’s $100 million per year was invested into renewable energy technologies and methods for market penetration. Since then Canada has made some minor growth in renewable sources where it was economically convenient, such as using biomass residues, solar heating for swimming pools, and continued development in hydro power. Canada’s greatest use of renewable energy is in hydroelectric power, representing over 61% of its total generation (Islam et al, 2007). This has largely due to the availability of hydro power, however there is still so much more potential in hydro as well as other renewable sources. In 2006 Ontario took a significant step forward in developing renewable energy by introducing the first feed-in tariff in North America (CREA, 2008). The tariff delivers better pricing for renewable power sources less than 10 MW. These kinds of systems have yielded rapid growth in renewable energy internationally, however Ontario is limited under its Intergraded Power System Plan (CREA, 2008). Canada has slowly followed the status quo when developing its renewable energy initiatives and seems to fear making bold steps forward (Owen, 2004). Despite Canada’s potential this has caused Canada to fall behind as prospective leaders in this field. In 1997 the entire European Union agreed to produce 20% more renewable power, heat and fuel energy by 2020 and since have nationally implemented action plans where Canada has yet to create a plan or set any targets. Renewable Energy Policy Network for the 21st Century has not listed Canada in any investment charts of the Global Status Reports on Renewable Energy in 2008 (CREA, 2008). Although Canada has created some development Canadian energy policy has been largely developed to support oil, gas and coal resources (Islam et al, 2007). The use of royalty, tax and provincial land-use policies have aided the growth of these non-renewable energy sources. Federal agencies have also funded research and development of technologies which allow bitumen and synthetic crude oil from the Alberta Oil Sands to be economically feasible (Islam et al, 2007). Renewable energy in Canada has not been developed to its full potential because of economic constraints. Current economic valuation methods do not consider the entire costs of fossil fuels and benefits of renewable energy. Environmental externalities represent the cost associated with a product that is not paid by the manufacturer or consumer. These costs often become the burden of society and eventually citizens and the government must pay the price. In order for Canada to catch up on its renewable energy initiatives, policy must develop to eliminate supports for fossil fuel-based technologies and incorporate...
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