Greenhouse gas (GHG) emissions, which are caused by the burning of fossil fuels, are exacerbating the climate crisis. Not only is climate change causing extreme weather events that leave death and destruction in their wake, but it is also impacting every aspect of our day-to-day lives, including the economy, agriculture and public health.
To mitigate the climate crisis, protect ourselves and build a more resilient society, the federal government must tackle Canada’s most polluting sector head on: the oil and gas industry, responsible for 28.2% of national GHG emissions.
A regulatory framework, which should be out by the end of 2024, will aim to cap the industry’s emissions. Canada cannot achieve its climate targets without requiring major emitters do their part.
The oil and gas industry is responsible for 44% of Canada’s methane emissions. Methane is a gas that is 70 times as polluting as CO2.
While a survey reveals that 80% of Quebeckers support this type of measure, the regulatory framework has come under heavy fire from the fossil fuel sector. We are seeing more and more information challenging these regulations and branding them as ineffective and overly restrictive to encourage true climate action.
So what do the facts tell us?
First, what do the regulations capping GHG emissions from the oil and gas industry consist of?
They entail a cap and trade system: each company affected by the regulations must stay under its specific emissions limit, but if it is unable to do so, it will have to pay.
This system covers all oil facilities, regardless of size.
Thus, the effect of the regulations is to discourage companies from emitting more GHG.
How will capping emissions impact Canada’s economy?
As we know, the large oil companies have made record profits in recent years. In Canada, they made nearly $40 billion in profits in 2022, in addition to receiving sizeable federal subsidies straight from taxpayers’ pockets. This is money that could benefit all of Canadian society if it were invested instead in decarbonizing the economy and creating new job opportunities for workers.
An emissions cap and the attendant reduction in GHG emissions would help cushion the blow from climate change, which is costing us dearly.
Will the regulations lead to massive job losses?
Thanks to the recently passed Canadian Sustainable Jobs Act, jobs and communities that depend on the fossil fuel industry should have the means and support to transform their sector. This transition should lead to decent, sustainable jobs in such sectors as clean energy, which is expected to grow by nearly 50% and number 639,200 jobs by 2030.
Significant investments in infrastructure and clean technologies are also provided for in the 2030 Emissions Reduction Plan to facilitate this transition.
Will the emissions cap enable us to reduce emissions enough to achieve our climate objectives?
Yes. Similar cap and trade systems have been successfully used to reduce GHG emissions in a number of countries and regions, like California, which has seen a drop in emissions alongside continued economic growth.
But to be successful, the regulations must be ambitious and rigorous. Équiterre and its partners recommend that the regulations:
- Align with the climate science and Canada’s GHG emissions reduction target for 2030;
- Avoid loopholes that would allow the fossil fuel industry to skirt its obligations;
- Take effect as soon as possible (not later than 2025).
So, yes, emissions from the fossil fuel industry must indeed by capped!
For decades, the fossil fuel industry has been raking in the profits, knowing full well that oil and gas are causing the climate crisis. Thus, it is partly to blame for the consequences of the crisis we are currently living through. And yet its efforts to limit emissions are neither sufficient nor sufficiently timely. In recent years, oil and gas production has steadily risen, generating an increase in GHG emissions. For example, between 1990 and 2022, oil sands emissions have risen by 467%!
Consequently, the government must put in place binding rules so that these companies do their part and spare taxpayers from having to pick up the tab.
Analyst, Climate and Energy policy
