Amid pressure from the International Energy Agency to stop investment in new oil and gas developments, Canada’s oil and gas industry needs a strategy to reduce GHG emissions domestically and in exported products.
Fraser Thomson, a lawyer at Ecojustice whose work mainly focuses on the impact of fossil fuel operations on communities and the environment, offers an opinion, in the National Observer, that Canada must account for the GreenHouse Gas (GHG) emissions from its exported fossil fuels.
Climate action at home, while necessary, will be insufficient to address, or even begin to reduce, how Canadian fossil fuel exports are exacerbating the climate emergency globally. Canada can choose to stop making things worse. It should. The formula is simple: Count exported emissions and take responsibility for them by reducing fossil fuel exports. If we don’t account for what we put out into the world, we know what will happen. These emissions will come back to haunt Canadians in the form of scorching heat waves, disastrous flooding and choking wildfires in the years and decades to come.1
Emma Grane, energy reporter for the Globe and Mail, writes about a new report from the International Energy Agency that declares investment in any new oil and gas developments must stop immediately, electricity should be 90 per cent renewable by 2050, and governments must “close the gap between rhetoric and action” if the world is to meet its goal of net-zero emissions and limit the worst impacts of climate change. The International Energy Agency recommends no investment in new fossil fuel supply projects or coal plants without carbon-reduction technology, starting today.
Fatih Birol, the IEA’s executive director, pulled no punches in his introduction to the report, writing that meeting net-zero goals “requires nothing short of a total transformation of the energy systems that underpin” economies around the world. “We are in a critical year at the start of a critical decade for these efforts,” he said. “Despite the current gap between rhetoric and reality on emissions,” he said the road map shows that there are still pathways to reach net zero by 2050. But he also warns that those pathways are “narrow and extremely challenging,” and will require governments, businesses, investors and citizens “to take action this year and every year after so that the goal does not slip out of reach.”2
Joe Chidley of Postmedia Content Works asks can a higher carbon tax lead to bigger greenhouse gas reductions from Canada’s oil-and-gas producers? The reasons go beyond PR and the companies’ stated commitments to “environmental stewardship.” For one, a tax that hits producers and consumers spreads the burden of carbon costs to where the fuel is burned — and most emissions by far are generated when the fuel is used rather than produced. Politically, a tax might blunt policymakers’ will for potentially more restrictive industry-specific environmental regulations down the road.
Global investors, meanwhile, are increasingly attuned to the principles of ESG (environmental, social and governance benchmarks), and large publicly traded oil producers are being forced to respond to a growing activist investor base. There is also an export incentive: to the extent a tax could lead to lower-carbon products, it could help keep vital export markets in the U.S. open and give access to new ones in an increasingly carbon-conscious global market. That could be crucial to the future of the industry, because while demand for fossil fuels will continue, it will eventually decline; one solution to the problem of customers buying less from you is to find more customers.3
The effort to avoid climate catastrophe includes ideas for no new oil and gas spending and a carbon tax to spur innovation in Canada’s energy sector.
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