Canada's Emission Trends 2014: chapter 3


Key Drivers Used in the Development of Emissions Projections

A number of factors influence greenhouse gas (GHG) emissions in Canada. Economic and population growth as well as the mix of energy supply are examples of drivers of emissions. Projections of future emissions are greatly influenced by the underlying assumptions about the expected development of economic drivers over time. Changing assumptions about any of these factors will alter the future path of emissions (see the Projected Alternative Emissions Scenarios section and Annex 3).

The approach adopted for development of the emissions scenarios presented here relies on a set of key assumptions. The short-term economic projections to the year 2018 are calibrated to private sector projections used by Finance Canada from their Survey of Private Sector Economic Forecasters report, June 2014. Beyond 2018, long-term key economic assumptions are based on Finance Canada’s Update of Economic and Fiscal Projections, November 2013. Forecasts of major energy supply projects from the National Energy Board’s 2013 projections were incorporated for key variables and assumptions in the model (e.g., oil and gas production and price). Under the National Energy Board’s review process, supply forecasts are based on consultation with industry experts and reflect the government’s most recent views regarding the evolution of Canada’s energy supply sector. The projections also incorporate data from the NIR and the U.S. Energy Information Administration. For a more detailed summary of key economic data and assumptions, see Annex 2.

Government policy also has a significant impact on emissions, as do changes in behaviour by consumers and businesses. Although the modeling explicitly recognizes price-driven technological progress (e.g., known, advanced, energy-efficient technologies will become more cost-effective over time), it is virtually impossible to predict which new technologies will be developed and commercialized in the future, so no assumptions are made in this regard. Likewise, behavioural factors have been kept constant throughout the entire projection period. In this respect, the expected trend in emissions projections will be shaped by existing government measures. In reality, technological progress, behavioural shifts and future government measures must all contribute to reduce emissions.

The Land Use, Land-use Change and Forestry (LULUCF) sector is modeled and accounted for separately from the other sectors within this report. As with other sectors, key drivers of human-caused emission trends in the LULUCF sector include economic conditions, management practices and policy.

The expected contribution of the LULUCF sector towards the Copenhagen target is currently established by comparing business-as-usual emissions/removals levels in 2020 to either 2005 levels or, in the case of the managed forest sector, to a Reference Level based on an internationally accepted approach. Due to economic conditions and various management practice decisions, the LULUCF sector is expected to improve relative to the base year or Reference Levels.

Taking these drivers into account, the expected LULUCF contribution is 19 Mt, largely reflecting lower expected economic activity (i.e., harvesting) than in the past. This 19 Mt contribution is subtracted from total national emissions projections in 2020 as a credit towards reaching the target.

Taking into account all of the economic drivers described above, with no major technology changes and factoring in current government measures, results in a scenario whereby emissions reach 727 Mt by 2020 when the projected contribution from LULUCF is included.

Reference Scenario: Projected Trends

National Emissions Projections

Emissions and economic activity are intrinsically linked, although in a Canadian context that relationship has weakened over the past two decades as a result of structural changes, as well as behavioural and technological changes and improvements. Emissions intensity, defined as GHG emissions per dollar of GDP, measures the relationship between changes in the economy and emissions. In Canada, the relationship between total GHG emissions and total real GDP has declined at an average annual rate of 1.3% from 1990 to 2012. This trend is expected to continue but at a slower rate through 2020.

Figure 3: Canadian GHG Emissions Intensity to 2020 (excluding LULUCF)

Figure 3 - see text description below
Text description of Figure 3

Figure 3 presents a single time series line graph with the horizontal axis spanning years the 1990-2020 in five year increments. The vertical axis is in Mt CO2 eq per billion 2012$ of GDP and spans the values 0.2 through 0.9 in increments of 0.1. The starting value in 1990 is 0.83 and it is mostly flat through to a value of 0.84 in 1996. After that, it declines mostly steadily to a value of 0.58 in 2012. After 2012, it declines more slowly until it reaches 0.55 in 2020. The graph features a text box which contains the following: Average Annual Intensity Improvements: 1990-2012: 1.3%; 2012-2020: 0.7%.

However, given that a strong connection still remains between economic growth and GHG emissions, absolute emissions are projected to rise over the period, although at a slower rate than economic growth. As the economy grows beyond 2012 (the latest year available for historical emissions levels), total emissions are projected to increase. Absent further government action and before taking contributions from LULUCF into account, by 2020 emissions are projected to reach 746 Mt, an increase of 10 Mt from 2005. As shown in Figure 4, when the 19 Mt contribution of LULUCF is taken into account, emissions in 2020 are projected to be 727 Mt.

Progress on Reducing Emissions

Progress in reducing GHG emissions is measured against a “without measures” scenario. This scenario, which is described in more detail in Annex 4, acts as a baseline where consumers, businesses and governments take no action post-2005 to reduce emissions.

The scenario that includes current measures is then compared against this baseline scenario. In order to be included in the “with current measures” scenario, actions must be concrete or legislated, financially backed, and specific enough to add to the modeling platform as of May 2014 (the policies and measures modeled in this report are listed in Annex 2).

This is consistent with UNFCCC guidelines for National Communication submissions, which recommend measuring the total effect of measures by taking the difference between “with measures” and “without measures” projections. Moreover, this comparison shows the level of effort required to achieve the target in 2020. This could not be captured by measuring emissions against current levels, as this would not take into account factors such as population and economic growth that will affect emissions between now and 2020.

The analysis indicates that if consumers, businesses and governments had taken no action to reduce GHG emissions after 2005, emissions in 2020 would have risen to 857 Mt. This is in comparison to the “with current measures” scenario where, as a result of actions taken since 2005 and the 19 Mt contribution from LULUCF, emissions in 2020 are expected to be 727 Mt, a total of 130 Mt less than under a “without measures” scenario (Figure 4).

Figure 4: Canadian GHG Emissions With and Without Current Measures: 2005 to 2020

Figure 4 - see text description below
Text description of Figure 4

Figure 4 presents a time series in a bar graph for the years 2005, 2012 and 2020. The vertical axis is in Megatonnes of CO2e and spans values of 0 to 1,000 in increments of 100. The value for the 2005 bar is 736 Mt. The bar for the year 2012 has a value of 699 Mt. The value for the 2020 bar is 727 Mt. There is a two part extension shown on top of the 2020 bar with 19 Mt attributed to LULUCF and 111 Mt attributed to emission reductions. The total of the bar graph and the extension is 857 Mt and represents the ‘Without Measures’ scenario emissions total. The difference between the ‘Without Measures’ scenario emissions total of 857 Mt and the ‘With Measures’ scenario emissions total of 727 Mt is 130 Mt and is labelled on the graph as ‘Contribution to Target’.

Per Capita Emissions

Total GHG emissions divided by the population of Canada (per capita emissions) have decreased significantly since 2005, when they were 22.8 tonnes per person. In 2012, emissions per capita were only 20.1 tonnes per person, which is the lowest level recorded since records began in 1990.

Projections show this trend continuing through 2020, with per capita emissions expected to be 19.7 tonnes per person in 2020 (Table 2).

Table 2: Canadian GHG Emissions per Capita (excluding LULUCF)
Tonnes CO2eq 2005 2012 2020
Per capita emissions 22.8 20.1 19.7

Decomposition of Canada’s Energy-related GHG Emissions

Although there is a close relationship between changes in GHG emissions and changes in the economy, the relationship has weakened since 1990 as a result of significant improvements in emissions intensity. These improvements are expected to continue into the future, largely as a result of energy efficiency improvements and the use of cleaner fuels.

To examine how different factors contributed to trends in projected emissions, a decomposition analysis of Canada’s projected combustion emissions was developed (see Annex 4 for methodology). The analysis focused on combustion emissions due to their strong link to energy use. Combustion emissions, which accounted for 72% or 532 Mt of Canada’s GHG emissions in 2005, include stationary sources such as the fuel required to heat homes and generate electricity as well as mobile sources such as light-duty and heavy-duty vehicles. Combustion emissions exclude sources such as industrial process emissions and agricultural methane. Environment Canada projects that combustion emissions are expected to grow to 544 Mt in 2020, representing increases of 12 Mt over 2005 levels.

Overall, as shown in the graph below, the analysis suggests that although economic growth and structural shifts in the economy put an upward pressure on projected combustion emissions, these factors are expected to be mostly offset by the switch to cleaner and more efficient energy use. The analysis decomposes the growth in combustion emissions into four different factors:

  • The Activity Effect measures the impact of expected future economic growth. On its own, this growth could be expected to lead to 108 Mt of additional GHG emissions in 2020.
  • The Structural Effect measures the change in the composition of the economy. Although there continues to be a shift towards service industries, this is dominated by the projected shift to more intensive industries such as the oil sands. As such, the impact of the projected structure of the economy would be an increase in emissions by 11 Mt in 2020.
  • The Fuel Switching Effect measures changes in the mix of fuels. The shift to cleaner fuels such as the replacement of coal-fired electricity with other, cleaner sources is projected to have a significant impact, decreasing emissions by 59 Mt in 2020.
  • The Energy Efficiency Effect measures changes in energy efficiency at the subsector level. The projections indicate that adopting currently available energy efficient technologies through policies, consumer responses to energy prices, and stock turnover could reduce emissions by 48 Mt in 2020.

Figure 5: Decomposition of Emissions Growth in 2020 since 2005

Figure 5 - see text description below
Text description of Figure 5

Figure 5 presents a bar graph with five categories on the horizontal axis. They are, Total Emissions, Activity, Structure, Fuel Switching and Energy Efficiency. Each category has a value for 2020. The vertical axis is Expected Change in emissions (Mt) and spans the values of -100 to 150 in increments of 50. The category totals are as follows. Total Emissions: 12; Activity: 108; Structure: 11; Fuel Switching: -59; Energy Efficiency: -48.

Emissions Projections by Sector

Table 3 illustrates how the projected trends in greenhouse gas emissions vary by economic sector. This is because of the expected evolution of the key drivers of emissions in each sector, as well as various government initiatives that will affect the emissions intensity of the sector going forward. For example, the growing population in Canada affects the number of cars on the road, thus emissions from this subsector would be projected to rise. However, offsetting this trend are the Government of Canada’s GHG performance standards for new vehicles, which are causing the average emissions intensity of these vehicles to decline through the projection period.

The electricity generating sector is the largest contributor to total emissions reductions, largely due to the combined impact of various government measures to create a cleaner electricity system, predominately by phasing out coal-fired generation. Electricity emissions are projected to decline by 50 Mt (41%) between 2005 and 2020. In contrast, increased production in Canada’s oil sands is expected to drive a rise in emissions from the oil and gas sector of 45 Mt (28%) between 2005 and 2020.

Table 3: Change in GHG Emissions by Economic Sector (Mt CO 2 eq)
  2005 2012 2020 Change
2005 to
2020
Transportation 168 165 167 -1
Oil and Gas 159 173 204 45
Electricity 121 86 71 -50
Buildings 84 80 98 14
Emissions-intensive and Trade-exposed Industries 89 78 90 1
Agriculture 68 69 70 2
Waste and Others 47 47 46 -1
Expected LULUCF Contribution - - -19 -
Total 736 699 727 -9

Note: Numbers may not sum to the total due to rounding.

Transportation

In 2012, emissions from transportation (including passenger, freight and off-road emissions) were the second-largest contributor to Canada’s GHG emissions, representing 24% of overall GHGs.

In October 2010, the Government of Canada released the final Passenger Automobile and Light Truck Greenhouse Gas Emission Regulations (LDV1), which prescribe progressively more stringent annual emission standards for new vehicles of model years 2011 to 2016. The Government of Canada has also published proposed regulations in the Canada Gazette in 2014 for the second phase of action on light-duty vehicles, which contains increasingly stringent GHG emissions standards for light-duty vehicles of model years 2017 to 2025 (LDV2).

Under both phases of light-duty vehicle regulations, spanning model years 2011 to 2025, the fuel efficiency of new cars will increase by 41%, as compared with model year 2010 (and 50% compared with the 2008 model year), and the fuel efficiency of new passenger light trucks will increase by 37%. The sales-weighted fuel efficiency of new cars is projected to improve from 8.6 L/100 km in 2010 to 6.4 L/100 km in 2020 and to 5.1 L/100 km by 2025. The sales-weighted fuel efficiency of new passenger light trucks are projected to improve from 12.0 L/100 km in 2010 to 9.1 L/100 km in 2020 and to 7.6 L/100 km by 2025.

These improvements in efficiency are expected to help reduce emissions over the longer term. Total transportation emissions are projected to decrease by 1 Mt from 168 Mt in 2005 to 167 Mt by 2020. This departure from historical trends is expected to continue as a result of greater fuel efficiency in vehicles being accelerated by federal vehicle emissions regulations, despite projected increases in population and number of vehicles. Emissions are expected to further decline as the stock of existing vehicles is gradually turned over with the newer, more efficient models.

As depicted in Table 4, the transportation sector comprises several distinct subsectors: passenger, freight, air and others (e.g., rail and marine). Each subsector exhibits different trends during the projected period. For example, emissions from passenger transportation are projected to decrease by 8 Mt between 2005 and 20/20, while those for ground freight, off-road and other vehicles are projected to grow by 10 Mt over the same time period due to anticipated economic growth. As a result, net emissions remain essentially stable over the period.

Although absolute emissions are expected to grow in the freight subsector due to expected economic growth, emissions are expected to decrease relative to business-as-usual levels as a result of various federal, provincial and territorial programs. The regulations for heavy-duty vehicles will improve the average fuel efficiency of trucks from 2.3 L/100 tonne-km in 2012 to 2.2 L/100 tonne-km by 2020.

Table 4: Transportation: Emissions (Mt CO 2 eq)
  2005 2012 2020 Change
2005 to
2020
Passenger Transport 96 94 88 -8
    Cars, Trucks and Motorcycles 87 85 78 -9
    Bus, Rail and Domestic Aviation 9 8 9 0
Freight Transport 57 61 67 10
    Heavy-Duty Trucks, Rail 49 54 59 10
    Domestic Aviation and Marine 8 7 8 0
Other: Recreational, Commercial and Residential 14 11 12 -2
Total 168 165 167 -1

Note: Numbers may not sum to the total due to rounding.

Oil and Gas

Emissions from oil and gas are projected to increase by 28% (from 159 Mt to 204 Mt) over the 2005 to 2020 time frame. This is due mainly to increases in oil sands production.

Table 5: Oil and Gas Sector: Emissions by Production Type (Mt CO 2 eq)
  2005 2012 2020 Change
2005 to
2020
Natural Gas Production and Processing 54 48 40 -14
Conventional Oil Production 32 30 29 -3
    Light Oil Production 9 10 9 0
    Heavy Oil Production 21 18 17 -4
    Frontier Oil Production 2 2 2 0
Oil Sands 34 61 103 69
    Bitumen in Situ 11 26 53 42
    Bitumen Mining 9 15 23 14
    Bitumen Upgrading 13 20 27 14
Oil and Natural Gas Transmission 16 11 9 -7
Downstream Oil and Gas 24 22 21 -3
    Petroleum Products 22 20 18 -4
    Natural Gas Distribution 2 2 3 1
Liquid Natural Gas Production 0 0 3 3
Total 159 173 204 45
Upstream Oil and Gas

Upstream oil and gas includes the extraction, production, processing and transmission of both conventional and unconventional oil and gas. This subsector represented approximately 87% of the oil and gas sector emissions in 2012. This share is expected to increase to 90% by 2020 as oil sands extraction increases significantly.

Emissions projections in the oil and gas sector are based on the National Energy Board’s assumptions of oil and natural gas prices as well as estimates of anticipated production. Under these assumptions, emissions from upstream oil and gas production are estimated to grow from 135 Mt in 2005 to 181 Mt in 2020. This increase is driven by the growth in oil sands production, where emissions are expected to increase from 34 Mt in 2005 to about 103 Mt by 2020. Specifically, emissions from oil sands mining are projected to more than double over the 2005 to 2020 time period. Even more significantly, emissions from in situ production are expected to increase from 11 Mt in 2005 to 53 Mt in 2020. The emissions associated with the upgrading of oil-sands bitumen are expected to rise from 13 Mt in 2005 to 27 Mt by 2020.

Emissions from conventional crude oil production are expected to fall from 32 Mt in 2005 to 29 Mt in 2020 as conventional reserves are depleted. Emissions from natural gas production and processing are also expected to fall from about 54 Mt in 2005 to 40 Mt by 2020.

Emissions from the pipeline transport of oil and natural gas are expected to fall from about 16 Mt in 2005 to 9 Mt by 2020.

Table 6: Selected Upstream Oil and Natural Gas Subsectors: Emissions and Drivers

Conventional Oil Production
  2005 2012 2020
Emissions (Mt CO2 eq) 32 30 29
Production (1000 barrels/day) 1359 1311 1302
Natural Gas Production and Processing
  2005 2012 2020
Emissions (Mt CO2 eq) 54 48 40
Gross Production (billion cubic feet) 6834 5826 4861
Oil Sands
  2005 2012 2020
Emissions (Mt CO2 eq) 34 61 103
Production (1000 barrels/day) 1064 1921 3418
Downstream Oil and Gas

Emissions from the downstream subsectors are expected to remain relatively unchanged throughout the projection period. Emissions are projected to decrease from 24 Mt in 2005 to 21 Mt in 2020.

Table 7 displays emissions associated with petroleum refining, which accounted for over 90% of downstream oil and gas emissions in 2005. From 2005 to 2020, emissions from petroleum refining are projected to decline by 4 Mt.

Canadian refineries are expected to decrease their output by 4% between 2012 and 2020. However, GHG emissions are expected to decrease by 10% over this time frame due to improvements in energy efficiency expected at the facilities (e.g., refurbishments).

Table 7: Petroleum Refining: Emissions and Drivers

Traditional Refineries
  2005 2012 2020
Emissions (Mt CO2 eq) 22 20 18
Refined Petroleum Processed (1000 barrels/day) 2296 2193 2112
Liquified Natural Gas

Liquefied natural gas (LNG) is natural gas (predominantly methane) that has been converted to liquid form for ease of storage and transport. Canadian projects in British Columbia and eastern Canada aim to produce LNG to sell in global markets, where it would be re-gasified and distributed as pipeline natural gas. There is a high degree of uncertainty regarding LNG production in Canada since its potential for export resides in factors such as the cost and acceptability of export terminals and pipelines on the West Coast, as well as the long-term price expectations of natural gas, both domestically and internationally. For this report, modeling assumptions have used the National Energy Board’s 2013 projections of expected LNG production. GHG emissions for LNG production represent emissions from the incremental energy consumption required for liquefaction processes.

Electricity Generation

The recent downward trend in emissions from the electricity sector is expected to continue over the next decade as a result of various federal and provincial government initiatives. Emissions in the electricity sector are projected to fall by 41% between 2005 and 2020.

Several provinces have introduced measures that will contribute to the decline of emissions in the electricity sector by moving away from fossil fuel electricity generation and towards cleaner sources of power. The Government of Canada released final regulations to reduce emissions from coal-fired electricity generation in September 2012. The regulations apply a stringent performance standard to new coal-fired electricity generation units and those coal-fired units that have reached the end of their economic life. The regulations come into effect on July 1, 2015, and will facilitate a permanent transition towards lower or non-emitting types of generation such as high-efficiency natural gas and renewable energy. With this regulation, Canada became the first major coal user to ban construction of traditional coal-fired electricity generation units. Canada already boasts one of the cleanest electricity systems in the world, with three quarters of our electricity supply emitting no GHGs. These regulations further strengthen our position as a world leader in clean electricity production.

Table 8 outlines the decline in projected emissions alongside the expected increase in electricity generation through 2020.

Table 8: Electricity Sector: Emissions and Drivers
  2005 2012 2020
Emissions (Mt CO2 eq) 121 86 71
Generation (Terawatt hours) 553 553 590

The increase in generation expected through 2020 will be powered from various fuel sources depending on the Canadian province and available resources. Although coal usage for electricity generation is declining, the proportion of power generation from fossil fuels is expected to vary by province depending on the availability of electricity from hydro, nuclear power and non-hydro renewable energy sources such as wind.Footnote 9 Hydro-power generation is expected to increase in most Canadian provinces. On a national level, emissions from coal-fired generation are projected to decline by 46 Mt over the 2005 to 2020 time period.

Table 9: Electricity Generation: Emissions by Fuel Type (Mt CO2eq)
  2005 2012 2020 Change
2005 to
2020
Coal 97 63 51 -46
Refined Petroleum Products 11 4 3 -8
Natural Gas 14 19 16 2
Biomass 0 0 0 0
Total 121 86 71 -50

Note: Numbers may not sum to the total due to rounding.

The proportion of utility electricity generation coming from wind power and other renewable sources, excluding hydro, is expected to continue to increase between 2005 and 2020. Non-hydro renewables comprised 0.3% of total utility electricity generation in 2005 and are expected to account for 7.4% of total generation by 2020. It is assumed that renewables do not generate emissions.

Emissions-intensive and Trade-exposed Industries

The Emissions-intensive and Trade-exposed (EITE) sector includes metal and non-metal mining activities, smelting and refining, and the production and processing of industrial goods such as chemicals, fertilizers, aluminum, pulp and paper, iron and steel, and cement.

Emissions from the EITE sector declined 11 Mt between 2005 and 2012 following a decline in pulp and paper and mining output but are projected to reach 2005 levels overall by 2020, owing to modest production growth in the recovery years of the economic downturn and continued reduction of emission intensities.

Table 10: Emissions-intensive and Trade-exposed Industries: Emissions by Subsector (Mt CO2 eq)
  2005 2012 2020 Change
2005 to
2020
Mining 6 8 9 3
Smelting and Refining (non-ferrous metals) 14 10 12 -2
Pulp and Paper 9 6 6 -3
Iron and Steel 19 16 18 -1
Cement 13 10 11 -2
Lime and Gypsum 3 3 3 0
Chemicals and Fertilizers 25 25 32 7
Total 89 78 90 1

Note: Numbers may not sum to the total due to rounding.

Buildings

Emissions from commercial and residential buildings are projected to increase by 15% (from 84 Mt to 98 Mt) over the 2005 to 2020 time frame (excluding indirect emissions from electricity).

Table 11: Buildings: Emissions (Mt CO2 eq)
  2005 2012 2020 Change
2005 to
2020
Residential 45 41 47 2
Commercial 40 39 51 11
Total 84 80 98 14

Note: Numbers may not sum to the total due to rounding.

Residential Sector

As shown in Table 12, GHG emissions from residential buildings (e.g., houses, apartments and other dwellings) are expected to rise steadily by 6 Mt between 2012 and 2020 (15%). Although energy intensity continues to decline in the projection period, the assumption that heating requirements will be the average of the last 10 years leads to higher space heating demand than what has been seen in recent, warmer winters.

Table 12: Residential Sector: Emissions and Drivers
  2005 2012 2020
Emissions (Mt CO2 eq) 45 41 47
Households (millions) 12.7 14.0 15.7
Commercial Sector

GHG emissions from Canada’s commercial sector are expected to reach 51 Mt in 2020, an increase of 11 Mt from 2005 (Table 13). Emissions in commercial buildings remained stable between 2005 and 2012, while floor space continued to increase due, in part, to strengthening of building energy codes and increased commitment to benchmark energy use and the undertaking of energy-related retrofits. Even with continued efficiency improvements, emissions are expected to grow due to two factors. The first is an expansion of commercial floor space (the principal driver of emissions in this subsector) as the economy continues to grow. The second is the expected increase of hydrofluorocarbons (HFCs) in refrigeration and air conditioning in the commercial sector, due to the phase-out of ozone-depleting hydrochlorofluorocarbon (HCFC) refrigerant alternatives (see box below). HFCs are among the strongest GHGs and some HFCs are up to 14,000 times more potent than carbon dioxide. This implies that even a small increase in HFC use has a significant impact on emissions. Between 2012 and 2020, emissions are projected to increase by 31% (12 Mt), while floor space is projected to increase by 14%. HFC emissions (in CO2 eq) account for more than one third (4.1 Mt) of the projected increase in overall emissions from commercial buildings between 2012 and 2020. However, the Government of Canada has indicated the intent to regulate HFCs which will limit growth of these emissions in the future.

Table 13: Commercial Sector: Emissions and Drivers
  2005 2012 2020
Emissions (Mt CO2 eq) 40 39 51
Floor Space (millions m2) 634 712 813

Emissions Growth from Hydrofluorocarbons

Hydrofluorocarbons (HFCs) are human-made, non-ozone-depleting chemicals used mainly in air conditioning and refrigeration systems, foam insulation, and aerosol applications. Most of these fluorinated gases are short-lived climate pollutants and potent GHGs, and some HFCs are up to 14,000 times more potent than CO2. Globally, use and emissions of HFCs are growing rapidly as they continue to be introduced as alternatives to ozone-depleting substances, such as hydrochlorofluorocarbons (HCFCs), which are being phased out under the Montreal Protocol, an international treaty signed in 1987 to protect the ozone layer. While HFCs currently account for about 1% of global GHG emissions, if no action is taken, they could account for up to 19% of CO2 eq emissions by 2050, given the sustained growth in demand for refrigeration and air conditioning in buildings and motor vehicles around the world.

In Canada, total GHG emissions from HFCs were less than 1 Mt in 1990, 5 Mt in 2005 and 8 Mt in 2012. However, they are projected to increase to 15 Mt in 2020, nearly twice the current levels. Under a business-as-usual scenario, HFCs are projected to increase at a faster rate than economic growth because they are often replacing HCFCs that are being phased out. HFC emissions are projected to rise in both the transportation and building sectors from applications such as commercial refrigeration, air conditioning and insulation foam products.

For the past five years, Canada, in partnership with Mexico and the United States, has advocated to amend the Montreal Protocol to include a phase-down of HFCs. The amendment would gradually reduce the consumption and production of HFCs and control by-product emissions of HFCs globally. While the proposal has not yet been adopted by the international community, , Canada is committed to addressing HFCs and has announced that it will publish a Notice of Intent to regulate these gases. Building on the approach of integrating with our largest trading partner, the regulations will align with recently proposed United States regulations on HFCs. The regulations will apply to HFCs in bulk and to certain manufactured products containing HFCs.

Agriculture

While emissions remain relatively stable over the 2005 to 2020 period, there are a number of compositional trends in the sector. Between 2005 and 2012, increases from on-farm fuel use and crop production were offset by decreases in animal production.

In the projection period, all agriculture sub-sector emissions are projected to remain relatively stable, reaching a total of 70 Mt in 2020.

Table 14: Agriculture Sector: Emissions Footnote 10 (Mt CO 2 eq)
  2005 2012 2020 Change
2005 to
2020
On-farm Fuel Use 10 14 13 3
Crop Production 19 24 24 5
Animal Production 39 32 33 -6
Total 68 69 70 2

Note: Numbers may not sum to the total due to rounding.

Waste and Others

This sector includes a number of diverse subsectors including waste as well as other industrial sectors. Non-emissions-intensive industrial subsectors included in the Waste and Others sector represent a wide variety of operations, and include light manufacturing (e.g., food and beverage, electronics), construction and forestry. Projected reductions in waste-related emissions, mostly due to increased landfill gas capture, are expected to be offset by moderate growth in the non-emissions-intensive industrial sectors over the 2005 to 2020 time frame.

Table 15: Waste and Others: Emissions (Mt CO2 eq)
  2005 2012 2020 Change
2005 to
2020
Waste 22 21 16 -6
Coal Production 2 4 4 2
Light Manufacturing, Construction and Forest Resources 23 22 26 3
Total 47 47 46 -1

Note: Numbers may not sum to the total due to rounding.

Land Use, Land-Use Change and Forestry

LULUCF is a particularly important sector for Canada given our vast land area. Of the world’s forests, 10% are in Canada. Our managed forest covers 232 million hectares,Footnote 11 more than the managed forest of the entire European Union. Canada also has 65 million hectares of total farm area, as reported in the 2011 Census of Agriculture. These managed lands can act either as a carbon sink (i.e., remove CO2 from the atmosphere) or a GHG source (emit CO2 and other GHGs to the atmosphere). For example, planting trees on non-forested land (afforestation) removes carbon from the atmosphere as the trees grow, but conversion of forest land to other land uses (deforestation) will emit CO2 and other GHGs to the atmosphere due to decomposition or burning of the biomass. LULUCF accounting represents only emissions/removals from managed lands in Canada.Footnote 12

The contribution of the LULUCF sector towards Canada’s 2020 target represents emissions/removals that result from human activities. Emissions/removals related to natural disturbances (e.g., wildfires, insect infestations such as the mountain pine beetle) are not taken into account when calculating the LULUCF contribution.Footnote 13 The LULUCF sector has been included in both the 2012 and 2013 Emissions Trendsreports. This year, Canada continues to estimate a contribution arising from the LULUCF sector using the same general methodology, but using updated data and some methodological improvements consistent with the 2014 NIR.

In this report, the LULUCF sector includes the same four categories or subsectors as shown in the 2013 Emissions Trends Report:

  • Forest Land Remaining Forest Land: all forest that is “managed” for timber (e.g., harvesting) and non-timber resources (including parks), or subject to fire protection (this amounts to 67% of all forests in Canada);
  • Cropland Remaining Cropland: cultivated agricultural land;
  • Forest Land Converted to Other Land Categories: permanent, human-induced conversion of forested land to other land use (to agricultural land, infrastructure, mines, etc.) where forest is not expected to re-grow;
  • Land Converted to Forest Land: land afforested through direct human activity (e.g., planting) and where the previous land use was not forest.

Table 16 summarizes the projected emissions and removals from the LULUCF sector in 2020. The LULUCF projection estimates are modeled separately from other economic sectors and use different accounting approaches than the other sectors. Each LULUCF subsector’s contribution to Canada’s 2020 emissions reduction target is estimated using an accounting approach that compares projected business-as-usual 2020 emissions/removals to 2005 emissions/removals, with the exception of Forest Land Remaining Forest Land, where 2020 projected emissions/removals from this subsector are compared with a 2020 Reference Level. The methodologies used for producing these estimates are described in more detail in Annex 1 of this report.

The expected total LULUCF contribution is 19 Mt, largely reflecting lower expected harvesting of trees in forest lands than in the past. This 19 Mt contribution is subtracted from total national emissions projections in 2020 as a credit towards reaching the target.

Table 16: Projected Emissions (+) or Removals (-) from the LULUCF Sector in 2020 Table note a (Mt CO2 eq)
(In Mt of GHG Emissions/Removals) 2005 Emissions/ 2020 Reference Level 2020 Projected Emissions/Removals Expected Contribution in 2020
Forest Land Remaining Forest Land -115.1Table note b -133.8 -18.7
Cropland Remaining CroplandTablecnote c -10.0 -8.0 2.0
Forest Land Converted to Other Land CategoriesTable note d 17.3Table note e 14.8 -2.5
Land Converted to Forest Land -0.9 -0.4 0.6
Total -108.7 -127.4 ≈-19

Forest Land Remaining Forest Land is expected to contribute a net sink or removal of 18.7 Mt (rounded to 19 Mt) towards the 2020 target, the largest contribution of all the LULUCF subsectors. The most important driver of human-caused emissions on forest lands is the volume of wood harvested. When trees are harvested, much of the carbon that was stored in the trees is removed from the forest and transferred to harvested wood products. The carbon stored in the harvested wood products is then released into the atmosphere over the course of several years or decades as wood products are discarded, decay in landfills, or are burned in woodstoves, etc. Meanwhile, the dead biomass left in the forest after the harvest releases carbon as it decomposes, although at the same time new trees begin to re-grow, removing carbon from the atmosphere.

The 18.7 Mt contribution represents the impact of human activities on GHGs emitted from Canada’s forests, driven primarily by the trends in harvesting. Harvest levels are projected to be lower in the period to 2020 than they were in the recent past, leading to anticipated reductions of human-caused emissions compared with historical levels, hence the contribution towards the target. As a result of the global economic recession, harvest levels in 2009 reached their lowest point since 1975, representing a 43% decline since the peak year of 2004.Footnote 14 Harvest levels have now started recovering but are expected to remain below average historical levels between now and 2020.

Beyond the pace of economic recovery for the forest sector, a number of additional factors are expected to influence harvest levels to 2020. First, the market for harvested wood products is experiencing structural changes. For example, while sales of lumber are recovering, the demand for pulp and paper products is being affected by a long-term shift towards electronic media. Second, some provinces have revised their policy frameworks for forest management, including harvesting. While the primary goal of provincial and territorial forest management policies is not climate change mitigation, these policies can impact  emissions/removals. For example, Quebec’s Sustainable Forest Development Act,Footnote 15 which came into force in 2013, and Ontario’s forest tenure reform, based on the 2011 Forest Tenure Modernization Act,Footnote 16 will both have effects on forest management and hence on forest emissions/removals.

Cropland Remaining CroplandFootnote 17 is expected to provide a net source of 2 Mt of emissions in 2020. Soil carbon sequestration in Canada has increased from a rate of 1 Mt CO2 eq per year in 1990 to 10 Mt CO2 eq per year in 2005 and is still 10 Mt in 2012 (NIR 2014). This increase has been driven by several factors such as increased uptake of no-till, reduced use of summerfallow and changing crop patterns. Estimates indicate that the rate of sequestration is expected to decline from 10 Mt to 8 Mt CO2 eq per year from 2012 to 2020 as a result of the soil sink approaching equilibrium and limited scope for additional practice adoption, thus creating a net source of 2 Mt in 2020. For example, on most of the land where no-till makes economic sense, that practice is already in use, and it is assumed that there will be little additional uptake. Also, a significant portion of the land already in no-till will have been in that practice for 20 years or more by 2020 and therefore approaching or at equilibrium. The rate of sequestration is expected to continue decreasing after 2020.

Forest Land Converted to Other Land Categoriesprovides a net sink of 2.5 Mt in 2020. Current forest conversion rates in Canada are estimated at 46 000 hectares per year, down from 52 000 in 2005 and from the rate of 64 000 hectares per year observed in 1990. Overall, forest conversion emissions are projected to decline slightly in 2020 relative to 2005. The drivers of forest conversion in Canada are varied. In 2005, the largest driver was agriculture followed by resource extraction, urban and industrial expansion, hydroelectric development and transportation (see Figure A.1 in Annex 1). By 2020, resource extraction is projected to surpass agriculture as the largest driver of land conversion, due to the expansion of the oil and gas industry.

Land Converted to Forest Land has a minor effect on the LULUCF contribution, providing a small net source of 0.6 Mt in 2020. Given the low levels of new forest creation, it is not possible to identify any trends in the activity except that it appears to be lower than in the 1990s.

The projected 19 Mt contribution of the LULUCF sector to achieving the 2020 target may change as subsector projections are refined over time as a result of further analysis, new data, updated projections or a change in accounting approaches. Actions aimed at reducing emissions or increasing removals in this sector could also change this projected estimate.

Emissions Projections by Province

Emissions vary significantly by province, driven by diversity in population size, economic activities and resource base, among other factors. For example, provinces where the economy is oriented more toward resource extraction will tend to have higher emission levels, whereas more manufacturing or service-based economies tend to have lower emissions levels. Electricity generation sources also vary, with provinces that rely on fossil fuels for their electricity generation having higher emissions than provinces that rely more on hydroelectricity. Table 17 shows the provincial/territorial distribution of emissions in absolute terms as well as their per capita (tonnes/capita) emissions.

Table 17: Provincial and Territorial GHG and per Capita Emissions: 2005 to 2012
  GHG Emissions
(Mt CO2 eq)
2005
GHG Emissions
(Mt CO2 eq)
2012
Per Capita Emissions
(t/capita)
2005
Per Capita Emissions
(t/capita)
2012
Newfoundland and Labrador 10 9 19.2 16.6
Prince Edward Island 2 2 15.6 13.4
Nova Scotia 23 19 24.6 20.1
New Brunswick 20 16 26.9 21.7
Quebec 86 78 11.3 9.7
Ontario 207 167 16.5 12.5
Manitoba 21 21 17.8 16.9
Saskatchewan 71 75 71.6 68.8
Alberta 232 249 69.8 64.0
British Columbia 62 60 14.8 13.2
Territories 2 2 23.0 17.9
Canada 736 699 22.8 20.1

Note: Numbers may not sum to the total due to rounding.

Table 18 displays projected provincial and territorial GHG emissions from 2005 to 2020. The projected emissions reflect a diversity of economic factors and government measures to reduce GHG emissions. These include public education campaigns, energy efficiency and renewable electricity programs, greening government operations, carbon taxes or levies (e.g., British Columbia, Alberta and Quebec), regulatory measures, and legislated renewable electricity targets.Footnote 18 All of the provincial and territorial governments (except Nunavut) have announced their own GHG reduction targets. These are described in Table A.8 of Annex 2.

Table 18: Provincial and Territorial GHG Emissions: 2005 to 2020 (Mt CO2eq)
  2005 2012 2020 Change
2005 to
2020
Newfoundland and Labrador 10 9 8 -2
Prince Edward Island 2 2 2 0
Nova Scotia 23 19 15 -8
New Brunswick 20 16 16 -4
Quebec 86 78 80 -6
Ontario 207 167 170 -37
Manitoba 21 21 23 2
Saskatchewan 71 75 73 2
Alberta 232 249 287 55
British Columbia 62 60 69 7
Territories 2 2 2 0
LULUCF - - -19 -
Canada 736 699 727 -9

Note: Numbers may not sum to the total due to rounding.

The provinces oriented toward resource extraction and/or that are highly reliant on fossil fuels for their electricity generation (i.e., Alberta, Saskatchewan and New Brunswick) have per capita emissions above the national average. The provinces highly reliant on hydroelectricity or less emission-intensive sources for their electricity generation (i.e., Quebec, British Columbia, Ontario, Newfoundland and Labrador, and Manitoba) have per capita emissions below the national average.

Table 19 displays projected provincial and territorial per capita GHG emissions to 2020 and compares them with actual emissions in 2005 and 2012. Per capita emissions are projected to fall in all provinces in 2020 relative to 2005 levels.

Table 19: Provincial and Territorial per Capita GHG Emissions: 2005 to 2020 (t/capita)
  2005 2012 2020
Newfoundland and Labrador 19.2 16.6 16.0
Prince Edward Island 15.6 13.4 12.1
Nova Scotia 24.6 20.1 15.9
New Brunswick 26.9 21.7 21.3
Quebec 11.3 9.7 9.4
Ontario 16.5 12.5 11.5
Manitoba 17.8 16.9 16.6
Saskatchewan 71.6 68.8 62.9
Alberta 69.8 64.0 65.3
British Columbia 14.8 13.2 13.7
Territories 23.0 17.9 18.5
Canada 22.8 20.1 19.7

 

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