Expert group says Canada needs a national carbon budget to meet climate targets

An arms-length expert group is calling on the federal government to introduce a national carbon budget to guide the transition to a sustainable future. 

On Thursday, the Net Zero Advisory Body (NZAB), an independent expert group tasked with advising the federal government on climate policy, published a report calling for a reduction of 50 to 55 per cent of emissions relative to 2005 levels by 2035, and said carbon budgets, which are successfully used by the United Kingdom, New Zealand, Denmark and others, would be a crucial tool Canada could use to achieve the goal. 

Carbon budgets determine the total amount of greenhouse gas emissions that could be permitted over a period of time to limit global warming. Like a household budget individuals and families use to understand how much money they could spend in a given month, a carbon budget can be used to understand what emissions could be created while still meeting reduction goals.

Think of it this way: because climate scientists can determine global temperature increases depending on how much carbon dioxide is in the atmosphere, they can also reverse-engineer targets to avoid crossing dangerous temperature thresholds. 

Because a climate-safe future will have to limit the amount of carbon dioxide pumped into the atmosphere, a carbon budget can also help determine where the hard choices need to be made — and in Canada, experts say the oil and gas industry should be high on that list. 

“The oil and gas sector is taking up an increasing share of Canada's carbon budget as other sectors of our economy shrink their share of the carbon budget,” said Catherine Abreu, a member of the Net Zero Advisory Body, in an interview with Canada’s National Observer. “And we're not really having the conversation about whether that choice we are making is one we intend to make.”

Steep cuts needed

According to the Global Carbon Project, global CO2 emissions in 2023 were 40.9 billion tonnes. If emissions were to continue at that level, the world would breach the Paris Agreement’s goal of holding global warming to 1.5C above pre-industrial levels in about seven years. That means to avoid crossing that dangerous 1.5C threshold, where new levels of catastrophic warming would be locked in, the amount of CO2 pollution each year must significantly decrease.

“Once we determine the global estimate of what the world can emit… then we can carve out what is the share for Canada within that global carbon budget,” Abreu said. Once Canada’s share of a global carbon budget is understood, “that helps us understand what our operating room is in terms of what we can emit, and what emissions that we have to be reducing.”

“In the same way that your household budget helps you make choices about where you spend your money, a national carbon budget helps us make choices about where we are allocating our shrinking budget of carbon dioxide emissions.”

The NZAB is recommending Canada set a national carbon budget through 2050 of 10,198 to 11,034 million tonnes of CO2e (CO2 equivalent, a term used to combine various types of greenhouse gas emissions). Based on Canada’s most recently available emission estimates, that means the country could only sustain about 15 more years of emissions at current levels before the budget is wiped out. 

In other words, steep emissions reductions are required to stretch the national carbon budget out to 2050 when Canada aims to reach net-zero. 

Abreu says a national carbon budget would clarify the consequences of policy choices. According to official government assessments, and independent estimates from the Canadian Climate Institute (CCI), Canada is beginning to see year-over-year emissions reductions, but emissions from the oil and gas industry continue to grow.

According to the CCI, last year oil and gas emissions were up 1 per cent from 2022, accounting for 31 per cent of Canada’s total. While the oil and gas industry’s emissions have grown, emissions from the electricity sector have plummeted 62 per cent since 2005. 

Abreu says these are precisely the tradeoffs a carbon budget can help bring into focus. 

A ‘disappointing’ public conversation

Much of the public debate about climate change policy has orbited around the fate of the federal carbon price, rather than whether it’s fair to expect some sectors of the economy to cut emissions, while other sectors don’t carry the same burden, Abreu said.

“It's so disappointing to see the state of the political conversation in Canada right now,” she said. “I hope a lot of Canadians feel as angry as I do that we have political leaders in this country who are still willing to turn what is an existential threat into a political football.”

If Canada were to adopt the NZAB’s recommendation to cut 50 to 55 per cent of emissions by 2035, it would still lag behind other countries in ambition. The United States is already aiming for a 50 to 52 per cent cut by 2030, as it develops even stronger 2035 emission reduction goals, while the UK is aiming for a 78 per cent reduction from its 1990 levels by 2035.

The European Union is still developing its new targets, but is considering a goal of slashing 90 per cent of its emissions (relative to 1990 levels) by 2040. 

To date, Canada has only achieved a 7.1 per cent reduction from 2005 levels, according to the latest government estimates.

In an exchange with the CBC earlier this week,  Environment and Climate Change Minister Steven Guilbeault said it’s important to understand how a target could be achieved before setting it. 

“I am not a big fan of setting targets where we have no idea how we get there. I think it is counterproductive and discourages people,” he said. “So, we need to find this right balance between ensuring it is ambitious but achievable. 

“There is a lot of innovative thinking in the NZAB report and we will look at it carefully.”