Bringing Canada Back in Line -- Part 2

Earlier this year, SP published an Issue Summary that described how a carbon price could help bridge the gap between Canada’s GHG-reducing ambitions and its performance to meet those ambitions. This Issue Summary was based on Environment Canada’s analysis that was the most recent at the time. This analysis has been updated and was released this week in the Emissions Trends 2014 report. Despite the passage of time and some small corrections to the data, overall the previous story holds true: without new and ambitious policy action (such as a price on carbon), Canada will miss its Copenhagen targets (reductions of 17% below 2005 levels by 2020) by a considerable margin (by almost half to be exact).

Here’s the bottom line from the newest report:

Progress on Canada’s 2020 Target (Mt CO2 eq)

Source: Environment Canada, Canada’s Emissions Trends, 2014, available at http://www.ec.gc.ca/ges-ghg/default.asp?lang=En&n=E0533893-1&offset=1&toc=show

This graph forecasts Canadian GHG emissions over time, and how these emissions can be different with the application of various climate policy measures. Similar to last year, the graph shows a gap still exists between ambitions and performance. (This gap is represented as the difference between the target and the blue line showing current and expected policy measures). The updated data shows that an additional 116 Mt of reductions will be required over and above any current measures to meet national GHG targets by 2020.

A significant factor in the GHG gap is the oil and gas sector. Contributing a quarter of all national emissions, the oil and gas sector is currently, and is predicted to continue to be, the largest contributor to Canada’s total GHG emissions. Emissions from the oil and gas sector are expected to increase by 45 Mt by 2020, or 28% between 2005 and 2020.

Despite commitments since 2007 that the federal government would regulate the oil and gas sector as part of its sector-by-sector approach to emissions reduction, the federal government this week argued that such regulations will not occur unilaterally. Given the foreseeable increases in emissions in the oil and gas sector, without these regulations, or other climate actions, it seems that Canada will have a very hard time meeting its 2020 targets.

And this is one of Canada’s worst kept secrets. The Climate Change Performance Index 2015 was released this week and lists Canada as one of the worst performers in the industrial world (58th out of 61 countries). Canada has the worst performance of all G8 countries, and when compared to other OECD countries, Canada is second to last only after Australia.

Climate Change Performance Index for G8 Countries

Climate Change Performance Index for OECD Member Countries

So what does all this tell us? It tells us that on a national scale, Canada has a hard battle ahead to meet its targets. To get there, we’ll need carbon pricing of some form, and lots of complementary measures too (for an example of one approach to closing this gap, see this week’s report from the David Suzuki Foundation). And we’ll need strong political will.

So let’s not forget to see the forest for the trees-in the last few weeks Canada’s provinces have shown political leadership to get Canada back on a climate track:

• This week Quebec, Ontario and BC - along with California - signed the Compact of State and Regions agreements to collaborate with other jurisdictions on climate change
• The premiers of Ontario and Quebec recently signed a joint agreement to work together to trade electricity and to advance their climate change agendas
• A few weeks ago Quebec held its first linked auction with California in their shared cap and trade program
• Last week, Nova Scotia negotiated the first equivalency agreement with the federal government, which allows the province to devise its own strategies to meet emission reduction targets
• A review of Nova Scotia’s taxation policy concluded in a recommendation for a carbon tax for Nova Scotia
• Ontario [|announced this week] that they will host a pan-American dialogue on long-term climate action at a 2015 Climate Summit of the Americas
• A new agreement was formalized between Quebec and California aimed at the electrification of transportation

These recent actions by individual provinces build upon an agreement this summer, when the premiers of all Canada’s provinces and territories agreed to collaborate on a national energy strategy.

So while Canada will have to play climate policy catch-up to the rest of the world, it appears that a number of forward-looking provinces have already signed up to lead Canada in this mission.