Explaining Canada’s Emissions Cap
Perhaps you’ve heard of the “Emissions Cap” proposed for the Canadian oil and gas industry – but what is it, why does it matter in the battle against climate change, and why is it such a politically sensitive issue? Here’s information that I hope will help clarify.
IF… the dream: If all vehicles were electric; if all buildings were heated electrically; and if all electricity came from non-emitting sources, then demand for oil and gas would all but disappear. That would forego the need for any emissions cap for the oil and gas sector, as there would be no market for its product. Call that climate change solved.
What it is: The emissions cap is a hard limit imposed by the federal government on emissions from the extracting, refining and transporting of oil and gas. Using 2019 emissions as a baseline, it requires that the oil and gas sector reduce its emissions by 35 per cent by 2030-32. (Long read here.) It’s important to note that the cap is on emissions, not on production.
Why it matters: The oil and gas sector is Canada’s single largest source of emissions, responsible for 30 per cent of all Canadian greenhouse gas emissions. Again, that’s for the extracting, refining and transporting only of oil and gas, not the burning of oil and gas.
Worth noting: Emissions from the burning of oil and gas are reflected in the emissions of other sectors such as transportation (all those cars, trucks, trains and planes); buildings (all that natural gas heating); and electricity (all those fossil fuel fired power plants)
How it will work: It’s complicated, but in simple terms, oil and gas companies (‘operators’) would each be given a 2030-32 emissions reduction target based on their 2026 emissions. They would be expected to use whatever technological means they could to reduce emissions and achieve that target; and if they are unable to achieve their target they can buy credits from other operators that have exceeded their targets.
About credits: The advantage of being able to buy credits (called ‘cap and trade’) is that it will encourage the easiest and least expensive emission reductions to happen first, which just makes economic sense. So a company that can reduce its emissions relatively easily and cheaply would have a reason to exceed its target and then sell credits for that extra to companies that have a harder time achieving their emissions targets.
How will those emission reductions be achieved: Currently, the easiest way to reduce emissions in the oil and gas sector is to reduce the escape of methane, a powerful greenhouse gas. (Ironically, methane is natural gas, which has a commercial value – so preventing it from escaping can be profitable too.) Another way is to electrify as much of the sector as possible (an example would be those big oilsands trucks) and get the electricity from clean sources. A third way is carbon capture and storage, a much more expensive and unproven technology.
Won’t that cap put the sector out of business? This is where the sensitivity and controversy come in! Clearly, climate change dictates that we can’t go on doing what we’re doing, and the ultimate solution is to reduce greenhouse gas emissions to zero as soon as possible. However, doing that overnight would have dire consequences for our economy and our civilization. So a middle path – creating conditions for a rapid but stable path toward zero emissions – is probably best. That’s what the emissions cap aims to achieve.
In the news:
Thanks to warming oceans, 84 per cent of the world’s coral reefs have been hit by the worst bleaching event on record.
If renewables and net-zero can work in the stringent environments of Nunavut and Edmonton, surely they can work anywhere!
A new survey confirms that nature is an even bigger part of our Canadian core identity than hockey or Medicare!!
Quotable:
“Let ours be a time remembered for the awakening of a new reverence for life, the firm resolve to achieve sustainability, the quickening of the struggle for justice and peace, and the joyful celebration of life.”
- Pope Francis, Paragraph 207, Laudato Si (Care For Our Common Home), 2015