This week, the Intergovernmental Panel on Climate Change (IPCC) released its highly anticipated final draft report, Climate Change 2013: The Physical Science Basis. The report is the first of a three part series that will complete the Fifth Assessment report to be completed in 2014. This chapter follows on the heels of the Summary for Policy Makers which was released last Friday.

The report offers further evidence for many of the arguments made in previous Assessment reports: the impacts of climate change are measurable, and are expected to continue. While the report’s findings about the extent of climate change are no big surprise, the real game-changer is the call for an absolute limit on greenhouse gases.

This concept arose from the Potsdam Institute for Climate Impact’s ground-breaking study from 2009, which introduced the “carbon budget”. A carbon budget determines how much carbon the world has emitted to date and how much more we can “spend” before we reach a dangerous 2 degree Celsius warming. This carbon budget estimates that we only have 1 trillion tonnes of carbon to burn before we reach this target. To put that number into perspective, the world has already consumed over half of that amount, and burning only 10% of our known fossil fuel reserves would push us over the 2 degree limit. According to the World Resources Institute, the world has 30 years until this budget is spent.

The introduction of a carbon budget will raise challenging policy questions for Canada. The largest contributor to Canada’s GHG emissions is the energy sector, but production isn’t slated to slow down anytime soon because energy exports are a boost to the economy. It doesn’t help matters that Canadians are also one of the highest per capita consumers of energy.

The federal government has set emission reductions targets, and associated laws, policies and programs to help meet them. But without a carbon budget of our own, it is difficult to see if these policies will actually meet the targets that have been set.

Recent estimates from the Canadian Centre for Policy Alternatives argue that using the most conservative estimates, Canada’s own carbon budget is 5.1 billion tonnes when based on population, and 19.2 billion based on share of GDP. According to these estimates, 56%-77% of proven fossil fuel reserves should remain unrecovered if we are to stay within the carbon budget.

In the year ahead, the second and third chapters on the 5th assessment will be released. In particular, the third chapter on mitigation will be a long-awaited document for climate policy worldwide, and could help Canadian policy makers outline how Canada is staying on track to meet emissions reduction goals.