The negotiation and finalization of the pan-Canadian framework on climate change is a big deal. No Canadian government to date has completed and implemented a climate change plan. And there has never been a climate plan developed with widespread input and buy-in from the provinces and territories.
In some economic sectors, the framework contains concrete measures that will entirely phase out fossil fuels, and phase in clean, renewable energy. In others, the framework will create momentum in that direction. The exception continues to be the oil and gas sector, already Canada’s largest greenhouse gas emitter. In contrast to other sectors, the oil and gas industry will be allowed to increase greenhouse gas emissions. Measures in the framework are not expected to reverse projected emission increases from oil sands projects and new British Columbia liquefied natural gas (LNG) terminals.
Phasing out fossil fuels
Let’s state an obvious but rarely acknowledged fact: Addressing climate change means gradually eliminating the use of fossil fuels, because their combustion is the cause of the problem. The climate framework’s strength is that phasing out fossil fuels is the explicit goal for some sectors, such as coal-fired power and home heating. In others, including personal transportation, that goal is at least implied. These measures will get Canada on the 100 percent renewable pathway.
One of the most significant measures is the phase-out of coal in the power sector. The Canadian government used the Alberta government’s timetable and will phase out coal power by 2030 (though Nova Scotia and Saskatchewan may be granted exceptions). Given that Alberta completed the construction of a coal plant just five years ago, this is a stunning turn of events.
There are also meaningful plans for clean technology and renewable energy. The framework has initiatives aimed at the different stages of technology development, including early stage research, development, and deployment, as well as the commercialization and adoption of more advanced clean technologies. Enabling factors, such as cross-country collaboration and the development of a skilled workforce, are also included.
Canada’s model building code will become increasingly stringent, so that by 2030 all new buildings will generate as much energy as they use. Recent advances in building design, small-scale solar power, and power storage would actually allow Canada to reach that goal by 2025. (In the European Union, new buildings will have to be nearly zero-energy by 2021.) Regardless of when the goal is achieved, it will be a step towards new homes and buildings having a positive energy balance, producing renewable power for its occupants’ electric vehicle, for example. The framework also includes retrofit programs for existing buildings, an essential tool given that buildings last for decades, sometimes even centuries.
For transportation, proposals for continued improvements in vehicle fuel efficiency will reduce fuel usage and carbon emissions and spur the uptake of electric vehicles (EVs). Transportation initiatives also include a clean fuel standard (this would be important for the industrial sector too), and a national zero-emitting vehicle strategy, including public investment in electric-vehicle charging stations.
Federal-provincial-territorial collaboration is a crucial part of the climate framework, expressed in annexes for each province and territory. These include important commitments, including building electricity transmission between BC and Alberta and into Ontario, and between Atlantic provinces, to help with the phase out of coal and other fossil fuels in the power sector. Also included are investments in renewable energy, EV infrastructure, and improved energy efficiency in industry, buildings, and transportation.
The framework includes meaningful fiscal tools. On carbon pricing, Prime Minister Justin Trudeau stuck to his guns despite opposition from Saskatchewan Premier Brad Wall in particular, and reiterated that every Canadian province will have a price on carbon. The minimum carbon price will start in 2018 at $10/tonne and rise $10/tonne per year until it reaches $50/tonne in 2022. In order to get more than the modest reductions laid out in the framework, the carbon price must continue to rise beyond 2022.
There are also significant spending initiatives. The framework reiterates the federal government’s commitment to spending $81 billion over 11 years on public transit and other green infrastructure. The $2 billion Low Carbon Economy Fund will assist provinces in new initiatives to reduce GHG emissions, such as building retrofit programs. The Canada Infrastructure Bank will invest $35 billion through direct investments, loans, loan guarantees and equity investments. It will be critical that these investments go to infrastructure that will reduce rather than increase emissions.
The federal government has also committed to reduce emissions from its buildings and vehicle fleet and improve procurement practices, including using 100 percent renewable power by 2025. Finally, a much smaller investment, but one that has important equity considerations, is the $10.7 million commitment to replace diesel with renewable energy in Indigenous and other northern communities.
Canada’s blind spot: the oil and gas sector
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The new climate framework has measures that will reduce emissions in industrial sectors, including regulations to significantly reduce hydrofluorocarbon consumption in refrigeration and air conditioning. There are also regulations, first proposed in Alberta and adopted by the federal government, that will reduce methane emissions by 40 to 45 percent by 2025, most importantly in the oil and gas sector.
And yet, the oil and gas industry remains a blind spot for Canada’s approach to climate action. Every other economic sector will see emissions reduced under this framework. Every other sector will be reducing its dependence on fossil fuels. But the oil and gas sector will expand and increase its emissions (this is according to preliminary calculations; more detailed GHG emissions numbers are expected to be released in the coming days). That’s because the framework allows for increased production of oil and natural gas, facilitated by federal approvals of at least two tar sands oil pipelines and an LNG terminal and associated pipeline. Those three projects alone will add between 34.5 and 42 million tonnes of additional GHG emissions per year, even before the fuel is burned. It doesn’t help that the federal government plans to continue subsidizing the oil and gas sector until 2025. Research estimated those subsidies at $3.3 billion per year.
The projected increase in emissions from oil and gas is the biggest reason the climate framework shows a 44 Mt gap between Canada’s 2030 carbon reduction target and emission reductions from policies in the framework. That 20 percent of the effort, according to the framework, will be achieved by “additional measures” such as public transit/green infrastructure, technology and innovation, and stored carbon in forests. All are good initiatives to be sure but, to put it bluntly, they are unlikely to achieve the reductions needed.
The continued support for fossil energy development creates a number of risks for Canada. The first risk is that investments in high-carbon energy infrastructure such as oil pipelines and LNG terminals become stranded when international climate policies erode the global market for fossil fuels. The second risk, articulated by the federal government’s own 2050 climate strategy, is that investments in high-emitting infrastructure get locked in, facilitating the continued production and use of high-carbon fossil fuels. This “lock in” makes it more costly or impossible to achieve emission reductions consistent with Canada’s 2030 target or limiting global warming to 1.5 degrees Celsius. Achieving Canada’s weak 2030 target would thus involve sending money overseas to buy international carbon credits, an option included in the climate framework, rather than making investments in innovation and transition at home.
Solutions to closing the gap
There are options for Canada to meet and hopefully exceed its 2030 GHG target domestically, and to achieve deep decarbonization in the Canadian economy over the longer term. The first is for governments to turn this climate framework into a concrete and robust climate change plan by choosing the most ambitious policy options in all cases. That would mean the federal government continues to increase the carbon price floor at least at the same rate after 2022. Significant additional reductions are possible if the carbon floor price continues to rise.
It doesn’t stop there. Government strategies, for example the zero-emitting vehicle strategy to be developed by 2018, can set ambitious goals such as phasing out the internal combustion engine between now and 2030, as European nations have already pledged to do. Regulations to phase out coal power, to reduce methane emissions, or to move towards cleaner fuels can be designed to achieve goals more quickly, or reduce emissions more deeply once targets have been met. It is also critical that the federal government grant equivalency — allowing a province to implement its own policy on the basis that it is equivalent to the federal one — only if the provincial policies will fully achieve the same environmental benefits as the federal version. Recent equivalency agreements with Nova Scotia and Saskatchewan on the federal 2030 coal phase-out raise some doubts in that respect, since both provinces have received equivalency while continuing on their previous paths.
Regular progress reports on policy implementation, carbon emissions, and the effectiveness of action — as outlined in the “Reporting and Oversight” section of the framework — will also allow Canada to maximize emission reductions and stay on track to deep emission reductions and increase its ambition over time.
Finally, Canada should expect and plan for global success on climate change. That would require Canadian governments to rethink the merits of exporting an increasing volume of high-carbon fossil fuels to a world that has committed to taking action on climate change. Instead, governments should plan a carefully managed decline in fossil fuels over the next few decades, and implement a just transition plan for workers and communities, rather than doubling down on fossil fuel exports. Canadians would probably want their country to lose its status as a global top 10 GHG emitter.
The plan announced last week is historic. It’s a huge step toward tackling climate change. And yet it’s not enough. Thankfully there are ways it can still be strengthened and Canada can do its part to limit warming and protect the climate.
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