Canada’s Greenhouse Gas Emissions: Developments, Prospects and Reductions

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On July 5th 2016 an update was posted to help clarify the footnotes of Table A-1 of Appendix A

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Canada has adopted a target for greenhouse gas (GHG) emissions in 2030 of 30 per cent below the level of 2005. To achieve that, significant changes will have to occur to make the economy less GHG-intensive. The federal government has adopted measures to reduce emissions in electricity generation and transport. As well, a number of provincial governments such as Alberta, British Columbia, Quebec and Manitoba, have put in place moderate measures to limit emissions, while others have announced programs. Those measures, while substantial, are unlikely to achieve the target on their own. Deeper reductions will be needed.

The technologies to achieve the target are mostly ready, so the impact will likely not significantly alter Canadian lifestyles. Indeed, with some technologies, fossil-fuels will continue to be used, but their emissions will be curtailed.

The needed changes will, however, necessarily impact on the economy since non-GHG sources of energy are currently more costly than cheap coal, natural gas or even oil products. The estimate used in the PBO report indicates that incomes could be reduced by between 1 and 3 per cent, relative to where PBO projects they would otherwise be. 

These estimates are averages for all sectors and regions. The outcomes for individual sectors and regions will be highly diverse since there is considerable variation in current sources of emissions.

This also highlights that there are significant risks in a large-scale move to lower emissions. Two aspects where the risk is manifest are: (1) a patchwork of abatement programs across different sectors and regions may lead to unnecessarily high costs; and (2) regional disparity in impacts which could affect a pan-Canadian effort. Moreover, existing measures such as the coal regulation and future auto-efficiency improvements have implicit carbon-prices associated with them; introducing new measures such as carbon taxes without properly accounting for them will increase overall costs since sectors affected by those regulations will have compounded costs.