2024 Oil & Gas Emissions Cap POLICY TOOLKIT – 5b. The Cap Proposed by the Framework Will Make It Almost Impossible to Meet Our Canada-Wide 2030 Target

Oil & Gas Cap Policy Toolkit​

5. The Problems With The Framework

Toolkit Contents

  1. EXECUTIVE SUMMARY
  2. BACKGROUND – THE OIL & GAS SECTOR GHG EMISSIONS PROBLEM
    1. Production Emissions
    2. Consumption Emissions
  3. BACKGROUND – A TRICKY JURISDICTIONAL BALANCE
  4. HOW THE O&G EMISSIONS CAP WORKS
    1. Scope of Application
      1. Covered Facilities
      2. Covered Activities
      3. Covered Greenhouse Gasses (GHGs)
    2. The Emissions Cap Level: The Starting Point
    3. The Legal Upper Bound: How Much Can Really Be Emitted
  5. THE PROBLEMS WITH THE FRAMEWORK
    1. The 2030 Cap Level Is Not Ambitious Enough – The Numbers
    2. The Cap Proposed by the Framework Will Make It Almost Impossible to Meet Our Canada-Wide 2030 Target
    3. The Framework’s O&G Emissions Cap Will Do Less Work Than It Appears
    4. The O&G Emissions Cap Has Effectively Been Dictated by the Oil and Gas Producers
    5. The Oil and Gas Industry’s Re-investments to Reduce Emissions Has Been Contemptible
    6. The O&G Emissions Cap is based on O&G Production Increasing by 2030
    7. The “Other Compliance Units” Are Mostly a Very Bad Idea
  6. COMPLIANCE FLEXIBILITIES
    1. Emissions Trading
    2. Multi-Year Compliance Periods
    3. Banking of Emissions Allowances
    4. Making Contributions to a Decarbonization Fund
    5. Domestic Offset Credits
    6. Internationally Transferred Mitigation Outcomes (ITMOs)
    7. Delayed Reporting and Verification
  7. SUGGESTED RESPONSES TO THE FRAMEWORK’S DISCUSSION QUESTIONS
  8. I DON’T HAVE TIME TO READ THIS LONG DOCUMENT. WHAT SUBMISSIONS SHOULD I CONSIDER MAKING?
  9. ACRONYMS & GLOSSARY

b. The Cap Proposed by the Framework Will Make It Almost Impossible to Meet Our Canada-Wide 2030 Target

According to Canada’s latest National Inventory Report, which is the annual inventory of all of Canada’s GHG emissions, Canada’s GHG emissions for 2005 were 732 Mt. [50] Our promise under the Paris Agreement, called Canada’s 2030 Target, and enacted in statute in the Canadian Net-Zero Emissions Accountability Act [51] was to reduce 2005 emissions by 40 to 45% by 2030. [52]

 Forty percent of 732 Mt is 293 Mt.

 732 Mt
-293 Mt
 439 Mt

(This is often rounded up to 440 Mt for practical purposes.  For example the Canadian Climate Institute has an ongoing project called “440 Megatonnes”.) [53]

 Forty-five percent of 732 Mt is 329 Mt.

 732 Mt
-329 Mt
 403 Mt

With the 47 Mt reduction “miss” that the Framework is proposing over what the ERP said Canada could do by 2030, it is hard to see how Canada can achieve our 2030 emissions reduction target. Remember, the O&G sector is the largest source of emissions in Canada.

Indeed, when ECCC released the 2023 Progress Report on the 2030 Emissions Reduction Plan (the “Progress Report”) in December of 2023, it estimated that Canada is going to emit 467 Mt of GHGs in 2030. [54] That is a miss of 28 Mt from the 40% low end of the target and a miss of 64 Mt from the 45% high end of the target.

The Canadian Climate Institute performed an independent assessment of the Progress Report.  According to their assessment, 2030 emissions for all sources in Canada are projected to be between 467 Mt and 482 Mt. [55]  That is a miss of between 28 and 43 Mt of the more lenient 40% reduction target target and a miss of between 64 and 79 Mt of the more stringent 45% reduction target.

Recommendations:

Tell the federal government (using references to the Framework and to any papers we cite here, as you may wish):

• To ensure Canada can meet our emissions reduction targets, the “compliance flexibility” allowing fossil fuel companies to pay to emit 25 Mt per year over and above the cap must be eliminated. Another way to put it is that the legal upper bound for emissions should be the same amount as the emissions cap.

• The legal upper bound for oil and gas sector emissions in 2030 should be no more than the 110 Mt promised in the Emissions Reduction Plan.

• Downstream pipelines and refineries, which account for 20 Mt of emissions annually, should be included under the emissions cap, as originally envisioned.

Citations
  1.  Environment and Climate Change Canada, National Inventory Report 1990-2021:  Greenhouse Gases Sources and Sinks in Canada – Canada’s submission to the United Nations Framework Convention on Climate Change – Executive Summary [Hereinafter “National Inventory Report 2021 ES”), p. 14, Table ES-2.  Retrieved on 1 January 2024 from https://publications.gc.ca/site/eng/9.816345/publication.html
  2.  s. 7(2) Canadian Net-Zero Emissions Accountability Act, S.C. 2021, c. 22.  Retrieved on 1 January 2024 from https://laws-lois.justice.gc.ca/eng/acts/c-19.3/fulltext.html
  3.  NIR 2021 ES, p. 2.
  4.  Retrieved on 1 January 2024 from https://440megatonnes.ca/
  5.  Environment and Climate Change Canada, 2023 Progress Report on the 2030 Emissions Reduction Plan, December 2023.  Retrieved on 11 January 2024 from https://www.canada.ca/en/services/environment/weather/climatechange/climate-plan/climate-plan-overview/emissions-reduction-2030/2023-progress-report.html
  6.  Dave Sawyer et. al, Independent Assessment of Canada’s 2023 Emissions Reduction Plan Progress Report, December 2023.  p. 5.  Retrieved on 11 January 2024 from https://climateinstitute.ca/news/independent-assessment/