Canada’s climate target is a smokescreen and full of loopholes

Increasing emissions from Canada’s oil and gas sector will make Canada’s post-2020 pledge very difficult to achieve. kris krüg/Flickr, CC BY-NC-ND

This month Canada’s federal government revealed the contribution that Canada intends to make towards a new global climate deal – 30% below 2005 levels by 2030.

On first glance, the target appears to be stronger than most observers of Canadian climate policy would have expected. Prime Minister Stephen Harper had earlier declared that Canada’s contribution would be “of similar levels of ambition to other major industrialised countries”.

However, closer scrutiny reveals that the target has major flaws. It is very unlikely that Canada will see a 30% reduction of domestic greenhouse gas emissions as a result of the pledge.

What’s in the target

Compared to 2005, the target would reduce emissions by 220 million tonnes of CO2-equivalent by 2030.

Canada plans to do this through fuel efficiency regulations, regulating hydrofluorocarbons (HFCs; less than 1% of Canadian emissions), limiting methane emissions from the oil and gas sector and addressing non-CO2 emissions from natural gas-fired power plants. All of these are important steps.

The cover note of the pledge also points to the fact that, in a federation such as Canada, every level of government has to play its part. Indeed, as we will see, there is a strong expectation on the part of the federal government that it is in fact the provincial governments that will achieve most of these promised reductions.

Creative accounting

Canada’s submission also specifies a new method of accounting for emissions from forestry and land use, which decreases the reduction Canada needs to make.

In previous years, the stated intention was to use a so-called reference level approach (which I discussed here) to calculate the sector’s contribution to the Copenhagen target. This was last estimated to result in 19 million tonnes worth of credits in 2020.

Meanwhile the new approach is estimated to yield a much higher credit, around 63 million tonnes, without any change in climate policy.

Further, a secret internal briefing memo prepared for the federal cabinet and seen by this author, estimates that the current oil price slump and the associated slow down in economic activity in some sectors, especially oil and gas, will result in a 30-million-tonne reduction in 2030 emissions, again without any actual federal climate policy.

Finally, the indication to use international offsets is a fundamental shift in the Harper government’s approach – Harper himself called international offsets “hot air”. When Canada withdrew from the Kyoto Protocol it was hinted that the reluctance of the government to meet its targets by purchasing international credits was a main reason for the decision.

In the previously-mentioned cabinet memo, the envisioned volume of offset purchases in 2030 is pegged at 33 million tonnes of CO2-equivalent – again without any changes in Canada’s domestic emissions profile. It is important to remember that international cooperation on climate change mitigation – and offset projects can represent such cooperation – is a crucial component of the overall response to climate change.

However, most of this cooperation must be realized in addition to, and not instead of, stringent domestic mitigation.

In total, of the 220 million tonnes of CO2-equivalent of emission reductions implied by the 30% target, up to 126 million tonnes of CO2-equivalent can therefore already be achieved without any actual changes to domestic climate policy.

Leaving provinces to go it alone

The current Canadian government has elected to pursue a sector-by-sector regulatory approach to climate policy, rather than, for example a market-based economy-wide one.

In practice, however, the only sectors regulated so far are vehicle fuel efficiency and coal-fired power generation, with a standard that will not be fully implemented until 2062.

At the same time, the Province of Ontario has already completely phased out coal fired generation, from a share of 27% of electricity generation in the early 2000s, highlighting a disconnect between federal and provincial policy approaches to climate change.

Canada’s Commissioner of the Environment and Sustainable Development, a part of the office of Canada’s Auditor General, concluded that there is strong evidence that Canada will fail to meet its 2020 target because of the federal government’s failure so far to “have an overall plan that maps out how Canada will achieve this target … or to provide the necessary coordination so that all levels of government … can achieve the national target”.

Instead of providing such coordinating role, the Canadian federal government is instead heavily leaning on the provincial governments to implement effective climate policy of their own.

In fact, in their briefing note to cabinet, federal bureaucrats estimated that as much as 89 million tonnes of the total 220-million-tonne Canadian reduction target could come from provincial efforts.

However, the most striking example of the sector-by-sector approach’s limitations is the fact that the federal government has repeatedly announced its intention (see here, here, here and here) to regulate the oil and gas sector since 2006 and has now dropped any plans for policies to address greenhouse gas emissions from this sector.

Environment Minister Leona Aglukkaq highlighted these intentions in her speech at the 2013 United Nations climate summit in Warsaw, but during her speech at the UN climate talks the following year, any references to her government’s intentions with regards to oil and gas were absent.

Oil sands missing in action

This brings us to the third major flaw in Canada’s INDC, the failure to address the fastest growing source of greenhouse gas emissions, the oil sands.

Oil sands emissions are expected to increase fourfold between 2005 and 2030 (by about 102 million tonnes), but there are no plans to regulate the sector.

As the fastest growing source of emissions, the oil sands represent an important test of the sincerity of the government’s intentions with regards to climate policy.

It is implausible to assume an emissions trajectory for Canada which is in line with global emissions pathways that are compatible with holding warming to 2C or less in which oil sands emissions are not addressed.

In fact, in recent years emissions growth in the oil and gas sector more than cancelled out any emissions reductions undertaken in other sectors of the economy. This included Ontario’s coal phase-out which is routinely characterized as “the single largest greenhouse gas reduction initiative in North America”.

Projected Changes in Canadian Greenhouse Gas Emissions through 2030. (Data Sources: Environment Canada: Emissions Trends 2014 and First Biennial Report) Note: some of the expected growth of the oilsands sector is masked by an expected decline of conventional oil and gas extraction. Author provided

Stopping free-riders

In aggregate, these observations suggest the Canadian pledge will result in much fewer real emissions reductions and long term climate and energy policy intervention than a quick glance at the top-level figure of 30% would suggest.

It is consistent with the track record of the current Canadian government whose stated approach to climate policy has been characterized by the Auditor General’s office as failing to meet the current reduction target for 2020.

In a federation, the minimum role of a federal government is to ensure fairness between its subnational entities and overall ambition of the country by restricting free-riding by parts of the country or sectors of the economy and by providing a common framework of minimal standards.

Judging from Canada’s pledge and the plans and considerations associated with it, this is not the approach of Canada’s federal government. Instead it appears intent to erect a smokescreen to shield the view from its unwillingness to address emissions from the largest growing source of emissions, the oil sands.

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