Canada can achieve net-zero electricity by 2035: Jaccard and Griffin

A new report by energy economists Mark Jaccard and Brad Griffin asserts that it is possible for Canada to achieve net-zero electricity by 2035, and describes and models how this can be achieved within the challenging jurisdictional structure.   A Zero-Emissions Canadian Electricity System by 2035 focuses on zero-emission policies that the federal government has the authority to implement, chiefly through the Canadian Environmental Protection Act and the Greenhouse Gas Pollution Pricing Act, which has allowed the federal government to establish an industrial output-based pricing system. However, the report recognizes that the electricity sector is primarily a matter of provincial jurisdiction, resulting in wide variations which are described in a summary of the status and key features for each province.  The report models two different future scenarios, both of which assume substantial growth of solar, wind, and other renewables; the  growth of energy storage capacity; and continued resistance to interprovincial grid development. However, one scenario assumes continued use of fossil-fuel electricity generation with carbon capture and storage in Alberta and Saskatchewan, along with the development of large hydro in Atlantic Canada.  In terms of cost, the authors state that the scenario allowing for fossil fuel generation will be cheaper in the short-term, and more expensive in the long-term. The authors recommend that the government continue with the existing structure of federal-provincial equivalency-based carbon pricing systems, but that those agreements be monitored by Canada’s Net-Zero Advisory Body, “using the assessment expertise of the Canadian Institute for Climate Choices”. (It should be noted that author Mark Jaccard is a member of the Institute’s Expert Panel on Mitigation).

The report was commissioned by the David Suzuki Foundation, in collaboration with the Conservation Council of New Brunswick, the Ecology Action Centre and the Pembina Institute.  A summary by Mark Jaccard appears in his blog .

Federal government releases detailed proposals for Canada’s carbon pricing system, including output-based pricing for industrial emitters

On January 15, the Minister of Environment and Climate Change and the Minister of Finance issued a press release  announcing the full draft legislative proposals relating to the carbon pricing system. Public comment will be accepted until February 12, 2018.   The full text of  Legislative and Regulatory Proposals Relating to the Greenhouse Gas Pollution Pricing Act and Explanatory Notes are in English  and French versions . Comment on the legislative proposals will be accepted until April 9, 2018, with “structured engagement” and consultation with provinces and territories, Indigenous Peoples, environmental non-governmental organizations, industry, and business promised over the Winter/Spring of 2018.

Minister McKenna also released for comment the proposed regulatory framework for carbon pricing for large industrial facilities – an Output-based Pricing System (OBPS), with the aim “to minimize competitiveness risks for emissions-intensive, trade-exposed industrial facilities, while retaining the carbon price signal and incentive to reduce GHG emissions.   Emission sources covered by OBPS will include fuel combustion, industrial process, flaring, and some venting and fugitive sources – but notably, “Methane venting and methane fugitive emissions from oil and gas facilities will not be subject to pricing under the OBPS.”  The system will include emissions of all seven of the UNFCCC-designated greenhouse gases, “to the extent practicable” – carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons, sulfur hexafluoride and nitrogen trifluoride. Details are  in Carbon pricing: regulatory framework for the output-based pricing system  (French version here) , and  build on the Technical Paper : Federal Carbon Pricing Backstop (French version here) , released in May 2017.

Leading up to the January release, the federal government had released clarification about the timing of  the planned backstop carbon pricing mechanism on December 20, 2017 – it  will come into effect by January 2019, bringing the carbon price to $20 per tonne in any jurisdiction that doesn’t meet the federal benchmark.  Full details are set out in:  Supplemental Benchmark GuidanceTimelines , and the Letter to Ministers . Generally positive reaction followed, from the Pembina Institute  and  Clean Energy Canada.

Initial reaction/summary of the proposed legislation released on January 15:  “Ottawa’s new carbon pricing plan will reward clean companies” from CBC,  and from the Globe and Mail, “Ottawa prepares to relax carbon-pricing measures to aid industry competitiveness” .  More substantive comment comes from the National Observer, in  “Trudeau government explains how it will make polluters pay” (Jan. 15).  Reaction from Environmental Defence came from Keith Brooks , who calls the proposed plan “an effective and fair pan-Canadian carbon pricing system.”  Reaction from  Clean Energy Canada is similar.

Meanwhile, in Alberta: Note also that the province of Alberta released their new Carbon Competitiveness Incentive Regulation (CCIR) for large industrial emitters in December 2017, also based on an output-based allocation system.  Carbon Competitiveness Incentive regulations replaced the current Specified Gas Emitters Regulation (SGER) on Jan 1, 2018, and will be phased in over 3 years.  It’s expected to cut emissions by 20 million tonnes by 2020, and 50 million tonnes by 2030.  Favourable testimonials from the oil and gas, wind energy, and cement industry are quoted in the government press release on December 6.

To explain output-based carbon pricing, the Ecofiscal Commission published Output-Based Pricing: Theory and Practice in the Canadian context , by Dave Sawyer and Seton Stiebert of EnviroEconomics in early December.  The highlights of the paper are summarized here, with a discussion of the pros and cons and challenges of implementation, with special attention to Alberta’s provisions.