DUBAI — Rick Smith, President of the Canadian Climate Institute, comments on the federal government’s release of a regulatory framework for the oil and gas sector emissions cap, and the tabling of the 2023 Progress Report on Canada’s 2030 Emissions Reduction Plan (ERP):
On the oil and gas emissions cap framework:
“The approach to capping oil and gas emissions announced today is reasonable and necessary. These regulations should be finalized and implemented without further delay.
“Oil and gas production is the single biggest and fastest-growing source of greenhouse gas emissions in the country, and the stubborn rise in emissions from this sector is wiping out climate progress in other parts of the economy. Capping oil and gas emissions is a critical element of a package of policies that can ensure Canada meets its emissions reduction targets while supporting the competitiveness of the sector.
“Cap-and-trade is a proven, market-based way to encourage companies to take cost-effective steps to reduce their emissions over time. Alternative compliance options give the sector flexibility in meeting global demand while maintaining incentives to reduce emissions. This is a sensible approach, but the government needs to move faster—there’s no need to push off implementation to 2026 or later. We urge the government to quickly finalize important details, such as how methane would be measured and priced under the cap, how to ensure the cap-and-trade system does not weaken the price signal from the existing output-based carbon pricing system for heavy emitters, and how compliance flexibility will be structured. Getting those specifics right will help ensure the regulations can deliver the emissions reductions required to align with Canada’s climate goals.
“Our analysis confirms that a strong cap on oil and gas emissions is achievable and consistent with increasing oil production, subject to international demand. Industry can meet a significant share of the cap just by complying with newly announced methane regulations, using technologies that are widely available and comparatively cheap. The remainder of the cap can be achieved through a mix of measures, including carbon capture and storage, electrification, fuel switching, and energy efficiency.
“The oil and gas cap announced today will help the oil sands industry, in particular, deliver on its commitment to work toward net zero emissions by 2050. Over time, an increasingly stringent cap on oil and gas emissions can drive innovation to better position Canada’s energy sector to compete in global markets.”
On the 2023 Emissions Reduction Plan progress report:
“More than a year and a half after Canada’s first Emissions Reduction Plan was released, the government’s first progress report demonstrates real action, but acceleration is needed. How quickly the government completes the important policies that remain to be implemented—particularly the oil and gas emissions cap—will determine how close this plan gets Canada to its 2030 emissions target.
“This progress report confirms current and proposed policies are not yet enough to put Canada on track to achieve its 2030 commitment. Yet climate action is not a pass-or-fail test. Every megatonne matters when it comes to reducing greenhouse gasses, and federal policy is heading in the right direction.
“The number of policies that moved from the drawing board into legislation has risen sharply since April of last year. Specifically, Canada put in place Clean Fuel Regulations, stronger industrial and consumer carbon pricing, incentives for zero emissions vehicles, and tax support for low-carbon investments. But climate progress hinges on both policy implementation and real-world results: emissions dropping, new clean energy projects being developed, and everyday climate and cost-saving solutions like heat pumps and EVs taking off. Those are the benefits Canadians will see more of as the big remaining policies in Canada’s climate plan get done.
“This first progress report improves federal transparency and accountability on emissions reductions. Yet 2030 is fast approaching, and the math still doesn’t add up between Canada’s target and where we’re at today. Alongside accelerating federal policy, Canada needs more provincial, territorial, and federal cooperation to hit its target. The combined total of provinces’ and territories’ formal climate commitments equal just half of the emissions reductions needed to reach Canada’s 2030 target. If all orders of government start rowing in the same direction and with similar ambition, Canada’s overall progress will be faster and more cost effective than we’ve seen to date.”
Note: In the coming days, the Canadian Climate Institute will release a comprehensive independent assessment of the government’s Emissions Reduction Plan progress report, which will include detailed emissions modelling and analysis of the expected effectiveness of Canada’s current suite of climate policies.
The Canadian Climate Institute has climate policy experts available to comment on these announcements in Canada and Dubai. To arrange an interview, please contact:
Canadian Climate Institute
- Insight: “What are oil and gas companies doing to reduce their emissions?”
- Statement: “Regulating methane is a no-brainer to curb oil and gas emissions”
- Insight: Strong methane regulations make the oil and gas cap easier and cheaper
- Insight: The cap on oil and gas emissions is doable, but time is scarce
- 440 Megatonnes.ca: Emissions Pathways tracker
- Scoping paper: Aligning Canada’s oil and gas sector with net zero