Financing the Transition to Future-Fit Hydrocarbons

How can public policy help attract greater investment into the innovation and infrastructure for “future-fit hydrocarbons”, in light of global investors’ increasing concern with climate change and growing appetite for low-emissions/transition oriented opportunities?

 

Defining the Challenge

The Issue: Alberta’s energy industry continues to face significant challenges related to sustainable investment.

The Opportunity: We have an opportunity to reframe the energy conversation at home and abroad by demonstrating how Alberta’s hydrocarbon industry can be transformed to align with and compete in a net-zero future.

Response to the Innovation Challenge: A multi-partner, collaborative known as the Energy Futures Policy Collaborative, which aims to help policy leaders build better visions, establish bridges across seemingly divided camps, and — most critically — enable the development of policy signals that can reignite investor engagement and confidence in Alberta’s hydrocarbon resources, assets, and expertise.

Unlocking the Challenge

Public policy can play a critical role in supporting the adoption of future-fit hydrocarbons. Acknowledging that public policy is central to shaping the future of Alberta’s energy sector, this Innovation Challenge aims to bring forward a framework for policy that highlights realistic opportunities, nurtures alignment, invites multi-actor participation, and moves Alberta and Canada in the right direction. 

This challenge is guided by the following question: How can public policy help attract greater investment into the innovation and infrastructure for “future-fit hydrocarbons”, in light of global investors’ increasing concern with climate change and growing appetite for low-emissions/transition oriented opportunities?

In response to this Innovation Challenge, identified by Energy Futures Lab Fellows and Partners, a two-year, multi-organization partnership was launched to help policy leaders build better visions, establish bridges across seemingly divided camps, and — most critically — enable the development of policy signals that can reignite investor engagement and confidence in Alberta’s hydrocarbon resources, assets, and expertise. The collaborative, developed by the Energy Futures Lab and the Max Bell Foundation, is referred to as The Energy Futures Policy Collaborative. 

Innovation Approach

The Energy Futures Policy Collaborative has a two year runway. Year one (2021) involved gathering information, mapping the desired change, plotting the most promising options and testing these ideas in relevant contexts. As a result, a suite of policy recommendations were developed. Year two (2022) will focus on testing, refining and advocating for these policy recommendations.

What We’ve Accomplished

Year one of this challenge is now complete. During these phases of work, the collaborative:

  • Mapped out the relevant playing field. The intention of this mapping exercise was to identify and understand – not just assume – the relevant variables underlying the problem and the range of potential solutions.
  • Redefined and specified the challenge utilizing insights from the previous stage to generate a shared vision of success and the problems and goals on which to focus policy efforts.
  • Generated a broad array of potential solutions and policy options in response to the challenge. 
  • Field tested different solutions, rejecting some and prioritizing others. 

As a result of this work, we’ve created: 

  • A policy framework for defining future-fit hydrocarbons, why they matter and the role that policy needs to play was co-created by a diverse group of individuals and organizations from inside and outside of Alberta.
  • A suite of tools stakeholders can use to deep dive into any aspect of the framework and scale out recommendations to meet a broader variety of needs (e.g. marketplace framework, policy levers canvas, FFH scenarios and indicators).
  • A portfolio of promising policy recommendations that introduce ideas and proposals that encourage people to think more broadly about their options.
  • A series of blog posts aimed at making our approach and learnings visible as the work evolves. 

Next Steps

Advancing a shift to the concept of “future-fit hydrocarbons” creates an opportunity for governments and investors to reconcile polarizing narratives and policy approaches underpinning energy transition and to take constructive action together. We are continuing to advance this work within the Energy Futures Lab Impact Studio as part of the Socializing Future-fit Hydrocarbons initiative. 

As opportunities related to the Energy Futures Policy Collaborative emerge, the Energy Futures Lab will support outreach and engagement efforts connected to the project’s policy recommendations.

Challenge Partners

The Energy Futures Lab is a collaborative network of partners and innovators working together to accelerate the transition to an energy system that is fit for the future. Our work is powered by The Natural Step Canada. 

The Energy Futures Policy Collaborative consists of organizational partners whose missions are well aligned with this policy focus and who are committed to the project’s goals and success.

Connect

For questions or inquiries please contact:

Keren Perla
Director, Energy Futures Policy Collaborative
kperla@naturalstep.ca