Canada's Emission Trends 2014: executive summary

Executive Summary

• Overview
• Measuring Canada’s Progress on Greenhouse Gas Emissions
• Canada’s Greenhouse Gas Emissions Projections

Overview

Canada is home to a rich and diverse natural environment. From clean air and water, to the conservation of our species at risk, and to protecting the health of Canadians from environmental hazards, preserving our environment is essential to our social and economic well-being.

The potential impacts of climate change are far-reaching, affecting all Canadians, our economy, infrastructure, health, the landscapes around us, and the wildlife that inhabit them. As an Arctic nation, Canada is particularly affected by the impacts of climate change.

Global greenhouse gas (GHG) emissions grew by approximately 40% between 1990 and 2011, with the bulk of the growth coming from emerging markets and developing countries. Over this period, Canada’s share of total global emissions has decreased slightly and is now less than 2%.

Canada recognizes that addressing climate change requires action by businesses, consumers and governments in all countries. Climate change is a shared responsibility in Canada, and provinces and territories have been setting emissions reductions targets and taking action to address climate change according to their unique circumstances. Likewise, businesses and individual Canadians are also taking important steps to reduce emissions by using resources more efficiently and adopting new, cleaner technologies.

The Government of Canada is focused on a pragmatic approach to addressing climate change that will reduce emissions while continuing to create jobs and encourage the growth of the economy. The Government of Canada is implementing a sector-by-sector approach to regulate GHG emissions, with regulations already in place in two of the largest sources of emissions: transportation and electricity. By undertaking this regulatory agenda, Canada has strengthened its position as a world leader in clean electricity generation by becoming the first major coal user to ban construction of traditional coal-fired electricity units. In addition, regulations in the transportation sector will ensure that 2025 model-year passenger vehicles and light trucks will emit about 50% less GHGs than 2008 models. Furthermore, GHG emissions from 2018 model-year heavy-duty vehicles will be reduced by up to 23%.

Efforts by Canadians are achieving results. According to the latest National Inventory Report, in 2012 Canada emitted about 699 megatonnes of carbon dioxide equivalent (Mt CO₂ eq) of GHGs to the atmosphere, excluding emissions/removals from Land Use, Land-use Change and Forestry (LULUCF). Between 2005 and 2012, total Canadian GHG emissions decreased by 5.1% (37 Mt), while the economy grew by 10.6% over the same period.

Economy-wide emissions remained steady over 2010, 2011 and 2012, despite economic growth of 4.4% over that period, demonstrating continued progress in decoupling emissions and economic growth. Between 1990 and 2012, the emissions intensity of the Canadian economy decreased by 29% and Canada’s per capita emissions reached a historic low of 20.1 tonnes of CO₂ eq per person, their lowest point since tracking began in 1990. Moreover, improvements in both emissions intensity and emissions per capita are expected to continue through 2020.

Overall, Canada’s unique geographic, demographic and economic circumstances influence its GHG emissions profile and make addressing climate change a significant challenge. Canada has an extreme, highly variable climate that contributes to higher energy use for space heating and cooling in both commercial and residential sectors. Canada’s large landmass and low population density contribute to higher transportation energy demand (and GHG emissions) per capita compared with smaller, more densely populated countries, mostly due to increased travelling distances. Despite having a small population, Canada’s average population growth rate is expected to be one of the highest relative to other developed countries, at about 1% per year.

In addition to faster-than-average population growth relative to other developed countries, Canada has experienced sustained economic growth. As a natural resource-rich economy, Canada is a net exporter of agricultural commodities, energy (electricity and oil and gas) and many resource-based commodities such as pulp and paper, mined metals, and aluminum. Over the past decade, Canada’s exports of energy, extracted resources and agricultural commodities as a share of Gross Domestic Product (GDP) have increased by almost 40%. Canada has the third-largest resources of crude oil in the world, and Canada's production of oil and gas is projected to rise to meet continuing global demand.

Measuring Canada’s Progress on Greenhouse Gas Emissions

Under the Copenhagen Accord, Canada committed to reducing its emissions by 17% from 2005 levels by 2020.^Footnote 1 As economy-wide emissions in 2005 were 736 Mt, Canada’s implied Copenhagen target is 611 Mt in 2020.

Assessing progress in reducing GHG emissions is best done by comparing a “with measures” scenario against a “without measures” scenario that acts as a baseline where consumers, businesses and governments take no action to reduce emissions after 2005, Canada’s base year for its Copenhagen commitment. This is the most appropriate approach, given Canada’s growing economy, as it more accurately captures the real and verifiable level of effort that will be required to reduce emissions. Progress cannot be adequately measured by comparing expected future emissions against current levels, as this would not take into account factors such as the expected population and economic growth that will affect emissions between now and 2020.

Projections presented in this report under the “with current measures” scenario include actions taken by governments, consumers and businesses up to 2012 as well as the future impacts of policies and measures that were announced or put in place as of May 2014. This scenario does not include further government action and policies that are proposed or planned but not implemented. (The policies and measures modeled in this report are listed in Annex 2.)

The analysis indicates that, in a scenario where consumers, businesses and governments take no action to reduce emissions after 2005, emissions in 2020 will rise to 857 Mt. Under the “with current measures” scenario that includes actions since 2005 as well as the contribution from LULUCF, Canada’s GHG emissions in 2020 are projected to be 727 Mt, a total of 130 Mt less than under a “without measures” scenario. This highlights the significant expected impacts of actions made to date but also indicates the need for further efforts from all Canadians, as additional reductions of 116 Mt will be required to meet Canada’s Copenhagen commitment (see Figure ES-1).

In a Spring 2012 submission to the United Nations Framework Convention on Climate Change (UNFCCC), Canada stated its intent to include the LULUCF sector in its accounting of GHG emissions towards its 2020 target, noting that emissions and related removals resulting from natural disturbances would be excluded from the accounting. It was also indicated at that time that a Reference Level or comparison against a 2005 baseline would be used for accounting. Based on these accounting approaches, the expected 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. Analysis of alternative accounting approaches remains ongoing.

Figure ES-1: Progress on Canada’s 2020 Target (Mt CO₂ eq)^Footnote2

The gap between the ‘Without Measures’ level of GHG emissions in 2020 (857 Mt) and the 611 Mt target now has been closed by 130 Mt. Upcoming federal policies, along with further provincial measures and actions from consumers and businesses, will contribute to the additional 116 Mt required for Canada to meet its commitments under the Copenhagen Accord.

Canada’s Greenhouse Gas Emissions Projections

As shown in Table ES-1, under a scenario that includes current measures and the contribution from LULUCF, absolute emissions are projected to be 727 Mt in 2020, 1.2% below 2005 levels.  Emissions from the oil and gas and buildings sectors are expected to increase, while emissions in the electricity sector are projected to decrease between 2005 and 2020. Emissions in the transportation, emissions-intensive and trade-exposed, agriculture, and waste and others sectors remain close to 2005 levels.

Although emissions are projected to decrease by 9 Mt between 2005 and 2020 when the contribution of LULUCF is included, GDP is expected to increase by 32% over the same period, demonstrating that economic growth and emissions growth are continuing to decouple. In addition, as population is projected to increase, per capita emissions are expected to fall to 19.7 tonnes of CO₂ eq per person in Canada in 2020, a decrease of 14% from 2005 levels.

GHG emissions projections depend on a number of economic and energy variables and are subject to significant uncertainty, especially in the longer term. Modeling estimates are subject to consultations with various industry associations, other federal departments and provincial/territorial governments. Modeling assumptions also undergo a periodic peer review process. Updates to key historical and projected energy data and drivers as well as the evolution of technology and demographics will alter the future emissions pathway.

To address the uncertainty inherent in projections, alternative scenarios that reflect different assumptions about oil and natural gas prices and production as well as different rates of economic growth have been developed. The greatest emissions are projected under a scenario aligned to the National Energy Board’s high oil and gas prices with higher-than-average annual growth in GDP between 2012 and 2020 (2.7% compared with 2.2% in the reference scenario). Alternatively, the lowest emissions scenario includes slower GDP growth (average growth of 1.5% between 2012 and 2020) and the National Energy Board’s low world oil and gas prices.

As shown in Figure ES-2, these scenarios suggest that the expected range of emissions in 2020 could be between 716 Mt in the lowest emissions scenario and 781 Mt in the highest emissions scenario, not including contributions for LULUCF. This 65 Mt range will continue to change over time with further government actions, technological change, economic conditions and developments in energy markets.

Figure ES-2: Range of Canada’s Projected GHG Emissions (excluding LULUCF)