Reconciling climate change and fossil fuels in Canada

This article by Kerstin Muth, member of Environment North, was originally published in the Chronicle Journal on Wednesday March 2, 2016.

This week the premiers and the prime minister of Canada will get together and discuss greenhouse gas emissions and climate change. The ultimate goal is to develop a cohesive plan to reduce greenhouse gas emissions and meet Canada’s global GHG reduction commitment. Each province, in the absence of a national strategy for the past decade, has been developing its own plan. For example, the BC revenue neutral carbon tax, Alberta’s new plan of a cap on fossil fuel development and a carbon tax, Ontario and Quebec joining a cap and trade system. It will be a challenge to incorporate this piecemeal approach into a national strategy.
However, most difficult of all will be to reconcile the oil and gas industry with greenhouse gas emission reductions. The government just released Canada’s Second Biennial Report on Climate Change. In 2013 Canada produced 726 Mt of eCO2 eq. The oil and gas industry is responsible for about one quarter of these emissions (179 Mt) with 62 Mt coming from the oil sands alone.
The targets set by the Harper government are 622 Mt in 2020 and 524 Mt in 2030. It is important to note that the targets set by the Harper government were weak targets in terms of protecting the climate. However meeting these targets requires more stringent policies than the sum of existing provincial strategies.
All sectors including, the oil and gas industry, will need to reduce emissions in order to achieve the more aggressive targets that would protect the climate. The oil and gas industry is currently about 20% of Alberta’s GDP. It is a challenge to find the best mechanism that would not overly burden the provinces of Alberta and Saskatchewan.
Chris Ragan, chair of Canada’s new Ecofiscal Commission wrote in the Globe and Mail on September 22, 2015, that forecasts indicate the global oil economy will increase over the next 20 years before beginning a decline to levels far below today. Climate scientists warn that global greenhouse gas emissions need to decline now. Some major global trends offer some hope. The global renewable energy and clean technology industries continue to grow. Electric cars sales increased globally by 60 % last year and major automobile companies are investing billions in the next generation of plug-in cars. More jurisdictions are adopting carbon pricing mechanisms.
Fossil fuel companies will need to innovate and change. According to Karen Radford, an executive at Enbridge, they need to be more creative. Enbridge is planning to increase its investment in renewables to 10 billion dollars in the next five years. They are improving the efficiency of their pipeline infrastructure by looking at “pipeline design to actually build a whole new pipeline without building one”.
The new Ecofiscal Commision was formed in 2014. This group of economists has been very active in promoting carbon pricing and exploring the challenges for federal-provincial co-ordination on a climate strategy. In a recent blog Chris Ragan outlines three main objectives that should be adopted. First Canada should aim to significantly reduce greenhouse gas emissions by 2020 and achieve even deeper reductions by 2050. Second, these reductions should be achieved with the smallest possible economic cost which is carbon pricing. Third, the provinces should be able to develop their own policies.
The premiers and the prime minister are beginning their dialogue. Concern is that there will too much delay in developing a strategy or that the measures are insufficient. Discussion of future oil industry expansion often occurs without discussion of climate change. Environment North believes that it is not possible to reconcile investment in new major fossil fuel infrastructure such as the proposed Trans Canada Energy East Pipeline with a low carbon economy. In addition building a pipeline for transport of bitumen from the Alberta Tar Sands across difficult terrain and a meshwork of waterways puts northern Ontario’s valuable water resources at risk.
Canadian citizens should hold the new government to their word, - creating a national strategy that embraces scientific evidence and setting firm annual targets for Canada’s fair share of emission reductions. A transparent and easy to implement carbon-pricing mechanism is an opportunity to invest in the future that Canadians cannot afford to miss.