One more time: can Canada meet its GHG emissions targets if oil and gas continues to expand?

The Canadian government pledged to  exceed 2030 emissions reduction targets and reach net zero carbon emissions by 2050 at COP25 in December 2019, and on January 13, the Minister of Finance announced  pre-Budget consultations  that will include climate change as a “central focus”.    Encouraging as all this sounds, it contrasts with the government’s  2018 purchase of the  Trans Mountain Pipeline (recently critiqued by B.C. economist Robyn Allan, and pictured with new “pipe in the ground” in December), and its mixed signals over whether Cabinet will approve the enormous Teck Frontier oil sands project in February – explained in a Narwhal Backgrounder: “Why the proposed Frontier oilsands mine is a political hot potato”.  (Hint: because it has the potential to produce 260,000 barrels of bitumen every day until 2060).

Recent forecasts for expansion of  oil and gas industry production are also at odds with  Morneau’s “focus on climate change” :

Oil, Gas and the Climate: An Analysis of Oil and Gas Industry Plans for Expansion and Compatibility with Global Emission Limits , published by the Global Gas and Oil Network ( December 2019)  describes how “new oil and gas development in Canada between now and 2050 could unlock an additional 25 GtCO2 , more than doubling cumulative emissions from the sector.”  The report is summarized in a separate WCR post  here .

Canada’s Energy Future 2019: Energy Supply and Demand Projections to 2040 , released in December by Canada Energy Regulator (CER) (formerly the National Energy Board) states “Canada is making progress in transitioning to a low-carbon future” but :

“From 2018 to 2040, crude oil production grows by nearly 50%, to around seven million barrels per day.

Natural gas production increases by about 30%, to over 20 billion cubic feet per day over the next 20 years.

In 2005, wind and solar made up 0.2% of Canada’s total generation. Combined they now make up 5%, and that share grows to nearly 10% by 2040. Over the outlook period, installed capacity of wind nearly doubles, while solar more than doubles. This depends on many factors, including costs of wind and solar power continuing to fall. EF2019 assumes that the cost of wind power falls by 20% and solar by 40% from 2018 to 2040.”

canadas energy future 2019

The  Pembina Institute responded with “Why Canada’s Energy Future report leads us astray”  on January 9th, which states: “How does the government’s long-term decarbonization plan square with its projections for energy production? The simple answer is that it doesn’t. The report’s implication is that Canada will blow past our climate targets as our oil and gas sector effectively continues on a business-as-usual trajectory….The report has real implications for federal planning and decision-making and, perhaps most significantly, the overall vision of the energy sector in this country.”  Canada’s Energy Future 2019: Energy Supply and Demand Projections to 2040 is available in PDF format and in an interactive version .

Amid the distraction of the Christmas season,  the government of Canada released Canada’s GHG Emissions Projections to 2030 , as required by the United Nations Framework Convention on Climate Change (UNFCC) and as part of Canada’s 4th Biennial Report to the UNFCC.  The December 20 press release from the Minister of Environment and Climate Change claims that Canada will achieve an “historic level of emissions reductions” … projected to be 227 million tonnes (Mt) below what was projected in 2015 [italics by WCR]. ” The summary provides details of anticipated reductions by sector in 3 scenarios: 2019 Reference Case (policies currently in place); a 2019 Additional Measures Case, which considers the Reference Case and those that have been announced but not yet fully implemented as of September 2019 (for example, the Clean Fuel Standard); and a Technology Case, an “exploratory scenario that includes more optimistic assumptions about clean technology adoption in a number of sectors.” A summary of the Emissions Projections document is here ; the full details are in the 4th Biennial Report to the UNFCC, in English here   and here in French .

And for an example of how Industry is framing their emissions vs. growth dilemma:

Cenovus Energy issued a press release on January 9 announcing “Bold Sustainability Targets”  which “position us to thrive in the transition to a lower-carbon future”. The company states: ” Cenovus is targeting to reduce its per-barrel GHG emissions by 30% by the end of 2030, using a 2019 baseline, and hold its absolute emissions flat by the end of 2030″, with a “long-term ambition is to reach net zero emissions by 2050.”  This, despite a separate investor release which promises: “Total production increase of 7% compared with 2019 guidance, as Cenovus’s crude-by-rail program, coupled with the Government of Alberta’s Special Production Allowances, positions the company to move to unconstrained production levels.”

 

Just Transition Initiative among positive developments at U.N. Climate Action Summit 2019

UN summit climate action 2019The United Nations 2019 Climate Action Summit in New York at the end of September has been viewed as a disappointment by many because it failed to deliver new and dramatic commitments from the major polluting countries, as summarized by Inside Climate News in “Small Countries Step Up While Major Emitters Are Silent, and a Teen Takes World Leaders to Task” . But CBC provides a more optimistic view in its summary of the “Big Takeaways” from the meetings, including news that the Net Zero Asset Owner Alliance, composed of  pension fund managers and insurers (and including La Caisse de dépôt et placement du Québec) committed to carbon-neutral investment portfolios by 2050  . A  compilation of UN Press releases reveals many new initiatives announced at the Summit.

Climate Action Jobs Initiative to promote Just Transition

One important such initiative:  the Climate Action Jobs Initiative, aimed at the creation of decent jobs and protecting livelihoods as part of climate action. The Initiative will be led by the International Labour Organization (ILO), along with  International Trade Union Confederation and the International Organisation of Employers, and will build on the ILO Guidelines for a Just Transition, released in 2016.   According to the press release of September 18, almost 50 countries have committed to forming Just Transition Plans, with suggested specific measures including skills development and upgrading, social protections, and mechanisms for inclusive social dialogue to achieve consensus for transformative change.

“The commitments represent a significant engagement by governments, employers organizations, trade unions, UN agencies and civil society to pursue a common agenda to advance a just transition to environmentally sustainable economies and societies for all.”

Other Reports announced before and during the U.N. Climate Summit included:

UN the heat is onThe Heat is On: Taking Stock of Global Climate Emissions,   released by the UNFCC and the U.N. Development Program in advance of the Summit meetings. It analyses trends in the international progress to “ratchet” the emissions reductions goals under the Paris Agreement and emphasizes the urgency for countries to put plans in place for the 5-year review of the Paris targets in 2020… “While climate action has accelerated since Paris, it still falls far short of an unprecedented transformation needed to limit impacts of climate change. …Many developed economies are mapping out long-term plans to eliminate GHGs by 2050, even as they have yet to clarify plans for shorter-term NDC revisions.” Regarding “Long Term Strategies”: “12 countries have submitted LTS to the UNFCCC since 2016 – Canada, Germany, Mexico, the United States, Benin, France, Czech Republic, United Kingdom, Ukraine, Marshall Islands, Fiji and Japan.”

The United in Science report, which is composed of a number of reports from such agencies as the World Meterological Organization, United Nations Environment Programme (UNEP), Global Carbon Project, the Intergovernmental Panel on Climate Change (IPCC). The reports state that the world is currently on track for a more than 10 per cent rise in emissions above 2016 levels by 2030, and concluded that governments must triple their 2015 pledges to keep global warming well below 2 C by 2100, or increase them fivefold to hold it to 1.5 C . The WMO’s greatest concern is with sea level rise, which has averaged 3.2 millimetres per year since 1993 but hit 5.0 millimetres per year between 2014 and 2019. It also found that the oceans had the highest heat content on record in 2018.

Special Report on the Ocean and Cryosphere in a Changing Climate (SROCC)  : this IPCC report presenting the work of 104 scientists from 36 countries, synthesizing 7,000 publications – the most comprehensive study to date of the current and future impacts of the climate crisis on Earth’s oceans and the cryosphere (the parts of the planet that are covered in ice). Rising ocean temperatures means more intense tropical cyclones, with more powerful storm surges and downpours, leading to more extreme weather along the coasts and potentially devastating loss of marine ecosystems. Summaries are provided by the National Observer  , Inside Climate News  and international NGO OneOcean

Even before the Kinder Morgan fight, Canada is falling short on its climate goals

As we have noted in previous posts in the WCR  , many voices have warned that Canada’s progress in reducing greenhouse gas emissions is falling short of its commitments under the Paris Agreement.  Three recent reports provide more evidence.

On March 27,  Perspectives on Climate Change Action in Canada—A Collaborative Report from Auditors General—March 2018  was released by the federal Commissioner of the Environment and Sustainable Development and for the first time ever, compiles the findings of the federal and provincial Auditors –General, with the exception of Quebec, which did not participate.  The results are presented for each province, and summarized as: Seven out of 12 provincial and territorial governments did not have overall targets for reducing greenhouse gas emissions; governments have different targets from each other, and of those that have targets, only two (New Brunswick and Nova Scotia) are on track to meet their targets. Most governments had not fully assessed climate change risks, and their plans to reduce greenhouse gas emissions consist of high-level goals, with little guidance on how to implement actions.  At the federal level, the report states: “ even though Environment and Climate Change Canada was the federal lead on climate change, the Department did not provide the leadership, guidance, and tools to other departments and agencies to help them assess their risks and adapt to climate change. Moreover, only 5 federal departments and agencies of the 19 examined undertook comprehensive assessments of the climate change risks to their mandates.”  There was limited coordination of climate change action within most governments. Some governments were not reporting on progress in a regular and timely manner.

The second analysis is from the Pembina Institute, which partnered with the Energy Innovation of San Francisco to develop the Energy Policy Simulator (EPS), an economic modelling tool to evaluate the effectiveness and costs of  energy and climate policies for Canada. Enhancing Canada’s Climate Commitments: Building on the Pan-Canadian Framework applies the Energy Policy Simulator to three different policy scenarios, including the Pan-Canadian Framework for Clean Growth and Climate Change   , and concludes “ that even if the PCF is fully implemented, 2030 emissions will exceed Canada’s goal by 161 million metric tons (MMT), a gap 3.7 times larger than the 44 MMT shortfall predicted by Canada’s government. Extending and strengthening PCF policies would allow Canada to come much closer to its target, save money, and save human lives.”  The Energy Policy Simulator is offered here  as a free, open-source app available for other researchers to use.

Finally, the devil is in the details when author Barry Saxifrage of the National Observer took a close look at the federal government’s report to the UNFCC in December 2017, the 7th National Communications report. In “Canada’s climate gap twice as big as claimed – 59 million tonne carbon snafu” (March 27)  , the author contends that “The Trudeau government says its proposed climate policies will get Canada to within 66 million tonnes of our 2030 climate target. That’s already a big gap, but the federal accounting also assumes we can subtract a huge chunk of Canada’s emissions.”  That “huge chunk” refers to a further 59 MtCO2 of carbon emissions which the government omits to tally as part of our Canadian emissions, presuming that offsets will be purchased by Ontario and Quebec through their participation in the cap and trade market of the Western Climate Initiative with California. So far, the U.S. has not agreed to such an arrangement.

On a more optimistic note, a new report states:  “Canada can reach its 2030 target if the federal, provincial and territorial governments implement climate policies in a timely and rigorous way. The Pan-Canadian Framework has the policy tools needed to achieve the target but measures will have to be ratcheted up to fill the 66 million tonne gap.” In  Canada’s Climate Change Commitments: Deep Enough?  ,authors Dave Sawyer and Chris Bataille use economic modelling to show that Canada could honour its Paris GHG reduction commitment (30 per cent below 2005 levels by 2030) and still achieve GDP growth of at least 38 per cent. They compare this to a GDP growth of 39% if Canada took no action to reduce greenhouse gases.   The report calls for transformation changes, specifically: Building exclusively net-zero energy homes, i.e. buildings that generate as much energy as they consume. • The electrification of transportation, so that cars, trucks and trains can be powered by renewable energy rather than oil, which contributes to climate change. • Wholesale shifts away from fossil fuels and towards renewable energy. • Driving down energy needs by making industry, buildings and vehicles more energy efficient. • Embracing the full potential of energy storage to maximize the use of renewable electricity and building infrastructure to trade  that electricity between jurisdictions.

Canada’s Climate Change Commitments: Deep Enough?  was released on April 12 jointly by four environmental advocacy organizations: Environmental Defence, Climate Action Network, The Pembina Institute, and the Conservation Council Of New Brunswick.

 

Ontario’s GHG emissions at lowest level since 1990 – Environmental Commissioner commends the first year of cap and trade but recommends changes for freight sector, green procurement

Ontario logoOn January 30, 2018  the Environmental Commissioner of Ontario (ECO) submitted her annual Greenhouse Gas Progress Report to the Legislative Assembly of Ontario –  an independent, non-partisan review of the government’s progress in reducing emissions for 2016-2017.  The report, Ontario’s Climate Act: From Plan to Progress  covers the period since the  Climate Change Action Plan was introduced in June 2016, and the  cap and trade market became effective January 2017.  The report provides detailed emissions  statistics by sector and sub-sector, catalogues and critiques climate-related policies, and places Ontario’s initiatives in a national and international context – especially the cap and trade market and its relationship with the Pan-Canadian Framework on Clean Growth and Climate Change.  Top-level findings:  overall, GHG emissions were at the lowest level since reporting began in 1990 and “the first year of cap and trade went remarkably well”. Because  Ontario’s market is part of the Western Climate Initiative (WCI) which  includes California and Quebec, the report warns that prices make weaken because of political  uncertainty in the U.S., and also calls for more “bang for the bucks” in the Greenhouse Gas Reduction Account, which manages the proceeds of the carbon auctions.  Chapter 4 includes an explanation and critique of Ontario’s proposed carbon offsets, which are also tied to the WCI, and states that some sectors at some risk of being little more than greenwashing.  The Commissioner singles out the emissions of Ontario’s transportation industry and  states that it will be impossible to meet Ontario’s emissions reduction targets unless urgent action is taken to rein in emissions from the freight sector, with recommendations to “encourage the freight sector to avoid trucking where possible (e.g., through logistics and road pricing), improve diesel truck efficiency (e.g., through incenting the scrapping of older diesel trucks), and shift freight away from fossil fuels (e.g., providing more targeted support for zero-emission trucks).” UPS electric truck The report also calls for improved green procurement policies in government’s own spending and a stronger climate lens for regulation, taxation and fiscal policies.  The  Ministry of Energy is singled out in this regard:   “For example, the Ministry of Energy by itself governs 70% of Ontario’s emissions, yet its 2017 Long-Term Energy Plan does little to achieve Ontario’s climate targets.”  An 8-page summary of the report is here ; the full report, (all 284 pages) is here ;  eight Technical Appendices are available from this link.

 

Canada’s progress on emissions reduction: New reports from OECD, UNFCCC , and policy discussion

An excellent overview article about Canada’s  “staggering challenge” and policy options to meet its emissions reduction targets appeared in The Conversation on January  11, 2018),  written by Warren Mabee, Director of the  Institute for Energy and Environmental Policy at Queen’s University and a Co-Investigator in  the Adapting Canadian Work and Workplaces to Respond to Climate Change (  ACW) project.   “How your online shopping is impeding Canada’s emissions targets”  outlines  the issues of clean electricity, transportation emissions (where your online shopping can make a difference), greener homes,  and rethinking fossil resources, and concludes that  “If we’re to succeed, Canada will need an integrated, holistic suite of policies – and we need them to be in place soon.”

oecd-environmental-performance-reviews-canada-2017_9789264279612-enOther recent publications take stock of Canada’s emissions reductions in greater detail.  In its  3rd Environmental Performance Review for Canada released on December 19, the OECD warns that  “Without a drastic decrease in the emissions intensity of the oilsands industry, the projected increase in oil production may seriously risk the achievement of Canada’s climate mitigation targets… …“Canada is the fourth-largest emitter of greenhouse gasses in the OECD [in absolute terms], and emissions show no sign of falling yet.”  Canada’s emissions actually did decrease since the last report was issued in 2004, but only by 1.5 per cent compared to reduction of 4.7 per cent by the OECD as a whole.  In addition to the impact of oil sands production, the OECD singles out a regime of poor tax incentives: “Petrol and diesel taxes for road use are among the lowest in the OECD, fossil fuels used for electricity and heating remain untaxed or taxed at low rates in most jurisdictions, and the federal excise tax on fuel-inefficient vehicles is an ineffective incentive to purchase low-emission vehicles.”

The OECD analysis finds support in a report from two researchers from the University of Toronto, in “How the oil sands make our GHG targets unachievable”   in Policy Options.  They state: “… only with a complete phase-out of oil production from the oil sands, elimination of coal for electricity generation, significant replacement of natural-gas-fuelled electricity generation with electricity from carbon-free sources, and stringent efficiency measures in all other sectors of the economy could Canada plausibly meet its 30 percent target.” The authors recommend a  gradual (12-to-15-year) phase-out of oil sands operations, with workers and capital redeployed to emerging sectors  such as renewable energy and building retrofits, and contend that  the importance of oil sands production is overstated. “….  the direct contribution of the entire oil, gas and mining sector to Alberta’s 2016 GDP was 16.4 percent, of which oil sands mining and processing was likely about one-third (or 5 to 6 percent of total provincial GDP)” ….and oil sands oil production is estimated to account for only 2 percent of Canadian GDP.”

Yet the federal government continues the difficult balancing act of a  “have-it-all” approach – for example, in a speech by Natural Resources Minister Jim Carr  in November 2017, in which he defended the approval of the Trans Mountain Pipeline with: “We need to prepare for the future, but we must deal with the present …..That means continuing to support our oil and gas resources even as we develop alternatives – including solar, wind and tidal…. new pipelines will diversify our markets, be built with improved environmental safety and create thousands of good middle-class jobs, including in Indigenous communities. They were the right decisions then and they are the right ones now. ” A recent blog by Patrick DeRochie of Environmental Defence, “Trudeau Thinks We Can Expand Oil And Still Reduce Carbon. Let’s Put That To A Test” , challenges this view .

On December 29, Canada issued a press release announcing that it has submitted its Seventh National Communication and Third Biennial Report to the United Nations Framework Convention on Climate Change , required by the UNFCCC to document progress towards its 2030 greenhouse gas emissions reduction goal of 30% reduction from 2005 levels.  The title of the government press release, “Canada’s Climate action is Working, Report to United Nations Confirms” is justified by including estimates of the effects of policies still under development in a “with additional measures scenario”. Under that scenario, the government forecasts an emissions decline across all economic sectors,  equivalent to approximately a third of Canada’s emissions in 2015 by 2030… ”

Meanwhile, the federal government has released a number of announcements and legislative proposals in December 2017 and January 2018. Regarding  the planned carbon pricing backstop under the Pan-Canadian Framework, which will come into effect by January 2019:  Details are set out in:  Supplemental Benchmark Guidance   Timelines ,  and the Letter to Ministers in December, and on January 15, the  proposed carbon backstop  legislative framework was released as Legislative and Regulatory Proposals Relating to the Greenhouse Gas Pollution Pricing Act and Explanatory Notes (French version here) .  Also on January 15, the federal government released for comment the proposed regulatory framework for  carbon pricing for large industrial facilities – an Output-based Pricing System (OBPS) described in more detail in a separate WCR post here.

On December 12, the  Clean Fuel Standard Regulatory Framework was released for comment.  The government has also committed to developing a national strategy for zero emission vehicles in 2018 to increase the supply of zero-emission vehicles.

Also on December 12, and capping six months of consultation under the banner Generation Energy,  the Minister of Natural Resources announced the creation of a 14-member Generation Energy Council to be co-chaired by Merran Smith,  Executive Director of Clean Energy Canada, and Linda Coady, Chief Sustainability Officer at Enbridge. (Bios of all members are here ). The council is tasked with preparing a  report to advise the government on an “ energy policy that ensures meaningful engagement with Indigenous peoples; aligns with Canada’s Paris Agreement commitments and the Pan-Canadian Framework on Clean Growth and Climate Change; and complements the work being done by the provinces and territories, building on the shared priorities identified at the Federal, Provincial and Territorial Ministers Meeting at the Forum.”