Easier Ride for Fossils, But $9.1B in Climate Funding as Ottawa Releases 2030 Plan

Easier Ride for Fossils, But $9.1B in Climate Funding as Ottawa Releases 2030 Plan
April 6, 2022 The Energy Mix

By Mitchell Beer, The Energy Mix 

This story originally appeared in The Energy Mix and is republished here as part of Covering Climate Now, a global journalism collaboration strengthening coverage of the climate story.

The fossil and transportation sectors get a relatively free ride and electricity producers do the most to decarbonize in the much-anticipated 2030 Emissions Reduction Plan released March 29 by Environment and Climate Change Minister Steven Guilbeault.

The 271-page plan, mandated under the Canadian Net-Zero Emissions Accountability Act, charts a path for Canada to reduce its greenhouse gas emissions by 40%, from 739 to 443 million tonnes per year, between 2005 and 2030. That target hits the low end of the country’s 40 to 45% commitment under the Paris climate agreement.

Ottawa also sets an interim emissions target of at least 20% below 2005 levels by 2026.

Early responses to the plan called on Ottawa to improve on the 31% emissions cut it lays out for the fossil industry and commit to an overall target of 60% by 2030, Canada’s fair share of the international effort to hold average global warming to 1.5°C. Destination Zero Executive Director Catherine Abreu said the projected emissions from oil and gas fall short, leaving questions about how the government will hit an ambitious climate target.

“Because we’re so behind the eight ball, there’s still a big question around whether this is really what puts us on track to holding true to that 2030 goal,” she told the Toronto Star.

At the same time, the plan is earning points from climate policy analysts for its detail, transparency, and commitment to regular progress checks beginning in 2023, with Abreu calling it the “most granular” view ever of how Canada can meet its climate goals.

In its narrative, the government stresses the benefits of a full-on commitment to decarbonization, including 235,000 to 400,000 new jobs by 2030, lives saved and illness prevented due to cleaner air, and growth in cleantech’s contribution to GDP from $26 billion in 2016 to $80 billion in 2025.

“People marginalized through social, economic, cultural, gender, political, or other factors are disproportionately impacted by climate change,” the plan notes. “Taking action to decarbonize the economy and fight climate change provides an opportunity to address these inequities.”

Big-Ticket Items

The document promises C$9.1 billion in new investment, with big-ticket items that include:

  • $2.6 billion in incentives for zero-emission vehicles and infrastructure, with ZEV sales mandates for cars and light trucks of 20% by 2026, 60% by 2030, and 100% by 2035, and 35% for medium and heavy trucks by 2030;
  • A $2.2-billion renewal for the Low Carbon Economy Fund, including a $180-million Indigenous Leadership Fund;
  • $850 million for renewable electricity development;
  • $780 million for a Nature Smart Climate Solutions Fund aimed at conserving, restoring, and supporting carbon storage in the country’s wetlands, peatlands, and grasslands;
  • $470 million for an On-Farm Climate Action Fund to help producers adopt practices like cover cropping, rotational grazing, and fertilizer management, plus $150 million to support carbon sequestration and climate adaptation on farm landscapes (the plan also affirms Ottawa’s commitment to a 30% reduction in nitrous oxide emissions that is not sitting at all well with the fertilizer lobby);
  • $458.5 million in new funding for the low-income stream of the Canada Greener Homes Loan program;
  • $200 million to accelerate deep energy retrofits;
  • $194 million for industrial energy management, including funds for carbon capture, utilization and storage (CCUS) development;
  • $183 million to support a “decarbonized and climate resilient construction sector”;
  • $33 million to support mass, deep energy retrofit projects based on the Energiesprong model.

The plan also recommits to a $2-billion Futures Fund, first announced in October 2021, to support jobs and economic diversification in the oil and gas provinces of Alberta, Saskatchewan, and Newfoundland and Labrador.

Items left out of yesterday’s announcement include a regulated cap on oil and gas emissions and a federal just transition act that are both still out for consultation, and a tax credit for carbon capture, utilization and storage that will be included in this year’s federal budget. The document reiterates the government’s plan to steadily increase its floor price on carbon to $170 per tonne by 2030, and stresses the role of sustainable finance in delivering on a carbon reduction agenda.

“Sustainable finance initiatives can help crowd-in needed private investment and amplify existing climate policy signals in a business-friendly manner,” it states. “Sustainable finance also enables the mobilization and alignment of private sector investments towards climate and environmental objectives and promotes financial stability related to climate risk,” while climate-related financial disclosure “is essential to reflect the risk of climate change in financial markets.”

The plan doesn’t include a budget breakdown, nor does it indicate whether the funding will be handed out over one or multiple years. Yesterday, the government announced that Finance Minister Chrystia Freeland will deliver the 2022 budget on April 7.

Electricity Carries the Load, Fossils Get a Break

The details in the Emissions Reduction Plan indicate that not all sectors are equal in their expected contributions to the 2030 pledge.

  • Electricity accounts for only 8.4% of the country’s 2019 emissions, but nearly 40% of the reductions in the plan.
  • Oil and gas, with 26% of 2019 emissions, is only asked to deliver 18.7% of the emission cuts.
  • Transportation, with 25% of 2019 emissions, accounts for only 6.4% of the carbon savings by decade’s end.

Overall, the plan projects 2030 emission reductions of 88% from 2005 levels for electricity, 49% for waste, 39% for heavy industry, 37% for buildings, 31% for oil and gas, 11% for transportation, and 1% for agriculture. The plan restates the government’s promise to reduce oil and gas methane emissions 75% by 2030.

Even within the fossil sector, the document lays out winners and losers. It projects emissions reductions of 53% in natural gas production and processing, 36% for conventional oil production, and 52% for refining and distribution. But emissions from the tar sands/oil sands rise 56%—including a mind-bending 170% for mining and extraction and 132% for “in-situ” techniques to recover bitumen deposits that are too deep in the ground to be mined.

‘Oil Lobbyists Have Had Their Time’: Trudeau

In a speech to the GLOBE 2022 conference in Vancouver, Prime Minister Justin Trudeau cast the plan as a shift away from fossil industry influence, the Toronto Star reports. “Big oil lobbyists have had their time on the field,” the PM said. “Now it’s over to the workers and engineers who will build solutions for their sector, for their communities, and for their kids.”

But the Star says Guilbeault pointed to modelling for the plan that incorporated the Canada Energy Regulator’s assumption that the country’s fossil fuel production will increase through 2032. When the CER released that projection in December, analysts warned that it set Canada up for “climate failure” and called it “wildly optimistic” to expect the regulator to properly model a net-zero future.

At the same time, the plan says it’s time for the fossil industry to do its share to get the country’s emissions under control. “With energy demand and prices rebounding to pre-pandemic levels and a tightening global energy market, Canada’s oil and gas industry is currently generating record cash flow,” it states. “If deployed strategically, these funds could enhance carbon competitiveness and enable the sector to do its fair share in contributing to the country’s climate goals.”

Reaction to the federal announcement ran the gamut of the hits and misses in the 2030 plan.

A ‘Watershed Moment’, But Fossil Targets Too Low

“This is a watershed moment for Canadian climate policy,” said Rick Smith, president of the Canadian Climate Institute. “For the first time ever, Canada has a comprehensive and detailed plan for meeting its emissions reduction targets.”

But “a plan is just a plan without action. Expedited implementation will be key to success, and Canada now needs to shift into high gear.”

“This plan is critical to ensuring a climate-safe future, energy security, and issues around affordability,” said Simon Dyer, deputy executive director of the Pembina Institute. “However, the ERP points to a reduction target for oil and gas sector emissions that is too low.” Dyer and others pointed to the forthcoming oil and gas emissions cap to improve on yesterday’s announcement.

Clean Energy Canada Executive Director Merran Smith called the plan “an excellent step forward”, pointing to funding for emission reductions in the fossil and transportation sectors as “a sign of a serious commitment by the government”.

Tzeporah Berman, international program director at Stand.earth, said it’s a “step in the right direction for the government to be setting specific oil and gas sectoral targets to reduce emissions for the first time.”. But “as a result of big oil’s relentless lobbying, the sectoral targets are set too low and must go up if oil and gas is to do their fair share.”

Environmental Defence Canada Programs Director Keith Brooks, agreed that “this plan lets the oil and gas sector off from doing its fair share. Avoiding catastrophic climate change requires winding down production of oil and gas over the next decade.”

Berman and Brooks both pointed out that the lower target for fossil emissions reductions leaves the rest of the economy to pick up the slack.

“Tackling climate change must be a team effort, but the plan released today shows that some players are still sitting on the bench,” said Caroline Brouillette, national policy manager at Climate Action Network-Canada. “The 2030 Emissions Reduction Plan offers greater detail and transparency than any Canadian climate plan to date, but fails to seize the urgency of the moment.”

“The Emissions Reductions Plan released today provides a more detailed roadmap for achieving the lower end of our 2030 target, which will help us hold government’s feet to the fire if things start to go off the rails,” said Anna Johnston, staff counsel at West Coast Environmental law. “Hopefully we stay on track, and even increase our ambition to the 60% reduction needed for us to do our global fair share.”

“We welcome new investments in the protection and restoration of Canada’s forests and other climate-critical ecosystems,” said Nature Canada Executive Director Graham Saul. “However, we are deeply disappointed that the plan fails to commit to action to more accurately measure and report the significant greenhouse gas emissions associated with industrial logging in Canada, or outline any actions to reduce these emissions.”

“We’re happy to see that the government is committing significant funds to help farmers play their part in the fight against climate change, but the plan calls for just a 1% reduction in agricultural emissions by 2030,” said Farmers for Climate Solutions Director Brent Preston. “That’s not enough. Farmers want to do more.”

Auto industry groups said they needed more clarity and focused action on the government’s plans, CBC reports.

“We need some assurance that the consumer is going to join us on this ride, and at this point that is not entirely clear,” said David Adams, president and CEO of Global Automakers of Canada.

“Government efforts to improve electric vehicle charging infrastructure, enhance purchase incentives and educate consumers will determine whether or not Canada will keep pace,” added Brian Kingston, president and CEO of the Canadian Vehicle Manufacturers’ Association.

But ChargePoint Inc., the biggest network of electric vehicle charging stations in North America and Europe, said it was ready to roll on the plan.

“Transportation electrification can deliver significant emissions reductions in one of Canada’s largest emitting sectors,” ChargePoint Canada Director of Policy Suzanne Goldberg said in a release. “There is a lot to do on the road to 2030, and we look forward to working with the Government of Canada on implementing its ambitious plans.”

Catch more news at Great Lakes Now: 

Energy News Roundup: Weatherization money going to states for low-income homes, misinformation derails energy projects

What Michigan can do as global report details ‘closing window’ on climate

Featured image: Lake Superior waves crashing on the Duluth Lakewalk. (Photo Credit: Great Lakes Now)


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