Ottawa wants to send ‘market signal’ on Canada’s low-carbon future

Growth in Canada’s greenhouse gas emissions stalled in 2014, but Environment Minister Catherine McKenna said on Tuesday that the country has an enormous task ahead to drive down emissions to meet international commitments.

Emissions in the oil and gas sector continued to climb, even as slumping prices began to take their toll on an industry that had doubled its production – and its annual GHG output – from 1990 to 2014, Environment Canada said in its latest greenhouse-gas report released this week.

At a parliamentary committee hearing on Tuesday, Ms. McKenna said the government remains committed to eliminating subsidies to the oil industry over the medium term in order to send a “market signal” that the country is moving to a lower-carbon future. She said she is working with the Finance Minister on how to proceed, although she added that there are differing views on what constitutes a subsidy.

Over all, Canadian emissions rose to 732 megatonnes (MT) in 2014 from 731 MT in the previous year. Canada’s target for 2020 – set by the former Conservative government – is 620 MT, while the Tories pledged last year to cut GHGs to 523 MT by 2030, a target the Liberals have adopted as a “floor.”

Prime Minister Justin Trudeau will join 150 leaders at the United Nations on Friday – Earth Day – to formally sign the Paris climate accord. In December, 195 countries reached a historic agreement to limit the global temperature increase to less than two degrees C above pre-industrial levels and strive for a 1.5-degree goal.

Ms. McKenna said the government recognizes the challenge and is working with provinces and territories to produce a plan this fall that will plot a course to meet – and even exceed – Canada’s 2030 goal. When Mr. Trudeau met with U.S. President Barack Obama last month, he promised that his government would publish a plan this year for deeper emission cuts over the longer term.

But NDP environment critic Nathan Cullen slammed the Liberals for making ambitious promises without having any plan to achieve them. And Mr. Cullen said the government is still pursuing policies that will mean higher emissions, including support for oil pipelines to the west and east coasts.

“Efforts to even meet [former prime minister Stephen] Harper’s targets need to be dramatic, never mind these new targets that Mr. Trudeau has committed to in Paris without any analysis,” he said.

Ms. McKenna noted that the Prime Minister and premiers agreed in Vancouver last month to forge a national strategy that will address Canada’s international obligations, a plan that would include some form of carbon pricing.

However, some premiers opposed a broad-based levy in the form of a carbon tax or cap-and-trade plan; Saskatchewan’s Brad Wall suggested that taxpayers’ support for carbon capture in his province is equivalent to a carbon price.

At the committee meeting on Tuesday, Conservative MP Ed Fast raised alarms about the effort to impose carbon pricing on industries that would be left at a competitive disadvantage against foreign rivals that do not face similar levies. “Many Canadian businesses are deathly afraid that the playing field will be dramatically tilted against them if Canada moves forward and other key competitors fail to follow,” Mr. Fast said.

Ms. McKenna pointed to support for carbon pricing in the business community, including the Mining Association of Canada, which includes major oil sands producers Suncor Energy Inc. and Royal Dutch Shell PLC. Last week, the association endorsed the approach as the “most effective and efficient means of driving emissions reductions.”

The minister noted that the provinces are leading the way on carbon pricing. About 80 per cent of Canadians will be covered by carbon pricing once Ontario and Alberta implement their plans and join Quebec and British Columbia, which already have some form of levy.

Ms. McKenna also noted China plans to establish a national cap-and-trade plan next year, a move that she said will be a “game changer” in the global market.

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Courtesy: The Globe And Mail

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