Reducing Greenhouse Gas Emissions in Canada

Stéphane Dion
Special Envoy of the Prime Minister to the European Union and Europe and Ambassador of Canada to Germany
Rome, Italy

March 23, 2018

It is an honor for me to be in Rome today at the bellissimo Villa Wolkonsky side-by-side with the United Kingdom’s Special Envoy for Climate Change Nick Bridge. I was proud when, Claire Perry, the United Kingdom’s Minister of State for Climate Change and Industry, and Catherine McKenna, Canada’s Minister of Environment and Climate Change, launched, on November 16th, 2017, the Powering Past Coal Alliance, where 27 governments committed to phasing out their coal-fired power plants.  1  This to me was the strongest moment of COP 23, in Bonn.   While the members of this Alliance account for only a small share of worldwide coal production and consumption, this is a very important initiative, because to limit warming to 2ºC, humanity would have to wean itself off traditional coal.

Canada has noticed that the United Kingdom (UK) released its Clean Growth Strategy in October 2017, which includes a series of policies to support the UK’s ability to meet its Climate commitments 2  I will talk today about similar efforts, which we are deploying in Canada.

Today, I am pleased to be talking to you about the challenge that Canada faces in terms of reducing its greenhouse gas (GHG) emissions. In December 2016, the government announced the Pan‑Canadian Framework on Clean Growth and Climate Change. 3  One of this plan’s primary objectives is to enable Canada to achieve the greenhouse gas reduction target that it committed to in Paris and even, if possible, exceed that target and cut GHG emissions even further.

That is not the first time that the government of Canada has released a full plan to reduce its GHG emissions. In 2005, it announced Project Green, a comprehensive climate change plan. 4  (Full disclosure: I was Canada’s Environment Minister from 2004 to 2006.)  This plan was never implemented in the years that followed. The same fate should not occur to the 2016 Pan-Canadian Framework. This time Canada must succeed and indeed the government is committed to implementing its climate plan.

The new plan is the subject of consensus in Canada, but does not rally unanimous support. Notably, the Government of Canada is working to find common ground.

From the outset, I would like to emphasize how critically important it is for all countries, not just Canada, to achieve their GHG reduction targets set at the Paris conference on December 12, 2015. In fact, for the sake of humanity and despite opposition, it is imperative that Canada, the United Kingdom, Italy—indeed, all countries—achieve or surpass their Paris targets.

Indeed, according the UN Environment 2017 Emissions Gap Report, if all countries were fulfilling their current GHG reduction pledges, as set out in their Nationally Determined Contributions (NDCs) at COP 21, in Paris, that would account for only one third of the reductions needed to get on the pathway to staying below 2ºC of warming.  5 In fact, even if Parties meet their first NDCs and maintain a similar level of ambition beyond 2030, the UNEP report forecasts that global warming would reach 3ºC by the end of the century. This estimate is consistent with other research, including that of the Climate Action Tracker, which estimates that compliance with existing NDCs will put us on a pathway to 3.2ºC of warming by 2100. 6 

The Paris Agreement does not finish with the current targets: every party is obliged to intensify its ambition, so that the fight against climate change strengthens over time and avoids any backsliding. The Paris Agreement signals to markets that the transition to a green economy is inevitable.

Current estimates indicate many countries are not yet on track to reach their targets. 7  All countries must continually work to fulfill and then strengthen their climate change plans, and revisit their progress at regular intervals. As I will explain latter, in its new plan, Canada has established a process to annually report to the Prime Minister and provincial and territorial Premiers on our progress, allowing us to take stock regularly and consider further opportunities to reduce emissions.

No country will be immune to the effects of climate change and certainly not Canada, whose average temperature has increased by 1.3 degrees between 1950 and 2010, nearly twice as fast as the global average.  8 We all have a responsibility to work to avoid the worst effects of climate change – including growing intensity of extreme meteorological events, rising ocean levels and acidification, extinction of animal and plant species, water and food shortages, and damage to infrastructure and human habitat. Besides, the transition to clean growth presents ample opportunities for all countries to realize.  Canada is determined to strengthen its efforts in order to meet its climate change commitments.

Before I further discuss with you the new climate plan that Canada has established, let us look at the Canadian context regarding GHG emissions.

1. Greenhouse Gas Emissions in Canada

Canada represents only 1.6% of global GHG emissions, but is one of the highest per capita emitters, the third largest in the OECD. 9  In 2014, each Canadian emitted on average 20.5 per tonne of equivalent CO2.  Although that is less than a decade ago, it is significantly above the OECD average of 12.4. 10  A series of factors have been invoked to explain Canada’s per capita emissions: the harsh climate; the vast distances between cities in a country as large as Europe but with a population of only 36 million; sustained economic and population growth; a resource-rich economy of which almost a third is still comprised of goods-producing industries; a very tightly integrated North American economy, in which Canada has difficulty acting where the United States has a very real and direct impact.  

This being said, three quarters of Canadians live in Ontario, Quebec and British Columbia, three provinces whose emissions levels are in line with the OECD average of 12.4 tonnes per capita (see Annex 1).

Emissions vary significantly across the country due to energy sources and economic structure. Canada’s energy-extractive industry provinces have emissions per capita considerably higher than the OECD average. Such a geographic concentration of GHG emissions, likely unique to Canada, is not found in three other comparable federations: neither the US, Germany nor Australia. 11  Similarly, in the EU, the four largest member states emit almost the same number of tonnes per resident: Italy (7.0), France (7.2), the United Kingdom (7.9) and Germany (11.1). 12 

In 2015, Canada’s total GHG emissions were 18% over 1990 levels and 2.2% below 2005 levels, the base year of Canada’s NDC.  The growth of emissions since 1990 occurred mostly during the first decade of that period (see Annex 2). Emissions have been relatively stable during the first half of the 2000s, dropped during the 2008/09 global financial crisis, and have been relatively stable since then. Between 2000 and 2014, they decreased slower (-1.5%) than those of the OECD as a whole (-4.7%). 13  Canada’s energy intensity has declined by 20% between 2000 and 2015, about the same as the OECD (22%).

As shown in Annex 3, most Canadians live in provinces where GHG emissions dropped between 2005 and 2015. Substantial increases occurred only in provinces with significant production of oil, gas and coal. For example, Alberta accounts for 38% of national emissions in 2015 and saw its emissions increase by 18% between 2005 and 2015, primarily as a result of the expansion of oil and gas operations.

In Annex 4, we see that in three sectors of the Canadian economy – buildings, agriculture, waste & others, GHG emissions remained stable between 2005 and 2015. Two sectors, electricity and heavy industry, registered a noticeable decrease of GHG emissions.  In particular, emissions in electricity generation were cut significantly, mostly driven by the phase-out of coal-fired electricity generation in Ontario. Federal regulations to phase-out traditional coal-fired electricity generation, currently being amended to accelerate phase-out by 2030, will further decrease emissions in the sector. Some energy-intensive industries became more energy efficient, especially iron, steel, pulp and paper. However, this was offset by emissions growth in the oil and gas sector and in domestic transportation, which produced respectively 26% and 24% of Canada’s GHG emissions in 2015.

If Canada is a heavy per capita emitter, it is not because of its electricity sector, which contributes only 11% of national GHG emissions, a relatively small share. In fact, Canada’s electricity mix is among the least carbon-intensive in the OECD, with 82% of electricity coming from non-emitting sources in 2015 – mostly hydro (60%) and nuclear (17%) – up from 73% in 2000. The share of renewables (excluding hydro) in Canada’s power generation sector actually increased from 1% to 6%, between 2000 and 2015, due to the expansion of the wind sector.

Let us look more carefully at the two largest emitting sectors:  oil and gas and transportation. Over the last decades, Canada has greatly increased its oil and gas production, mostly for export. In 2009, total crude oil and natural gas production was 57% higher than in 1990.  Moreover, the increase in oil production came from oil sands extraction (which produces more GHG emissions), while conventional oil production peaked in 1998. 14  In 1990, the oil sands industry had just got off the ground. Today, it is a significant sector to the Canadian economy;  “Oil production has been driven primarily by a rapid rise in the extraction of bitumen an synthetic crude oil from Canada’s oil sands operations, where total output has increased by 140% since 2005”. 15 

Transportation’s contribution to Canada’s GHG emissions is similar to oil and gas extraction and more than twice as much as electricity generation. GHG emissions from transport, on per capita basis, are the third highest of the OECD. 16  That is not a surprise, since “Canada generates more road and rail freight transport (measured by tonne-kilometers) both per unit GDP and per capita than almost any other country in the OECD”. 17  Canada’s dispersed settlement and low density urban structure is heavily dependent on transport, given the need to move people and goods over vast geographical distances.

The emissions growth linked to the transportation sector is not just the result of the increase in the number of vehicles and kilometres driven. Two other factors are at work. 18  First, many Canadians, for reasons of comfort and safety, have switched from cars to vans and light trucks, which are less fuel-efficient. This growing preference for sport utility vehicles and trucks is understandable in a country with long travelling distances and roads that can be quite dangerous in the winter. However, it has caused an additional rise in GHG emissions despite regulations in place. The other factor that has pushed transportation emissions higher is the increase in emissions from heavy, diesel-engine vehicles. The quantity of goods transported by trucks increased sharply, mainly as a result of free trade with the US, which began in the 1990s and favoured shipping goods by truck rather than train, because rail lines in Canada were built east-west, not north-south. 19 

In short, if Canada is a major per capita GHG emitter, and if its emissions have increased dramatically in the 1990s before levelling off since then, it is mainly because of two factors: oil and gas extraction, and transportation. Canada will need to reduce its emissions in these and other sectors to meet its 2030 target, including through measures outlined under the Pan-Canadian Framework.

2. The Pan-Canadian Framework on Clean Growth and Climate Change

Canada’s commitment is to reduce its GHG emissions by 30% from 2005 levels by 2030. We have seen (Annex 3) that in 2015, emissions were 2.2% below 2005 levels, a decrease of 16 megatonnes (Mt). To achieve the 30% reduction target for 2030, an average annual reduction of 1.7% would be needed. According the OECD “this is demanding in terms of reducing emissions intensity”.  20 The two most populous provinces, Ontario and Québec, have announced a tighter reduction target than the federal plan: 37% GHG reductions by 2030 compared with 1990.

Under the business as usual scenario – i.e. without any additional measures – Canada's annual GHG emissions, which in 2015 were 722 Mt, would reach 815 Mt in 2030, according to projections by Canada’s Ministry of Environment and Climate Change. Yet, in actuality, the target is to reduce them to 517 Mt by 2030. 

Until just over one year ago, Canada had no overarching pan-Canadian strategy or framework to reach this target. Climate policy had been driven largely by provinces. By mid-2017, the four most populous provinces, representing 86% of Canada’s population and 81% of emissions, had carbon pricing regimes in place. British Columbia has had a revenue neutral carbon tax since 2008, currently at 35 dollars per tonne in 2018, and increasing by 5 dollars per year; Quebec has had a cap-and-trade system since 2013, linked with California; Ontario established a cap-and-trade system in 2017, and together with California and Quebec signed an agreement linking their carbon markets; Alberta’s system involves emission intensity targets for major emitters, a cap on GHG emissions of 100 million tonnes from oil sands, offset trading, and, for the other sectors of the economy, a wide carbon levy of 30 dollars per tonne in 2018, with a rebate for low-and-middle-income households.

The Alberta plan in particular is praised by the OECD: “In this challenging context, the province has become one of the first fossil-fuel based economies in the world to implement ambitious carbon pricing”. 21 

Canada is a decentralized federation whose Constitution gives the provinces wide-ranging responsibilities, including in the area of environmental policy, energy policy and natural resources management. Moreover, the relationship with Indigenous peoples is an important element of Canada’s institutional framework and of particular importance to Canada’s current government. To be effective, a climate change plan cannot be merely federal or provincial and territorial; it must join together all the partners of the federation.

Discussions between the federal, provincial and territorial governments resulted, in December 2016, in the Pan-Canadian Framework on Clean Growth and Climate Change. 22   The federal government and 12 of the 13 provinces and territories have adopted this Pan-Canadian Framework, which not only sets the framework for implementing GHG emission policies to achieve or exceed a 30% reduction from 2005 levels by 2030, but also reviews respective targets over time, so as to achieve more substantial reductions, in accordance with the Paris Agreement.

The federal initiatives cover all the essentials: accelerated phasing out of coal-fired power plants, a new standard for the use of biofuels, strict regulation of emissions of short-lived climate pollutants such as methane, hydrofluorocarbons and black carbon, zero energy-ready building codes, increased carbon storage in forests and agriculture lands, and major investments in clean technology, low carbon economy, green infrastructure, urban transit development, zero-emission vehicles deployment, and adaptation initiatives.

The Pan-Canadian Framework also calls for the establishment of systems for carbon pricing across Canada, with a benchmark set by the federal government. It gives provinces and territories flexibility to implement the type of system that makes sense for their circumstances – either an explicit price-based system (such as a carbon tax or carbon charge and performance-based emissions system) or cap-and-trade.  As part of the benchmark, the federal government also committed to implement a federal carbon pricing backstop that will apply in any province or territory that requests it or that does not have a carbon pricing system in place in 2018 that meets the benchmark. For explicit price-based systems, the minimum price starts at $10/tonne in 2018, rising $10/year to $50/tonne in 2022. In January, Canada’s Environment and Finance ministers released draft legislative proposals relating to the proposed federal carbon pricing system for public comment. 23 

On the international scene, Canada has undertaken to provide $2.65 billion to support the poorest and most vulnerable countries and played a positive role for the conclusion of the Paris Agreement.  Canada launched the Powering Past Coal Alliance and is active in the Climate and Clean Air Coalition, the Artic Council Expert Group on Black Carbon and Methane, the Global Methane Initiative and the Carbon Pricing Leadership Coalition. “Working together on climate change, oceans and clean energy” figure among the five themes of the 2018 G7 Summit, to be hosted under Canada’s presidency, in June, in Charlevoix, Quebec.

The Canada and European Union Comprehensive Economic and Trade Agreement (CETA) includes a trade and environment chapter. CETA will support the EU and Canada in their efforts to pull together their ability to innovate and to promote and spread their environmental innovations and best practices in addressing climate change.

With specific measures from the Pan-Canadian Framework on Clean Growth and Climate Change, the federal government foresees that emissions should be reduced to 583 Mt by 2030. It will therefore be necessary to find 66 Mt of additional reductions to reach the Paris target of 517 Mt (see Annex 5).To this end, the federal government plans to implement additional measures with the provinces in areas of clean technologies, public transit, innovation and carbon sequestration. Current projections do not include potential new actions taken by Canadian governments between now and 2030.

For me this national climate framework is well overdue. But since I am a Canadian Ambassador and Special Envoy, I may be suspect to partiality. So, consider instead the OECD comprehensive review of this plan.  It touts it, as “a well thought-out strategy”  24  and holds the view that “the federal government elected in 2015 established ambitious environmental goals and injected new momentum”. 25 

The OECD points out that “putting in place Canada-wide pricing, a key pillar of the framework, will be essential”. 26  Noting that carbon pricing would apply to between 70-80% of total emissions, the OECD observes that “this is a higher share than under the European Union Emissions Trading System, for example”. 27 

At a time where the US administration not only intends to withdraw from the Paris Agreement, but also terminate the US Clean Power Plan, some claim that going ahead with the Pan-Canadian Framework would damage the Canadian economy. But the OECD sees in this Framework an occasion to strengthen the Canadian economy: “Carbon pricing and new procurement policies will help boost demand for eco-innovations in Canada, while a new emphasis on public investment in research and development (R&D) and skills should help increase supply”. 28  Expanding carbon pricing, clean technology and major infrastructure investments are important signals that “promise to boost innovation and domestic demand for cleaner products and environmental services”. 29 

The announcement well in advance that the price will rise to 50 dollars in 2022 will provide certainty for investors and project developers: “Not many countries have yet made such a step”. 30  Carbon pricing is a valuable economic policy, especially considering that, presently, revenues from environmentally related taxes are only 1.1% of GDP, the third lowest share in the OECD. 31  Similarly, the investments in R&D and clean technology must reverse a trend where “Canada’s share of the global clean technology market shrank from 2.2% to 1.3% over 2005-14”  32  and a situation where “the share of energy-related R&D supporting renewable energy and energy efficiency is among the lowest in the OECD (…) On a per capita basis, Canada files far fewer green patents than leading OECD member countries”. 33 

Also, with this plan, Canada will be in a better situation to take advantage of some of its economic strengths. For example, the country is becoming a leader in large-scale carbon capture and storage pilots, hosting two of the world’s first large-scale facilities –  the Quest project in Alberta and the Boundary Dam power station in Saskatchewan – the latter being the  world’s first commercial carbon capture application to a coal-fired power plant.

The Pan-Canadian Framework on Clean Growth and Climate Change is truly, as its title indicates, about climate but also about clean growth.

Conclusion

Working to decrease its GHG emissions, Canada can legitimately point to extenuating circumstances: a cold climate, vast distances, strong economic and demographic growth, intensive natural resource and hydrocarbon extraction, deep economic integration with the U.S. and a very exceptional geographical concentration of emissions. Everybody may understand that a transport truck hauling a heavy load from Halifax to Vancouver will obviously emit substantially more GHG emissions than one travelling from Milan to Naples. However, Canada has put in place a clean growth and climate plan that will drive down emissions, despite its national circumstances.

The world expects all developed countries to significantly reduce their emissions, not only in relative intensity, but also in absolute terms. If they do not, emerging and developing countries cannot be expected to do their part. Then, an increase of 2°C would be reached, causing serious consequences for all countries, including Canada, whose natural environment is particularly vulnerable to climate disruptions.

We cannot let such consequences unfold.  Humanity must be protected against the dangers of global warming to 2ºC or more. Canada will do its part, acting in the world and with the world. Canada has given itself a plan: The Pan-Canadian Framework on Clean Growth and Climate Change. This plan is being  implemented, with substantial progress being made in year one, including new tools, programs, regulations  and funding to deliver on our 2030 climate target. Canada must honor or surpass its Paris commitment and, in doing so, must invent, implement and export sustainable development solutions throughout the world. Canada must succeed.

 



 1  Environment and Climate Change Canada, Canada and the UK launch a global alliance to phase out coal electricity,  November 16, 2017, https://www.canada.ca/en/environment-climate-change/news/2017/11/canada_calls_foraglobalalliancetophaseoutcoalelectricity.html.

 2  UK Department for Business, Energy & Industrial Strategy, Policy paper: Clean Growth Strategy, October 12, 2017, https://www.gov.uk/government/publications/clean-growth-strategy.

 3  Government of Canada, Environment and Climate Change Canada. Pan-Canadian Framework on Clean Growth and Climate Change: Canada’s plan to address climate change, 2016, 978-0-660-07024-7, https://www.canada.ca/en/services/environment/weather/climatechange/pan-canadian-framework/climate-change-plan.html

 4  Government of Canada, Moving Forward on Climate Change: A Plan for Honouring our Kyoto Commitment, 2005, http://webarchive.bac-lac.gc.ca:8080/wayback/20060202163923/http:/www.climatechange.gc.ca/kyoto_commitments/report_e.pdf.

 5  UNEP (2017). The Emissions Gap Report 2017. United Nations Environment Program (UNEP),Nairobi, https://www.unenvironment.org/resources/emissions-gap-report.

 6  Climate Action Tracker Partners. CAT Warming Projections: Global Update 2017, Climate Action Tracker. 2017, http://climateactiontracker.org/.

 7  Climate Action Tracker Partners. Rating Countries, Climate Action Tracker. 2017, http://climateactiontracker.org/countries.html.

 8  OECD (2017), OECD Environmental Performance Reviews: Canada 2017, OECD Publishing, Paris.http://dx.doi.org/10.1787/9789264279612-en, pg. 64.

 9  Ibid.

 10  Ibid., pg. 159.

 11  James K. Boyce and Riddle, Matthew E., Cap and Dividend: A State-by-State Analysis, Political Economy Research Institute, University of Massachusetts, Amherst & Economics for Equity and the Environment Network, August 2009, https://www.peri.umass.edu/fileadmin/pdf/other_publication_types/green_economics/CapDividend_PERI.PDF">  ; Macdonald, Douglas et al., Allocating Canadian Greenhouse Gas Emission Reductions Amongst Sources and Provinces: Learning from the European Union, Australia and Germany, University of Toronto, April 2013, https://www.researchgate.net/profile/David_Gordon18/publication/271850017_Allocating_Canadian_Greenhouse_Gas_Emissions_Reductions_Amongst_Sources_and_Provinces_Learning_from_the_European_Union_Australia_and_Germany/links/54d4e0c30cf25013d02a1536/Allocating-Canadian-Greenhouse-Gas-Emissions-Reductions-Amongst-Sources-and-Provinces-Learning-from-the-European-Union-Australia-and-Germany.pdf, pg. 30, 59.

 12  OECD, Greenhouse gas emissions, OECD,

https://stats.oecd.org/Index.aspx?DataSetCode=AIR_GHG

 13  OECD (2017), OECD Environmental Performance Reviews: Canada 2017, OECD Publishing, Paris.

http://dx.doi.org/10.1787/9789264279612-en, pg. 62.

 14  Environment Canada, National Inventory Report : Greenhouse Gas Sources and Sinks in Canada 1990-2009, The Canadian Government’s Submission to the UN Framework Convention on Climate Change, 2011, http://publications.gc.ca/collections/collection_2011/ec/En81-4-2009-1-eng.pdf, http://publications.gc.ca/collections/collection_2011/ec/En81-4-2009-2-eng.pdf, http://publications.gc.ca/collections/collection_2011/ec/En81-4-2009-3-eng.pdf

 15  Government of Canada, Environment and Climate Change Canada, Canada’s Seventh National   Communication on Climate Change and Third Biennial Report—Actions to meet commitments under the United Nations Framework Convention on Climate Change, 2017, http://unfccc.int/files/national_reports/national_communications_and_biennial_reports/application/pdf/82051493_canada-nc7-br3-1-5108_eccc_can7thncomm3rdbi-report_en_04_web.pdf, pg. 39.

 16  OECD (2017), OECD Environmental Performance Reviews :Canada 2017, OECD Publishing, Paris.

http://dx.doi.org/10.1787/9789264279612-en, pg. 61.

 17  Ibid., 180.

 18  Government of Canada, Environment and Climate Change Canada, Canada’s Seventh National   Communication on Climate Change and Third Biennial Report—Actions to meet commitments under the United Nations Framework Convention on Climate Change, 2017, http://unfccc.int/files/national_reports/national_communications_and_biennial_reports/application/pdf/82051493_canada-nc7-br3-1-5108_eccc_can7thncomm3rdbi-report_en_04_web.pdf, pg. 22.

 19  Environment Canada, National Inventory Report : Greenhouse Gas Sources and Sinks in Canada 1990-2009, The Canadian Government’s Submission to the UN Framework Convention on Climate Change, 2011, http://publications.gc.ca/collections/collection_2011/ec/En81-4-2009-1-eng.pdf, http://publications.gc.ca/collections/collection_2011/ec/En81-4-2009-2-eng.pdf, http://publications.gc.ca/collections/collection_2011/ec/En81-4-2009-3-eng.pdf

 20  OECD (2017), OECD Environmental Performance Reviews :Canada 2017, OECD Publishing, Paris.

http://dx.doi.org/10.1787/9789264279612-en, pg. 20.

 21  Ibid., pg. 139.

 22  Government of Canada, Environment and Climate Change Canada. Pan-Canadian Framework on Clean Growth and Climate Change: Canada’s plan to address climate change, 2016, 978-0-660-07024-7, https://www.canada.ca/en/services/environment/weather/climatechange/pan-canadian-framework/climate-change-plan.html.

 23  Government of Canada, Environment and Climate Change Canada. Annex I: Federal investments and measures to support the transition to a low-carbon economy, 2016, 978-0-660-07024-7,             https://www.canada.ca/en/services/environment/weather/climatechange/pan-canadian-framework/annex-federal-investments-measures.html.

 24  OECD (2017), OECD Environmental Performance Reviews :Canada 2017, OECD Publishing, Paris,

http://dx.doi.org/10.1787/9789264279612-en, pg. 38.

 25  Ibid., 20.

 26  Ibid., 22.

 27  Ibid., 39.

 28  Ibid., 133.

 29  Ibid., 15.

 30  Ibid., 39.

 31  Ibid., 31.

 32  Ibid., 133.

 33  Ibid., 33.

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