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Trading Carbon : November 2011
34 OPINION These days, you can't talk about the oilsands without climate change coming up in the conversation. The massive development that is reshaping parts of the province of Alberta attracts criticism like no other project in Canada. Those concerns don't stop at the country's borders -- nor do the impacts. Government decision makers in the US and the EU are evaluating the risks associated with "dirty oil". Oil that conflicts with developed countries' international commitments to reduce greenhouse gas (GHG) pollution and the broader global transition to a low-carbon and low- impact clean energy future. As the oilsands' public profile has grown, some have argued that the sector is being unfairly targeted. After all, oilsands account for less than 7 per cent of Canada's total GHG pollution -- far less than the emissions from coal, transportation or heating homes. But, in addition to concerns around toxic material from tailings waste, the impacts on wildlife, the consequences of an overheated economy and local air pollution, oilsands tr uly do matter when it comes to Canada's approach to tackling climate change. This past summer, Canada's environment ministry released up-to-date projections of GHG pollution under a "business-as-usual" (BAU) scenario -- Canada's emissions future unless governments take stronger actions than they have to date. The picture it paints of where oilsands emissions are heading is, to put it mildly, not pretty (see figure 1). Over the last two decades, GHG emissions from oilsands have grown by over 150 per cent. And Environment Canada's numbers show emissions growing from 2005 to 2020, with oilsands tripling to 92 million tonnes of carbon dioxide equivalent (Mt CO2e) in 2020 from 30 Mt in 2005. That represents 12 per cent of Canada's projected national emissions in 2020, more than the total for any individual Canadian province except Alberta and Ontario. That makes the oilsands sector unique. In other parts of Canada's economy, emissions are expected to grow more slowly, or even to drop, as technologies improve or federal or provincial emission reduction policies take effect. Most notably, electricity emissions are expected to fall by 31 Mt of CO2e in Canada by 2020 in the absence of new government policies. It is worth noting that the federal government has already outlined a regulatory approach to coal-fired electricity. This is detailed enough to be included in Environment Canada's BAU projections, while the projections don't include an equivalent federal policy approach for oilsands. Overall, Canada's emissions are projected to increase by 54 Mt between 2005 and 2020. Emissions from oilsands -- including emissions from upgrading -- are projected to grow by 62 Mt over the same period. Because the ups and downs in emissions from other sectors largely cancel each other out, the bottom line is that virtually the entire projected increase in Canada's emissions between 2005 and 2020 will come from oilsands. From 2005 to 2020, oilsands are projected to be responsible for 388 per cent of the increase in industrial emissions. In other words, from 2005 to 2020, emissions from oilsands are projected to grow nearly four times more than Canada's industrial emissions as a whole. Clearly, the oilsands sector is a real outlier. If that projected oilsands growth does take place, it's going to make hitting Canada's 2020 emissions target difficult -- a 17 per cent reduction below 2005 levels (606.7 Mt of CO2e). Worse, the country is starting from a position Oilsands Matter CLARE DEMERSE AND JENNIFER GRANT OUTLINE THE IMPACT OILSANDS HAVE ON CLIMATE POLICY IN CANADA Emissions from oilsands are projected to grow by 62 Mt of CO2 between 2005 and 2020 Jennifer Grant Clare Demerse November 2011 www.pointcarbon.com
December - January 2011