Canada has an enviable record of setting ambitious climate change targets, having done so four times since signing the United Nations Framework Convention on Climate Change in 1992. Its record at meeting them is far less praiseworthy – three failures so far. But the fourth target, announced by the federal government on May 15, may actually be achievable if the federal government warmly embraces international offset credits as a mechanism to make up any shortfall.
The May 15 announcement of Canada’s newest targets – greenhouse gas emissions 30% below 2005 levels by 2030, or a cut of 274 Mt below projections – included three specific measures:
- -Regulations to reduce methane emissions from the oil-and-gas sector
- -Regulations for natural gas-fired electricity
- -Regulations for the production of chemicals and nitrogen fertilizers.
With this announcement, Canada breaks stride with the United States, which has announced similar measures, but on a more demanding timeline.
The plan makes no mention of oil sands. It relies on continued provincial action on climate change, new accounting rules for carbon sinks and, perhaps most significantly, the option of using “international mechanisms to achieve its 2030 target.” That represents a 180 degree shift in policy.
In a statement, Keith Stewart, head of Greenpeace Canada’s Climate and Energy team said, “The Harper government has not only ignored its existing reduction target, but the pro-tar sands policies it has adopted are taking us in the opposite direction. Until today’s announcement is backed by a commitment to enacting policies that can actually achieve this new target, it isn’t worth the paper it is written on.”
But an analysis of the plan by CMC Research Institutes in Calgary suggests that the goals are achievable if Ottawa is prepared to accept the legitimacy of international offset credits.
CMC’s analysis takes into account provincial action, announced federal action, a continued weakness in oil price and carbon sinks. Those projections still bring Canada 68 Mt short of its goal by 2030, according to CMC. That’s where international credits could make up the difference.
Dave Sawyer, CEO of EnviroEconomics, told EcoLog News that the inventory is available. Through the United Nations’ Clean Development Mechanism, there is a current inventory of upwards of 1,400 Mt available at prices under $10 per tonne, he says. These are legitimate offsets representing genuine carbon reductions. Canada’s entry into the market, particularly in a big way, could be costly, he warns. It might put upward pressure on prices, and the purchases would also have to be made every year.
Who would be making the purchases is not yet clear, though for now it appears that it might be the federal government, and not the oil and gas industry.
That would constitute just another subsidy for the oil and gas industry, says Derek Wong, Principal Consultant at Carbon49. The Canadian oil and gas industry is already heavily subsidized compared to other member countries of the Organisation for Economic Co-operation and Development, he says.
“I’m not against buying offsets as a concept,” Wong told EcoLog News, “but obviously the industry should be the one paying for them.”
(Source: Ecolog News)