How oil sands undermine Canada’s local weather objectives
Posted on 21 February 2024 by dana1981
This can be a re-post from Yale Local weather Connections
Now in his ninth 12 months as prime minister, Justin Trudeau has sought to place Canada as a world local weather chief, touting one of many world’s highest taxes on carbon air pollution, clear gasoline laws, and clear expertise tax credit. But Canada’s per-person local weather air pollution stays stubbornly close to the highest of the listing of developed international locations — alongside the US and Australia, whose governments have been much less persistently supportive of local weather options over the previous decade.
Local weather Motion Tracker, an impartial mission that displays whether or not governments’ actions measure as much as the objectives outlined within the Paris local weather settlement, charges Canada’s local weather insurance policies as “extremely inadequate.” The mission famous, “If all international locations have been to observe Canada’s method, warming may attain over 3°C and as much as 4°C” — a doubtlessly catastrophic stage of world warming. The Trudeau authorities has pledged to chop emissions by a minimum of 40-45% beneath 2005 ranges by 2030 however isn’t on monitor to satisfy that aim.
This raises the query: What’s holding again Canada’s local weather ambitions? Though there are quite a few contributing components, Local weather Motion Tracker factors to 1 main wrongdoer, arguing that “Canada appears incapable of kicking its oil and gasoline dependancy.” Canada is the fourth-largest producer of oil and the fifth-largest producer of methane gasoline, generally referred to as pure gasoline, on the planet. Practically 80% of Canadian oil is exported to the US, and fossil fuels account for over one-fifth of the nation’s exports, value over $100 billion per 12 months.
So the nation exemplifies the problem of fixing the local weather disaster even when comparatively climate-aware governments are in energy.
Why Canada’s local weather progress is caught within the oil sands
The oil and gasoline {industry} is the most important supply of Canadian local weather air pollution, at 28% of the nation’s complete emissions. That’s up from a 17% share in 1990 and 23% in 2005.
Canadian greenhouse gasoline emissions by sector. Supply: Authorities of Canada.
An growing proportion of Canadian fossil fuels have come from the oil sands within the western province of Alberta. Oil sands are an unconventional supply of oil composed of a mixture of sand, clay, water, and bitumen, which is a dense type of petroleum just like asphalt. Due to the thickness of bitumen, it’s tough to extract and thus requires extra vitality and emissions of climate-warming gases than drilling for typical oil. Throughout their life cycle, emissions from oil sands are about 30% greater than from typical oil sources.
In keeping with an evaluation by the Pembina Institute vitality assume tank, the oil sands accounted for about one-quarter of all Canadian oil manufacturing in 2000, however their share has spiked to virtually two-thirds in the present day. Complete oil sands manufacturing has quintupled over that time-frame, including almost $55 billion extra to Canada’s financial system in the present day than in 2000.
Consequently, Canada extracts about thrice extra oil per particular person than the US, producing about 5 occasions extra oil-industry-related local weather air pollution per Canadian than the typical American — even supposing the U.S. has lately been setting quite a few oil manufacturing data.
To deal with this supply of emissions, the Canadian authorities plans to cap and cut back the quantity of local weather air pollution that its oil and gasoline {industry} is allowed to generate. The Pembina Institute mentioned in a report that oil sands extractors plan to realize these emissions reductions by deploying applied sciences like small nuclear reactors and carbon seize and storage, however “many of those rising applied sciences are but to be commercialized.”
Nonetheless, Janetta McKenzie, appearing director of the Pembina Institute’s Oil and Fuel program, says that the {industry} may obtain the wanted emissions cuts.
“Oil sands producers can cut back methane for comparatively low prices, plus put money into different options, like carbon seize and enhancements in solvent use to cut back the quantity of steam wanted,” McKenzie wrote in an e mail. “Electrification of upstream processes can be an answer to cut back emissions within the sector.”
How carbon pricing works in Canada
Canada’s broadest local weather coverage is its Greenhouse Fuel Air pollution Pricing Act. Handed in 2018, the legislation imposed a value on carbon air pollution that will increase over time. Whereas this coverage financially penalizes emissions from most sectors of the financial system, the most important sources of Canadian local weather air pollution come from industries the place a carbon value tends to not work very successfully.
Oil and gasoline are globally traded commodities, and almost 100 international locations produce fossil fuels. Consequently, declines in Canadian oil manufacturing may merely get replaced by elevated drilling in different international locations. For that reason, the Trudeau authorities structured its carbon pricing system to refund about 80% of local weather air pollution charges paid by “emissions-intensive and trade-exposed” industries like oil and gasoline, in order that they don’t face an obstacle on the worldwide market. The carbon value does incentivize oil firms to generate decrease emissions than their rivals in Canada, and the quantity of carbon generated by producing a barrel of Canadian oil has declined in recent times as a result of improved effectivity. However the existence of the {industry} rebate and world fossil gasoline market blunt the carbon value’s effectiveness at spurring oil and gasoline emissions cuts.
Transportation is Canada’s second-largest supply of carbon air pollution, accounting for 22% of the nation’s emissions. The carbon value provides about U.S. $0.50 to the price of a gallon of gasoline in the present day. However for the reason that COVID pandemic emerged and snarled provide chains, Canadian gasoline costs have various wildly between about $2.20 and $6.00 per gallon (USD). This instability in gasoline costs has far more of an impact on drivers’ habits than the carbon tax.
Carbon pricing is only at lowering energy sector emissions, the place photo voltaic and wind vitality present a clear and inexpensive different to fossil fuels. However Canada already generated 60% of its energy from hydroelectricity in 2005. With the substitute of coal with cheaper and cleaner energy sources having lower that sector’s emissions in half over the previous 15 years, electrical energy is now answerable for lower than 8% of Canadian carbon air pollution.
The carbon value has additionally been applied throughout a time of quickly rising inflation and prices of dwelling. The coverage was designed to blunt monetary impacts on Canadians, returning about 90% of the income again to households. Immediately, about 80% of Canadians get extra money again in rebates than they pay in elevated prices as a result of carbon value. Solely these with the most important carbon footprints — who most often are the wealthiest Canadians — expertise a web value from the coverage.
However the carbon value rebates are opaque, normally coming within the type of quarterly direct financial institution deposits that don’t specify their supply. In keeping with a latest survey, 37% of Canadians don’t assume or aren’t positive if they’ve obtained a carbon tax rebate, and solely 14% assume the refund exceeds their carbon prices. What’s extra, the Trudeau authorities lately exempted dwelling heating oil from the carbon tax, elevating doubts concerning the coverage and in the end making it tougher to cut back the 13% of Canadian carbon emissions that come from the constructing sector. And so the recognition of Canada’s carbon value coverage has declined from 56% in 2021 to 45% in 2023. The conservative political opposition has launched an “ax the tax” marketing campaign, copying the slogan from the Australian effort that efficiently repealed that nation’s short-lived carbon value a decade in the past. (Thus far the Conservatives maintain a big lead over Trudeau’s Liberal occasion in latest polling, though the following Canadian federal election isn’t scheduled till October 2025.)
For now, the Canadian authorities has estimated that the nationwide carbon value, which is able to rise from CA$65 per ton of carbon dioxide in the present day to CA$170 per ton in 2030, will obtain about 30% of the emissions cuts wanted to satisfy its Paris dedication by that date.
Nonetheless, the query stays …
Can Canada meet its local weather objectives?
The Trudeau administration has handed and proposed a wide range of further local weather insurance policies to assist attain net-zero emissions by 2050. These embrace the aforementioned cap on oil and gasoline sector emissions, proposed laws on automobile emissions, a requirement that every one new automobiles bought in 2035 be zero-emissions like electrical automobiles and plug-in hybrids, and clear electrical energy laws for brand spanking new energy technology wanted to satisfy rising demand as different sectors like transportation and buildings go electrical.
In its 2023 emissions reductions plan progress report, the Canadian authorities estimated that the nation would lower its local weather air pollution to 36% beneath 2005 ranges by 2030 if all of its proposed local weather insurance policies are totally applied, lacking its pledge to chop emissions 40-45% over that time-frame. An impartial evaluation by the Canadian Local weather Institute equally concluded that implementing the federal government’s full suite of proposed local weather insurance policies would cut back emissions 34-36% by 2030, whereas the already-enacted laws would end in a 25% lower by 2030. The Trudeau authorities’s local weather insurance policies are making a distinction — the report estimates that with out them, Canadian local weather air pollution would have elevated 6% by 2030.
Canadian greenhouse gasoline emissions projections in a situation with no local weather insurance policies (crimson), primarily based on already-enacted laws (blue), and together with insurance policies in growth (yellow) and which were conceptually introduced (inexperienced) in comparison with authorities pledges (black) and a net-zero by 2050 pathway (grey). Supply: Canadian Local weather Institute.
In the end, though the Trudeau authorities has expressed ambitions to curb local weather change and is passing a collection of local weather insurance policies, the worldwide thirst for fossil gasoline and the nation’s home assets pose substantial roadblocks to these objectives. However with vitality specialists on the Worldwide Vitality Company and McKinsey predicting that world oil demand will peak by the tip of this decade, the world’s slaking thirst for oil could start to resolve Canada’s emissions problem.
Till then, regardless of the federal government’s ambitions, Canadians’ per-person local weather air pollution could stay stubbornly greater than most of their rich nation friends.