A new climate report by Pembina Institute found Canada is falling short of net-zero emissions targets.
The energy and climate think-tank concluded no government is not going to meet their 2030 or 2050 net-zero goals. Modelling for the 2021 budget included the federal climate policy published in December 2020, forecasting a national emissions reduction of 36 percent below 2005 levels by 2030. That falls short of the federal government’s commitment to reduce emissions by 40 to 45 percent over the next decade.
Despite the fast-approaching 2030 target, 95 percent of emissions generated in Canada are not covered by either a provincial or territorial 2030 target or climate plans independently verified to deliver on the 2030 target, found the All Hands on Deck report. "No jurisdiction has developed pathways to describe how net-zero can be achieved."
On April 22, 2021, the federal government announced its intent to reduce Canada’s GHG emissions below the 468 Mt projected in Budget 2021 to 40 to 45 percent below 2005 levels. The PBO report noted the federal government’s most recent announcement in April to further reduce emissions by another 30 to 66 Mt by 2030 will require further action.
The Parliamentary Budget Officer (PBO) estimated in a June report that an additional $120 per tonne of the carbon tax needs is needed by 2030. Passed in 2018, the Greenhouse Gas Pollution Pricing Act capped the tax at $50 per tonne.
The economic cost of the tax increase on real GDP is a 0.8 percent reduction in 2030. Additional costs include cuts to labour force growth by 1 percent and significant contractions in transportation and oil and gas by up to 16 percent and 11 percent.
To achieve the 468 Mt reduction by 2030 projected in Budget 2021, the PBO estimated that announced non-price policies will have an effective cost of $91 per tonne, in addition to the $170 carbon tax. These regulations and incentives to develop and adopt lower emissions technologies are based on the assumption that the measures chosen have the lowest cost. At the lowest cost, the non-price policies will see real GDP decline further to 1.4 percent.
The $261 increase is equivalent to 52 cents extra per cubic metre of natural gas and an additional 62 cents for gasoline.
Pembina’s climate report conducted an assessment of climate policy across jurisdictions and revealed that over 50 percent of national emissions, including emissions from Alberta, Saskatchewan and Manitoba, are not covered by a provincial or territorial 2030 target. Almost three-quarters (74 percent) of national emissions, including emissions from Alberta, Ontario, Saskatchewan and Manitoba, are not covered by a provincial or territorial 2050 target.
Based upon the recommendations provided, they urged fossil fuel-producing provinces and territories — particularly Alberta — to create "transition plans" for the oil and gas sector. A "Just Transition" includes net-zero pathways and other comprehensive strategies that include holding governments accountable, prioritizing reconciliation and decarbonizing sectors of the economy.