Director, ISSP and Chair, Positive Energy
The latest report of the Intergovernmental Panel on Climate Change underscores yet again the urgency to act, noting that climate change is widespread, rapid and intensifying. In Canada, there is far more consensus and support for taking action in business and society than there was even five years ago, and we have a comprehensive plan to reach our 2030 emissions reduction targets.
But will it be enough?
Not likely. Meeting Canada’s Paris targets would require cutting emissions by one-third in the next eight and a half years. It’s difficult to fathom how the country could achieve this when we haven’t cut them at all in the last 15. And it’s magical thinking to believe we can achieve Ottawa’s new pledge made at U.S. President Biden’s climate summit in April to reduce them by 40 to 45 per cent in nine years.
Our outlook for 2030 isn’t great, but we shouldn’t discount the fact that the country is making genuine progress. We now have a carbon tax that applies across the country, and we have the most comprehensive national climate plan we’ve ever had.
As we look past the upcoming election, there’s room for optimism that Canada can bend its emissions curve downward, but there is still much to be done.
Let’s look at the numbers. Under the Paris Agreement, Canada committed to reducing greenhouse gas emissions 30 per cent below 2005 levels by 2030. That equates to reducing them from 730 megatonnes (MT) in 2005 to 511 MT in 2030. The updated pledge at the Biden summit would require reducing them to between 400 and 440 MT. To date, our performance is bleak. Emissions have not budged since 2005, remaining stuck at 730 MT in 2019.
In December 2020, the federal government released its new climate plan: A Healthy Environment and A Healthy Economy. It builds on the 2016 Pan-Canadian Framework on Clean Growth and Climate Change and is the most serious climate plan the country has had to date. The centrepiece is the federal carbon tax, which will rise from $50 per tonne in 2022 to $170 by 2030.
Other key elements include a clean fuel standard that aims to reduce the carbon intensity of liquid fuels by 13 per cent below 2016 levels by 2030; regulations to reduce methane emissions by 40 to 45 per cent below 2012 levels by 2025; a target of 90 per cent non-emitting electricity generation by 2030; a push for zero emissions vehicles to account for 10 per cent of light-duty vehicle sales by 2025, 30 per cent by 2030 and 100 per cent by 2040; comprehensive carbon capture, utilization and storage (CCUS) and hydrogen strategies; a roadmap for small modular nuclear reactors; and billions in spending on infrastructure and innovation. The federal government projects that this plan will reduce emissions to 503 MT by 2030 – 8 MT below Canada’s Paris commitment.
Will it work?
The country has made great progress in laying the groundwork for bending the emissions curve downward. Ottawa’s backed its strengthened climate plan with the net zero emissions by 2050 legislation, which requires governments to report on emissions reduction performance every five years (although this doesn’t kick in until 2030, conveniently for the government).
But Canada has an unbroken track record of making ambitious climate commitments and failing miserably at achieving them – think Rio, Kyoto, Copenhagen.
How can we make Paris different? What’s missing, and where are the obstacles? The biggest one is dangerous optimism – that Canada’s exuberance around climate action underestimates what it takes in the real world to translate targets into achievements. To address this, we need to take five key actions:
- Take off our implementation blinders. We spend a lot of time focusing on the “what” of policy but have a systematic blind spot when it comes to the “how” of implementing it in the real worlds of politics, communities, federalism, regulatory systems, investor confidence and energy markets. A lot of the government’s plan focuses on technology development and deployment, along with new energy infrastructure. That means we need investor confidence, community confidence and robust, trusted decision-making arrangements for innovation and energy projects.
- Expand the focus from technological innovation to institutional innovation. We need to develop decision systems that support emissions reductions. A lot of this hinges on the regulatory system, which has not been built to drive emission reductions. As just one example, what are the regulatory frameworks that will incentivize emissions reductions in the utilities sector? Utilities regulation is anchored in a cost-of-service model that has a very hard time taking emissions reductions into account in decision-making – if at all. That has to change if we want to leverage utilities’ capacity to reduce emissions.
- Align climate objectives with energy objectives. The climate and energy policy communities in Canada tend to exist in silos. There are a lot of missed opportunities and needless friction due to narrow energy- or climate-only approaches. A key example here is energy security: climate plans need to broaden their focus from energy sources (what the energy mix is going to look like) to incorporate energy availability/reliability and energy affordability. Reliable, affordable energy needs to be the foundation of climate policy to secure ongoing public, investor and political support.
- Make collaboration the cornerstone of climate plans. We need deep collaboration between levels of government, including Indigenous and municipal governments, the private sector, local communities and researchers. This is a major weakness in Canada that hamstrings rapid, effective action. We rarely have the pipelines of collaboration needed to move ideas through from conception to implementation. This is particularly the case when it comes to technology development and deployment.
- Have a robust policy discussion about the role of Canada’s oil and gas sector in the country’s energy and climate future. Discussions have tended to be polarized and simplistic. Oil and gas will continue to be a part of the global energy system for decades to come. What role does Canada want to play in those markets domestically and internationally over the short and long terms?
If Canada doesn’t attend to these issues, we will have a very hard time bending the emissions curve downward and driving toward our 2030 targets and net zero by 2050. As the latest IPCC report makes plain, attention to these matters couldn’t be more urgent.