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The Path Forward on Climate Change

April 12, 2016
Sheila Rao
Manager, How Canada Performs Program
Forecasting and Analysis

In the many years that we have been examining environmental performance under How Canada Performs, Canada has been a laggard, with fair to good performances on a few measures, but weak performances on most, and a poor showing overall. On April 21st, we will release our latest Environment report, which looks at indicators related to air quality, natural resource management, energy, and greenhouse gas (GHG) emissions. Climate change is now being recognized globally as a threat that requires immediate action and is tied to energy consumption and GHG levels. It is no secret that Canada has a poor record when it comes to climate change. But are we finally making strides in the right direction?

COP to It—Poor Record on GHG Emissions

At the December United Nations Climate Change Conference, or “COP21,” an ambitious, albeit non-binding, target was set by the 195 participating countries: limit warming to well below 2°C above pre-industrial levels and pursue efforts to limit the increase to 1.5°C. This was a historic agreement, but it is only a starting point. Much needs to be done to achieve this goal. By one estimate, keeping global average temperatures within the 2°C limit will require that GHG emissions be reduced to net zero between 2080 and 2100. Canada has a long way to go. Since 1990, Canada has had the second-highest increase in GHG emissions among its peer countries. Part of this can be explained by population growth, but even if we look at GHG emissions per capita, Canada does poorly relative to its peers, with only a 7 per cent reduction in per capita emissions between 1990 and 2013.

A Leader in Low-Emitting Electricity, Thanks to Hydropower

One way to reduce our carbon output is to increase renewable energy’s share of total energy consumption and shift toward low-emitting sources of electricity. When it comes to electricity production, Canada does relatively well, with almost 80 per cent of the nation’s electricity generated from low-emitting power sources. This is thanks in large part to our abundance of freshwater sources—Canada is one of the largest producers of hydroelectric power in the world, and over half of the nation’s electricity comes from hydro plants. Nuclear power also plays a big role, generating over half of the power in Ontario. Neither source is ideal from an environmental perspective—hydro damming impacts wildlife, forests, and land; and nuclear power produces radioactive nuclear waste. But, from an emissions perspective, they are preferable to fossil fuel combustion, the third-largest source of electricity in Canada and the main source in three provinces: Alberta, Saskatchewan, and Nova Scotia. So, there is room for improvement—particularly in these three provinces, which need to transition away from high-emitting fossil fuels and toward better technologies and lower emitting sources of energy.

Transitioning to a Low-Carbon Economy—The Long Road Ahead

Electricity generation produces roughly 12 per cent of Canada’s GHG emissions, so reducing emissions from coal power plants, improving technologies, and/or increasing the use of renewable energy sources will help lower overall emissions. But it won’t be enough. In order to make meaningful emission reductions, Canada must target the largest sources—transportation (which alone accounts for 28 per cent of GHG emissions), and the mining and petroleum industries (which accounts for 23 per cent of emissions when fugitive emissions are included). Given that both transportation activity and resource extraction are critical to Canada’s economy, the challenge is finding solutions that help mitigate climate change, without sacrificing economic growth.

Canada is a highly energy-intensive economy because of its climate, vast geography, and industrial structure. Clearly, transitioning off high-GHG-emitting energy sources will be no easy feat, but it is not impossible. Carbon pricing—either through a carbon tax or under a cap and trade system—is an essential tool for reducing our carbon footprint, encouraging both energy conservation and technological innovation. A number of provinces have taken action or plan to do so in the near future. British Columbia is a leader on this front as the first jurisdiction in North America to introduce a carbon tax back in 2008. Alberta will be replacing its GHG levy on high-emission facilities with a broad-ranging carbon tax in 2017. Quebec has implemented a cap and trade system, and Ontario plans to also pursue the cap and trade approach.

Industry generates the lion’s share of GHG emissions in Canada. This doesn’t mean that more can’t be done at the household level. Further incentives to pursue renewable energy and energy-saving improvements, more stringent emissions standards on vehicles, the promoting of car sharing, and increased accessibility to, and optimization of, public transit routes are just some of the ways to encourage everyone to reduce emissions and be more energy efficient.

Ready, Set … Innovate!

Realistically, given the costs associated with today’s technologies, Canada will not be able to make the dramatic reductions in emissions necessary without incurring higher costs. Increased investment in renewable energy could lead to the development of better and/or more cost-effective solutions. And more investment in R&D overall, from both the public sector and businesses, is critical to the discovery of the breakthrough technologies and innovations needed to achieve significant reductions in GHG emissions. As we saw in our recent report card on innovation, however, we have a persistent weakness when it comes to business R&D investment, and public R&D as a share of GDP has actually fallen in Canada in recent years. On an encouraging note, the fundamental importance of R&D and innovation to tackling climate change is being acknowledged and we appear to be moving in the right direction. Canada recently agreed to participate in a global partnership entitled “Mission Innovation,” which aims to double investment in clean energy innovation over five years. So, there is growing momentum in the push toward becoming a low-carbon economy.

On April 21 we release the results of the latest How Canada Performs report on environmental performance. For the first time, we will be looking at how individual provinces fare, relative to advanced peer countries, on key environmental indicators. On May 16, report authors James Knowles and Sheila Rao will dig deeper into the results and answer questions about the Environment Report Card during a live webinar.


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