Moe Kabbara has spent nearly 15 years navigating the labyrinth of politics, industrial policy and economics of Canada’s evolving energy transition. But the chief executive of the Transition Accelerator, a Calgary-headquartered think-tank tasked with charting the country's path to net-zero, says his epiphany came not at a high-level summit, but in a spreadsheet.
Watching lithium-ion battery costs fall precipitously in recent years as wind and solar power costs fell below new-build fossil gas, Kabbara said he grasped the “fundamental truth” that the world was in the midst of an industrial revolution and that the shift away from oil and gas was quickly becoming “irreversible.”
“When I started working on batteries and seeing the costs going down year over year over year, the reality of the transformation underway became undeniable,” Kabbara recalled in a far-ranging interview with Canada’s National Observer.
He watched electric vehicles go from a market curiosity — just one in 50 vehicles sold globally eight years ago — to capturing a third of automotive sales worldwide today.
“For me, it was really the idea that there is an industrial revolution happening," he said, driven not by the “moral persuasion” of decarbonizing economies, but because markets are “being presented with a better option.”
The bottom line, according to Kabbara: “If a technology is superior from a cost of performance perspective, it is eventually going to win out.”
That hard-nosed realization continues to shape how Kabbara leads the 50-person Transition Accelerator, whose name doubles as its mission.
'If a technology is superior from a cost of performance perspective, it is eventually going to win out.'
The days of framing climate change merely as a “pollution control problem” are long over, said Kabbara, who previously held a top position at Accelerate, an alliance of key players in the zero-emissions vehicle industry.
The climate crisis is a “profound system transformation problem” that can only be solved when it is aligned with national self-interest, affordability and geopolitical sovereignty, he added.
As global economies are buffeted by massive disruptions driven by new energy technologies, led by wind and solar power, Kabbara said his ambition is clear: help Canada “emerge stronger economically and geopolitically” as clean energy displaces oil and gas at home and abroad. But being based in Canada’s oil and gas heartland, Kabbara knows better than most what daunting obstacles still remain.
‘Pragmatic climate reset’
In a domestic policy landscape often paralyzed by ideological battles and countervailing political winds, Kabbara champions the “pragmatic climate reset” camp.
Asking Canadians to accept financial sacrifices amid global economic uncertainty, without a “self-sustaining path forward” was never realistic, he said.
Climate action, in his view, must now align itself with the country’s most pressing priorities, including affordability, sovereignty and economic growth.
That pragmatism is in sharp relief in Kabbara’s thoughts on carbon pricing — a policy melding abstract environmental goals with visible out-of-pocket costs for consumers that became a divisive political issue in recent years. Launched by Justin Trudeau’s Liberal government just a year before a global bout of pandemic-spurred inflation, the policy was canceled by current Prime Minister Mark Carney in his first day in office.
Many economists see the industrial carbon tax — retained in a weakened form by the federal government and agreed to by Alberta in exchange for an oil and gas pipeline to the West Coast — as the ultimate climate action policy lever, and one that Carney has called the “best approach” to funding the energy transition.
Kabbara is less convinced. “Carbon pricing is one tool in the toolkit,” he said. “To say that everything that we do hinges on that one tool that is the only game in town is a fundamental mischaracterization of how industrial transitions actually occur.”
Governments cannot “simply tax their way to virtue,” he said. Instead, Kabbara believes, they should inject large-scale capital in new infrastructure, research and development — wedded to targeted industrial policy — to drive long-term change.
Clean grid the grand prize
The battle will be won or lost on the power grid, he said. The grand prize will come with electrifying the 70 per cent of Canada's emissions that come from transport, buildings, and industry.
Doing so, however, will mean nearly doubling the capacity of the country's power grids, a goal set by the federal government in its new electricity strategy.
This is a Herculean task. Canada currently invests about 0.7 per cent of gross domestic product (GDP) in electricity. “That figure must climb to 1.2 per cent,” he said, a scale-up the country’s traditional utility model can’t support.
“That approach is acutely broken,” Kabbara said. “Expanding the grid by a factor of two or three in 25 years — after taking a century to build the current network — cannot be funded merely by increasing consumer bills.”
“Expanding an electrical system by that much in 25 years that it took a century to build cannot be financed by ‘rate basing’” — whereby a government regulator values a utility’s total net capital assets to decide what prices it can fairly charge its customers, he added.
'Ideology will come and go, but economics must win the day.'
Kabbara is acutely aware of the regulatory entanglements hampering this build-out. Canada’s current clean electricity regulations were originally modeled on a nationwide power network expanding just 50 per cent by 2050 — far short of the doubling now seen as necessary.
A bigger, 90-per-cent clean grid that can power everything from EVs to heat pumps would be a “monumental triumph” and better than holding out for an entirely emissions-free network, Kabbara said.
Building Canadian supply chains
Managing that shift requires a “muscular” industrial strategy from Ottawa, he said. With Canada embroiled in global trade uncertainty, Kabbara calls diversifying the country’s clean-energy supply chains away from the current overreliance on the US a "strategic imperative."
He highlighted recent growth in Canadian exports of electrical transformers, a market he expects to become "explosive" as electrification accelerates.
The aim, Kabbara said, is to move Canada away from being "a passive importer of clean technology” from abroad to building more here as the country moves through the “messy middle” of its energy transition.
Despite Ottawa’s current oil-and-gas-fixated energy strategy, the Transition Accelerator's modelling forecasts 70 per cent of Canadians could be paying less for energy by mid-century than they do today.
But getting there requires “confronting difficult truths” and “resisting the urge to cling to the status quo,” he said, while making massive capital investments in a cleaner economy.
Despite the scale of the challenge, Kabbara retains a stubborn optimism. This confidence rests on “techno-economics” — the study of how an industrial process performs economically — which suggests clean energy technologies are getting cheaper and more efficient than their fossil fuel forerunners.
“Ideology will come and go, but economics must win the day,” Kabbara said. For a nation at a crossroads facing a future as a fading petrostate or green energy superpower, it is a clarion call.
