2024 Oil & Gas Emissions Cap POLICY TOOLKIT – 5g. The “Other Compliance Units” Are Mostly a Very Bad Idea

Oil & Gas Cap Policy Toolkit​

5. The Problems With The Framework

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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

g. The “Other Compliance Units” Are Mostly a Very Bad Idea

Of the 137 Mt of annual emissions that the Framework proposes to allow under the O&G Emissions Cap, 25 Mt, or 18% of them, are permitted by way of “other compliance units”.

It is proposed that in addition to emissions trading, multi-year compliance periods, and credit banking, facilities have the option to remit domestic offset credits or make contributions to a decarbonization funding program to cover a limited portion of their GHG emissions.  Consideration is also being given to allowing facilities to remit compliance units that represent mitigation outcomes that have been authorized for use by Canada as internationally transferred mitigation outcomes (ITMOs) to cover a portion of their GHG emissions. [72]

Not all “other compliance units” are equal, and they are considered separately below.

 
Citations
  1.  Framework, p. 7.