Summary of Recommendations

• Recommendation 1: ECCC should consider using auctions to distribute emission allowances after the first two compliance periods.
• Recommendation 2: Tell ECCC that it is good that they are making these regulations, because it appears to be the only way to reduce Canada’s GHG emissions from oil and gas production.
• Recommendation 3: If you want, consider expressing your disappointment that it has taken them so long to do this.
• Recommendation 4: Tell ECCC that the emissions cap established by the emissions allowances, the Canadian domestic offset credits, and Decarbonization fund is simply too high.  It will do almost nothing to achieve Canada’s 2030 emissions reduction target.
• Recommendation 5: Tell ECCC that it is not fair to require other industries and Canadian citizens to do as much as is required of them to achieve Canada’s 2030 emissions reduction target if so little will be required from Canada’s oil and gas industry.
• Recommendation 6: Tell the federal government that:
  • Offsets do nothing to meet the objective of the Draft Regs to reduce GHG emissions from oil and gas production, which is Canada’s largest single source of GHG emissions.
  • Offsets do not work. They create almost no emissions reductions in the real world.
  • Offsets are linked to human rights abuses and greenwashing, and the federal government should not promote their use.
  • It’s not fair to allow oil and gas companies to pay to keep polluting rather than doing their part to reduce Canada’s GHG emissions. 
• Recommendation 7: Tell the federal government to:
  • Eliminate the use of offset credits in the cap-and-trade system and force companies to directly reduce GHG emissions from oil and gas production instead.
  • If offsets are not eliminated, reduce the percentage of a facility’s allowable emissions that could be covered by offset credits and/or allow these offsets only in the first two compliance periods of the cap-and-trade system (2030-2032, 2033-2035).
  • If offsets are not eliminated, develop a credible system to confirm with certainty that offset projects have permanently removed or prevented the promised GHG emissions beyond what would have resulted if the offset had not been purchased.
• Recommendation 8: Tell the Federal Government that:
  • Contributions to the decarbonization fund would go to the oil and gas industry to help them reduce GHG emissions. This “double dipping” is absurd, giving the industry credit for the same funds twice under the cap:  Once when they pay to pollute and a second time when they use the money they paid in to try to reduce their emissions.
  • In November 2021, the Auditor General released a report outlining how, when the federal government tried to design and implement an emissions reduction fund, it failed badly. Since ECCC seems intent on trying it again, they should not repeat the same mistakes. 
  • The decarbonization fund should be eliminated, or at the very least the funds should be given to organizations with a proven track record of reducing GHG emissions rather than the O&G industry.
• Recommendation 9: Tell the federal government:
  • Not to include ITMOs as a compliance flexibility option for the Oil and Gas Emissions Cap.
  • ITMOs are an even less effective instrument than domestic offsets and do nothing to accomplish the Framework’s objective to reduce GHG emissions from the oil and gas sector.
  • that the Paris Agreement, which created ITMOs, states they are intended “to allow for higher ambition in their mitigation and adaptation actions and to promote sustainable development and environmental integrity”, not to create an excuse to permit emissions in any given industrial centre.
  • If ITMOs are included as part of the Oil and Gas Emissions Cap, the federal government must manage the transactions in order to avoid the emission reductions being “double counted” in both Canada and the foreign country.  
• Recommendation 10: Citing some of the facts and information above (and any other research you want to do), and using your own words, consider making submissions to the online public consultation similar to these:
  • From recent actions and statements by corporate leaders, there is a real risk that the oil and gas companies will act in their own self-interest and try to increase their 2026 production (and emissions) as much as possible, to make the cap based on 2026 emissions as high as possible, and to obtain for themselves the largest possible share of emissions allowances.
  • To mitigate against this risk, the final regulations should contain a clause to the effect that, if the Minister determines that the 2026 oil and gas production emissions are significantly higher that the current 2026 estimate of 156.6 Mt, the Minister may set a lower basis for the production emissions cap.