Canada is big on talk and short on action when it comes to promoting renewable energy investment, according to researchers at IHS Markit.
The London-based analytics firm ranked the country below global peers including the United States, China, India and Brazil in a new report looking at the most attractive regions to invest in renewable energy. Canada ranked 15th on the list of 35 global markets expected to account for 90 per cent of non-hydro renewable energy construction through 2030, according to IHS.
The rankings are based on a combined score for offshore wind, onshore wind and solar photovoltaic that weighs the different technologies based on their expected levels of installations over the next decade. Researchers considered the current government's policy framework, market fundamentals, investor friendliness, infrastructure readiness, revenue risks and return expectations, ease of competing projects, and the overall opportunity size for each market.
The United States took the top spot in the first-of-its-kind ranking, owing in part to President Biden's plans for significant investment in alternative energy sources. Germany, where renewables account for the majority of energy produced, ranked second. Mainland China, which accounted for over half of the world's total non-hydro renewables additions last year, ranked third, despite tougher market access for foreign investors.
"The disconnect between ambition and action is one of the major reasons pulling down Canada's rank, despite it having strong fundamentals," Eduard Sala de Vedruna, executive director of global clean energy technology and renewables at IHS Markit, told Yahoo Finance Canada in an email.
Ottawa wants 90 per cent of Canada's electricity to come from non-emitting sources by 2030, with the goal of reaching carbon neutrality by 2050.
"This is not backed by a predictable and long-term capacity procurement roadmap," Sala de Vedruna said. "So to improve its position, [Canada] needs to work on making its support mechanisms more robust and fixing its policy track record."
Canada has long faced criticism for failing to live up to its global climate change commitments, and its carbon-intensive oil and gas industry. The latter has prompted some global asset managers to blacklist certain Canadian energy investments.
Prime Minister Justin Trudeau recently upped Canada's carbon-cutting pledge to 40 to 45 per cent below 2005 levels by 2030. The announcement last month came on the heels of a federal budget that included $17 billion in new spending and tax measures aimed at cleaning up industries and creating jobs to support a greener economy.
Sala de Vedruna suggests Canada develop an offshore wind power sector in order to diversify its sources of clean energy.
"The country already has two early-stage projects planned of which one has a contract," he said. "It's a question of taking those forward and starting to gain momentum."
Jeff Lagerquist is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jefflagerquist.