The world marked the fifth anniversary of the groundbreaking Paris climate agreement in December with a sobering reminder. Despite a drop in greenhouse gas emissions in 2020 due to the COVID-19 pandemic, there remains a substantial gap between the commitment to limit global warming to well below 2 degrees Celsius compared to pre-industrial levels and the actions taken to date to accomplish that critical goal.

In its annual emissions gap report released in early December, the United Nations Environment Programme (UNEP) noted many countries, including Canada, are not on track to meet modest Paris targets, let alone more ambitious ones that are needed to avert a climate catastrophe later this century.

Indeed, GHG emissions continued to rise in 2019, and after a decline in 2020 due to the pandemic, could increase sharply as we emerge from the crisis unless aggressive action is taken to avoid that scenario, UNEP said.

Despite that grim assessment, there is cause for hope that 2021 will be a watershed year in the global battle against climate change.

Developments late last year point to accelerated activity and increased ambition both internationally and in Canada, where the Liberal government has committed to put the country on track to achieve net-zero GHG emissions by 2050.

With the distribution of vaccines underway, we can expect an end to the public health emergency this year, though it may take longer than we would like. With the need for economic stimulus, there will be an opening for governments to accelerate the green transformation while addressing persistent inequities in our society.

“Seizing this opening will be critical to bridging the emission gap,” UNEP said in its December report.

In Canada, the Trudeau government made significant progress late last year in putting in place key elements of a more ambitious climate plan, including a commitment to dramatically increase its carbon price over the next 10 years. The 2021 federal budget will have to buttress that effort with more spending and tax breaks to reduce emissions and prepare Canadians to face growing climate-related impacts such as rising sea levels, increased flooding, more intense heat waves and forest fires.

Internationally, governments and business leaders revved up their climate-change commitments last year, with 126 countries now committed to achieving net-zero GHG emissions by 2050, or shortly thereafter. U.S. president-elect Joe Biden has promised to join them.

As we head into 2021, here are some looming developments that will determine the course of the global climate effort and its impact on the energy sector.

Biden’s inauguration

The incoming Democratic president will reverse the past four years of climate neglect practiced by Donald Trump. On the global stage, Biden will bring the United States back into the Paris Accord, and plans to engage other leading emitters, including China and India, to pursue more ambitious action.

His domestic agenda got a boost when the Democrats won effective control of the U.S. Senate by capturing two Georgia seats that were subject to a runoff election on January 5. Still, the Biden administration will have trouble getting climate change legislation through a fractious Congress, where even Democrats don’t agree on what’s required. The president-elect may have to rely considerably on executive branch action, including new fuel efficiency standards for vehicles that Canada will likely sign on to.

Supreme Court of Canada’s ruling on the federal carbon price

 The top court heard arguments in September from Conservative-led provinces seeking to have Ottawa’s carbon price declared unconstitutional. Previously, courts in Ontario and Saskatchewan had upheld the system, while an Alberta court ruled it unduly infringed on provincial jurisdiction.

The carbon price is one of the key planks in the Trudeau government’s climate strategy. The prime minister announced in December a plan to increase it by $15 a tonne starting from a $50 base in 2022, to hit $175 a tonne by 2030.

A favourable ruling from the Supreme Court would allow the Liberals to proceed with the planned increase. A loss would represent a serious setback for federal climate policy, though Environment Minister Jonathan Wilkinson says Ottawa is prepared with a Plan B.

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Federal budget

At some point in the first half of 2021, Finance Minister Chrystia Freeland is due to release her first budget since taking on the role last September. In the speech from the throne on Sept. 23, the government pledged that action on climate change would be the cornerstone of its plan to build back the Canadian economy and create one million jobs.

Environment and Climate Change Canada tabled its updated climate plan in December and many advocacy groups were disappointed by the level of spending to which it committed. Freeland’s budget may include additional spending in areas such as public transit, clean infrastructure and measures to reduce risks of massive property damage from extreme weather events. As well, Ottawa is considering new tax incentives for carbon capture and sequestration and investment in hydrogen infrastructure.

KXL decision

Biden will likely move early in his tenure to revoke the federal permit that Trump provided to the Keystone XL pipeline, which Alberta has supported with a $1.5-billion investment. While the Canadian government is lobbying in support of it, both Biden and his climate czar, former Secretary of State John Kerry, were key figures in an administration that originally rejected the project. The Obama administration had pointed to the climate impact of rising greenhouse gas emissions from the oil sands.

Still, the hard-pressed oil and gas industry will see additional export capacity from Enbridge Inc.’s mainline expansion and, eventually, completion of the TransMountain pipeline project. Whether that export capacity helps revive the fortunes of Western Canada’s oil industry remains to be seen. Recovery from the pandemic should help support prices, but oil sands companies are facing enormous pressure to dramatically reduce the GHG emissions associated with their production.

Federal election

Trudeau’s Liberals closed the year in good shape in the polls and may look for a post-pandemic bounce in the latter part of 2021 to try to reclaim the majority status that eluded them in the 2019 election. Climate-change policy will be a major election issue if Canadians go to the polls this year, as it was last time.

Trudeau has staked his government on the belief Canadians are willing to swallow a large increase in the carbon levy so long as they have the money return to them in the form of rebates.

The Conservatives’ new leader, Erin O’Toole, is looking to establish his party’s credibility on climate change. He has endorsed the goal that Canada achieve net-zero emissions by 2050 but has not produced a plan to achieve such a target. Some senior Conservative strategists are calling on the party to abandon its opposition to the carbon tax and embrace a revenue-neutral version.

COP26 in Glasgow

After the annual U.N. climate conference was cancelled in 2020 due to the pandemic, the focus turned to the Glasgow conference planned for November under the United Kingdom’s presidency. Governments, including Canada, are expected to submit new emission-reduction targets to increase the ambition to which they committed at Paris five years ago.

British Prime Minister Boris Johnson has appointed former Bank of England chairman Mark Carney as his finance adviser for the meeting. Carney has said his goal is to have governments support mandatory public reporting by key players in the financial system on the risks and opportunities that climate change poses to their business strategies.

Like Copenhagen in 2009 and Paris in 2015, the Glasgow climate conference will provide a clear indication of the world’s ability to tackle climate change. We should heed the lessons of the COVID-19 pandemic in taking seriously the warnings of scientists and insisting our governments act to head off a looming crisis.

Photo: A fisherman in a rubber boat is surrounded by rotting cyanobacteria in the Kyiv Water Reservoir near Kyiv, Ukraine, on Nov. 15, 2020. The region was rocked by extreme hot weather throughout 2020, which resulted in widespread damage to agricultural crops and destruction of the natural habitat of some species. (AP Photo/Efrem Lukatsky)

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Shawn McCarthy
Shawn McCarthy is an independent writer and senior counsel for Sussex Strategy Group.

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