Canada’s greenhouse gas policies to fall short of target, sources say

Theglobeandmail.com
July 25, 2016
By Shawn McCarthy

Canada faces a gap of 200 megatonnes - or 38 per cent - between its greenhouse gas reduction target for 2030 and the level that would be reached through federal and provincial actions to slash emissions that have been announced so far, government sources say.

Ottawa is working with provinces and territories this summer on a plan that would include new regulations, subsidies and a national minimum carbon price - all aimed at closing that gap and meeting Canada’s commitment to reduce greenhouse gases (GHGs) by 30 per cent from 2005 levels by 2030.

Several premiers oppose Prime Minister Justin Trudeau’s determination to establish a minimum national carbon price that would be met either by provinces boosting their own direct and indirect levies, or by Ottawa stepping in with some form of federal price.

At the premiers’ annual meeting in Whitehorse last week, territorial leaders said their constituents already face high energy prices and should not bear additional costs of a carbon tax. Saskatchewan Premier Brad Wall threatened to launch a court challenge if a federal carbon levy were to affect provincially owned utilities.

Current policies would fall well short of the target Canada submitted to the United Nations at last December’s Paris summit, a goal announced under the Conservative government and characterized by the Liberals as a “floor.” The Trudeau government went into the Paris meetings promising bold action on climate change and urging other countries to do the same.

Including climate plans announced by Alberta, Saskatchewan and Ontario in the past six months, Environment and Climate Change Canada officials calculate the country is still on track to emit more than 725 megatonnes of carbon dioxide and other GHGs in 2030, compared with the target of 524 megatonnes, sources said on Monday.

In a submission to the federal-provincial working groups, the Calgary-based environmental group Pembina Institute estimated the 2030 shortfall would be 185 megatonnes after the implementation of Ontario’s cap-and-trade regulation, Alberta’s carbon pricing plan and Saskatchewan’s commitment for 50 per cent renewable electricity within 15 years.

“Even with all national and sub-national climate efforts to date, Canada must bring in ambitious new policies and/or significantly increase the stringency of existing programs, to close the gap to 2030,” the Pembina submission said.

Pembina argued that all provincial carbon prices need to be significantly increased over the next 14 years, or the federal government should impose its own and return the revenue to the provinces while protecting low-income Canadians and industries that will face competitiveness challenges as a result of the changes. It suggested carbon prices should be more than $100 a tonne of CO2 equivalent by 2030.

While no decisions have been made, Environment Minister Catherine McKenna said recently the government is aiming for “uniformity in terms of a national price. Finance Canada is said to favour a federal carbon tax - with the revenues returned to provinces - if premiers fail to meet the minimum standard.

In their statement on climate change after the Vancouver summit last March, the Prime Minister and premiers acknowledged more action is needed for Canada to do its fair part in keeping global average temperatures from rising by more than two degrees above preindustrial levels.

They established four working groups in an effort to reach agreement this fall: on carbon pricing, on additional mitigation strategies such as tougher building codes and support for low-carbon transportation, on policies to expand deployment of clean technology and on strategy for adapting to a changing climate.

Environmental economist David Sawyer said the federal government may be overestimating the gap, in part because officials are not factoring in expected improvements in the oil sands, which emitted 59 megatonnes of GHGs in 2013. Before Alberta introduced a climate plan that includes a 100-megatonne cap, oil sands emissions were expected to climb to 113 megatonnes by 2030.

As well, Ontario and Quebec are expected to buy some 75 megatonnes of allowances from California in 2030 under the Western Climate Initiative, according to Mr. Sawyer’s forecasts, and those reductions would not be factored into projections for Canadian emission reductions.

At the premiers’ annual meeting in Whitehorse last week, territorial leaders said their constituents already face high energy prices and should not bear additional costs of a carbon tax. Saskatchewan Premier Brad Wall threatened to launch a court challenge if a federal carbon levy were to affect provincially owned utilities.

Current policies would fall well short of the target Canada submitted to the United Nations at last December’s Paris summit, a goal announced under the Conservative government and characterized by the Liberals as a “floor.” The Trudeau government went into the Paris meetings promising bold action on climate change and urging other countries to do the same.

Including climate plans announced by Alberta, Saskatchewan and Ontario in the past six months, Environment and Climate Change Canada officials calculate the country is still on track to emit more than 725 megatonnes of carbon dioxide and other GHGs in 2030, compared with the target of 524 megatonnes, sources said on Monday.

In a submission to the federal-provincial working groups, the Calgary-based environmental group Pembina Institute estimated the 2030 shortfall would be 185 megatonnes after the implementation of Ontario’s cap-and-trade regulation, Alberta’s carbon pricing plan and Saskatchewan’s commitment for 50 per cent renewable electricity within 15 years.

“Even with all national and sub-national climate efforts to date, Canada must bring in ambitious new policies and/or significantly increase the stringency of existing programs, to close the gap to 2030,” the Pembina submission said. Pembina argued that all provincial carbon prices need to be significantly increased over the next 14 years, or the federal government should impose its own and return the revenue to the provinces while protecting low-income Canadians and industries that will face competitiveness challenges as a result of the changes. It suggested carbon prices should be more than $100 a tonne of CO2 equivalent by 2030.

While no decisions have been made, Environment Minister Catherine McKenna said recently the government is aiming for uniformity in terms of a national price.

Finance Canada is said to favour a federal carbon tax - with the revenues returned to provinces - if premiers fail to meet the minimum standard.

In their statement on climate change after the Vancouver summit last March, the Prime Minister and premiers acknowledged more action is needed for Canada to do its fair part in keeping global average temperatures from rising by more than two degrees above preindustrial levels.

They established four working groups in an effort to reach agreement this fall: on carbon pricing, on additional mitigation strategies such as tougher building codes and support for low-carbon transportation, on policies to expand deployment of clean technology and on strategy for adapting to a changing climate.

Environmental economist David Sawyer said the federal government may be overestimating the gap, in part because officials are not factoring in expected improvements in the oil sands, which emitted 59 megatonnes of GHGs in 2013.

Before Alberta introduced a climate plan that includes a 100-megatonne cap, oil sands emissions were expected to climb to 113 megatonnes by 2030. As well, Ontario and Quebec are expected to buy some 75 megatonnes of allowances from California in 2030 under the Western Climate Initiative, according to Mr. Sawyer’s forecasts, and those reductions would not be factored into projections for Canadian emission reductions.