Oil and gas production in Alberta and Saskatchewan accounts for nearly half of Canada’s climate-upsetting greenhouse gas emissions, and until the country gets serious about reducing them, it won’t meet its climate goals, the Organization for Economic Co-operation and Development (OECD) says after examining the country’s climate and environmental performance.
“Without a drastic decrease in the emissions intensity of the oilsands industry, the projected increase in oil production may seriously risk the achievement of Canada’s climate mitigation targets,” the OECD warns. “Canada is the fourth-largest emitter of greenhouse gasses in the OECD [in absolute terms], and emissions show no sign of falling yet.”
In fact, by the OECD’s figures, Canada’s emissions have fallen 1.5% in the 13 years since the international economic think tank last looked in detail at the country’s natural security—but that drop was less than a third the rate for the OECD’s 35 member economies, CBC News reports. And Canada is not currently on track to meet its commitment to reduce its greenhouse gas emissions by 30% from 2005 levels by 2030.
The root of the problem is the continuing energy intensity of Canada’s economy. “For every US$1,000 in GDP created in Canada, this country uses 62% more energy and produces 44% more carbon emissions than the OECD average,” the Canadian Press notes.
While emissions have been ratcheted down in most provinces, they have soared in oil-producing provinces, rising 18% in Alberta and roughly 7.5% in Saskatchewan. Alberta alone is now responsible for 38% of Canada’s emissions, “reflecting [its] large, energy-intensive extraction industry, notably the oil sands,” which continues to expand.
Ontario, with more than a third of the Canadian population, was the country’s second-largest generator of greenhouse emissions, but also led the country in reductions, largely through its abandonment of coal-fired power generation.
Overall, fully “half of Canada’s emissions now come from the oil and gas industry (26%) and the transport sector (24%),” CBC News reports, citing the OECD.
The organization blames perverse Canadian tax incentives for some of that: “Petrol and diesel taxes for road use are among the lowest in the OECD, fossil fuels used for electricity and heating remain untaxed or taxed at low rates in most jurisdictions, and the federal excise tax on fuel-inefficient vehicles is an ineffective incentive to purchase low-emission vehicles.”
And while the OECD generally approves of the establishment of a national carbon price floor in the Pan-Canadian Framework for Clean Growth and Climate Change, it questions how effectively Canada’s awkward federal-provincial jurisdictional dance will meet its goals.
One problem is the Framework’s incomplete scope. “Under current plans, the carbon price would apply to between 70 to 80% of total emissions,” the report says, but “the long-term ambition should be to ensure no significant emitters are exempt.” The OECD also urges the government to clarify how the national floor price will be revised after 2022, when it reaches the current target for that year of $50 a tonne.
Meanwhile, according to the 228-page report, “a lot of work is going to be required to figure out how to measure provincial cap-and-trade systems against the federal benchmarks,” CP writes. “The existing provincial plans have many variants, including price and what products the price is charged on. [The OECD] expects those variations ‘may eventually create frictions and pressures’ for the different provincial systems to merge.”
And to meet its Paris commitments, as CBC put it, Canada will need to “better align its national energy policy and oilsands production with its climate change and environmental policies.”