May 182015

Source: Bloomberg Business 

by Josh Wingrove
12:27 PM EDT
May 15, 2015

Canada pledged to cut greenhouse-gas emissions by about a third by 2030 in a move quickly dismissed by environmentalists and energy analysts as lacking detail and unrealistic without major policy changes.

Environment Minister Leona Aglukkaq announced the new target Friday in Winnipeg, ahead of a UN climate summit in December. In effect, Canada pledged to reduce its emissions to an estimated 515 metric megatons by 2030, partly by introducing new regulations on its oil and gas sector. The country isn’t on pace to meet its previous goal, and predicts emissions will grow — not shrink — over the next five years.

Emissions were 726 megatons in 2013, the most recent year for which data is available, and government figures show emissions are set to grow leading up to 2020. Canada now plans to cut emissions by 29 percent between 2013 and 2030, based on Bloomberg calculations using public data.

To meet the new target, Canada “intends to develop” regulations to cut methane emissions from the oil and gas sector, in tandem with U.S. regulations, Aglukkaq said. Canada will also introduce regulations on emissions from natural gas electrical plants, her department said in a news release without specifying what the rules would include.

The government offered no projections of what reduction in emissions the new measures would produce, or how soon the new initiatives would be introduced.

Copenhagen Pledge

Under the 2009 Copenhagen Accord, Canada pledged to cut emissions by 17 percent from 2005 levels by 2020, or to 611 megatons, but is on pace to fall well short of its goal. Environment Canada figures show Canada’s emissions are projected to increase between 2015 and 2020, when they are projected to reach 727 megatons.

That means Canada’s Copenhagen pledge was to reduce emissions by 125 megatons between 2005 and 2020, whereas Canada is only on pace to cut them by nine megatons.

Formally, Aglukkaq announced Friday that Canada would cut its emissions by 30 percent from 2005 levels, when the country emitted an estimated 736 megatons, by 2030. That’s an estimated 515 megatons, whereas previously released government figures project emissions will total 815 megatons in 2030, 58 percent higher than Friday’s target.

Earlier this week, Ontario set its own 2030 target of 112 megatons, which would represent a 46 percent cut from 2005 levels. That puts the government of Canada’s most populous province — which has eliminated the use of coal power — on a more ambitious track than its federal counterpart.

The new national target is significant, but the government hasn’t laid out a plan to achieve it, said Andrew Leach, an associate professor at the University of Alberta’s business school, who studies the oil sands and climate issues.

‘No-win Situation’

“Think of every single activity we do today, cutting either a third of those things or making them 30 percent more emissions efficient,” Leach said in a telephone interview from Edmonton. “In reality, if we were to meet that target, we’d probably need some of the — if not the — most stringent greenhouse gas policies in the world in order to meet it.”

In effect, Leach said, the government has set up “a no-win situation” for itself.

The methane regulations, which more heavily affect conventional oil rather than the oil sands, matter but are “not going to move the needle on the way to 2020 in any meaningful sense,” Leach said. Until Canada specifies a plan, “nobody’s going to believe the target.”

‘Pretty Anemic’

Ontario’s Minister of Environment and Climate Change quickly took aim at the announcement. “It’s a pretty anemic goal,” Glen Murray said in a telephone interview. “It does not get at any really meaningful contribution to avoiding 2 degrees Celsius,” he said, referring to the commonly cited threshold for limiting increases in global average temperatures.

Murray said his province wasn’t consulted before Aglukkaq’s announcement and called it a “political exercise.”

Environmental groups also criticized the federal government’s new pledge. “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,” Keith Stewart, a Greenpeace campaigner in Canada, said in an e-mail Friday. In another statement, spokesman Graham Reeder said “these targets are a nice gesture, but for now that’s all they are, because the numbers here simply don’t add up.”

Oil Prices

Canada’s greenhouse gas emissions, published in its annual emissions trend report, could be overestimating emissions if oil prices remain low. In an analysis published Friday by EnviroEconomics, an Ottawa-based consulting firm, authors David McLaughlin and Dave Sawyer project 47 megatons in reductions can be achieved by 2030 due to a lower oil price, which has delayed capital spending in Canada’s oil patch. Existing government projections, however, could prove too cautious if oil prices spike again, Sawyer said in an e-mail.

Nearly all the growth in Canadian emissions, between 2005 and 2020, is forecast to come from Alberta’s oil and gas sector. Alberta, the fourth-most populous province, is the country’s biggest polluter. The federal government first promised emissions regulations for the oil and gas sector in 2006.

The U.S. has pledged to cut emissions by at least 26 percent from 2005 levels by 2025 — a lower target with a more aggressive timeframe. Mexico has pledged to cut emissions by 25 percent by 2030, though its per-capita emissions are already 74 percent lower than Canada’s, according to World Bank emissions data.

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