Canada will not meet its 2030 greenhouse gas emission reduction targets without dramatically scaling up new technologies that the Parliamentary Budget Office warns could be “prohibitively expensive” in a sobering new report.
The report estimates the planned federal carbon tax ratcheting up to $170 per tonne in 2030, along with expected output-based pricing standards, would cut 96 megatonnes (Mt) from Canada’s emissions, pulling the total down from 674 Mt to 578 Mt in 2030. But the country’s planned commitment is 468 Mt in 2030 (36 per cent below 2005 levels), leaving the PBO to conclude there is a significant way to go if the country is going to hit its targets and that will likely require a new suite of tools.
“With the policies that are known right now, we expect a negative impact on GDP in 2030 of about 1.4 per cent to meet the targets that were in the 2021 budget,” said parliamentary budget officer Yves Giroux. “There will be a tradeoff between whether it’s the government or the private sector, or what the mix (is) of who bears the brunt of the cost.”
The report is predominantly focused on targets set out by government in December 2020 and in budget 2021, but does acknowledge that in late April, Ottawa announced its intention to lower GHG emissions 40 to 45 per cent by 2030, representing an additional 30 to 66 Mt gap to close.
The report concludes that it would take “extraordinary measures” to achieve the budget 2021 targets, let alone the more ambitious ones set in late April. Offering a sense of scale, the PBO says rising to this challenge would require an extra six million zero-emission vehicles on the roads by 2030 — which would require half of all vehicles sold from 2022 on to be zero-emission and charged with zero-emission electricity.
The report says the main obstacle to overcome is essentially how to finance the transition, noting the private sector won’t make the change without significant incentive. If the government pursues subsidies as a strategy, the report finds “the costs of achieving the last 30 Mt reduction could reach prohibitive levels for public finances.”
Giroux said the “prohibitive” cost does not have any specific dollar figure associated with it; rather, it’s “highly subjective,” he explained.
NDP Infrastructure critic MP Taylor Bachrach said the PBO’s report paid more attention to the cost of transitioning away from fossil fuels and not enough on the economic opportunity presented.
“There (was) a very compelling report out just last week from Clean Energy Canada that looks at the employment impacts of the growing clean energy economy, and it found that 280,700 new jobs will be created in clean energy by 2030, far eclipsing the 125,800 jobs lost in fossil fuels by that date,” said Bachrach.
“The other piece the report doesn't look at is the long-term costs of climate inaction, and those are truly staggering,” he said. “If we don't take concerted action, the impact on our economy will be profound, and so we need to read the findings of this report in that context. Inaction is not an option at this point.”
Studying the impact of steadily increasing carbon taxes, the PBO found the two sectors that will be most affected are transportation and oil and gas. Under the output-based pricing system designed to help Canadian exports to stay globally competitive, a significant portion of oil and gas’s GHG emissions are shielded from the federal carbon tax.
“By next year, 80 per cent of its emissions will be exempt from the levy, but that share will decrease every year to reach 66 per cent by 2030. So that's why the oil sector won't be as hard hit as it otherwise would be in the absence of that output-based pricing system,” explained Giroux.
“We can't get to 2030 without addressing the elephant in the room, which is (that) oil and gas emissions grew 87 per cent from 1990 to 2019, and it’s currently the largest and fastest-growing source of greenhouse gases in Canada,” said Bachrach.
“It's not an easy conversation, but it's a vitally important one.”
The Department of Environment and Climate Change did not immediately return a request for comment Wednesday afternoon before publication deadline.
John Woodside / Local Journalism Initiative / Canada's National Observer
Comments
"the PBO says rising to this challenge would require an extra six million zero-emission vehicles on the roads by 2030 — which would require half of all vehicles sold from 2022 on to be zero-emission"
Or invest in public transit, cycling and pedestrian infrastructure, and smart urban design (halt sprawl) — and take millions of single-passenger vehicles off the road. A far better option that inexplicably remains off the table.
Cars would not be sustainable even if they ran on fairy dust. EVs have a huge footprint. Car culture drives urban sprawl. Neither is remotely sustainable. The private automobile and the sprawl they perpetuate are a costly detour away from sustainability.
What EV advocates propose is another environmental disaster — just a different one.
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Of course, the Trudeau Liberals will continue to ignore the elephant in the room and shield fossil fuel producers from carbon pricing. Canada's climate plan was written by the O&G industry.
I did a quick scan (and word search) of the report. There is nothing about public transit or active transportation. Nor is there any mention of the billions the federal government spends on urban highway and airport expansion - public money spent to increase GHG pollution. Another report that ignores the fact that the federal and provincial governments are ignoring their own climate policy - see Federal and Provincial governments ignoring commitments in https://www.nationalobserver.com/2020/03/04/opinion/make-2020-year-peak…