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Trading Carbon : November 2011
Recent choices by the federal government suggest that it sees oil, not clean technology, as Canada's economic ace in the hole. That would explain Ottawa's decisions to support carbon capture and storage (CCS) technology, while cutting back on federal investments in renewable energy and energy efficiency. At a time when European and US decision makers face tough obstacles in any attempt to reduce GHG emissions, Canada's oil-friendly stance might seem like the most rational option. But failing to take ambitious action to tackle climate change is far from "risk-free", even from the perspective of allowing more oilsands expansion. According to a 2011 report from the Department of Energy Resources Engineering at Stanford University, industry-wide average GHG emissions for oilsands are approximately 23 per cent higher than conventional oil on a life-cycle basis. This includes emissions from extraction and upgrading, refining, transportation and end use. This information is critical to the EU's Fuel Quality Directive debate and the US' consideration of the proposed Keystone XL pipeline -- which would be the largest pipeline connecting the US with Canada's oilsands. The US Environmental Protection Agency has asked for more information about the government of Alberta's plans to reduce GHG emissions from oilsands. If Canada had better news to share about its effectiveness in cutting those emissions, its chances of persuading US decision-makers to allow the pipeline to proceed would almost certainly improve. But, over the years to come, increasing Canada's economic reliance on oilsands amounts to making a risky bet that the rest of the world won't take meaningful action on climate change. If that bet proves to be correct, Canada can keep on selling oil to its US neighbours -- and perhaps to other markets -- as long as it wants. The only risks the country faces are the potentially devastating consequences of global warming itself -- that, and continuing a Canadian tradition of never reaching its GHG emission targets. But, if Canada bets on the wrong side, and other countries do make the shift to clean energy, the pitfalls are potentially massive. All the capital that companies have sunk into oilsands -- and that Canadian citizens have supported through tax breaks to oil development -- would suddenly look like a dead end. Rather than selling China our oil, we could face a future where we're buying their state-of-the-art electric cars. If you talk to oilsands companies, you will often hear that they are developing the oilsands in response to the demand from customers, and that the problem really is the consumer. We agree that Canadians can and should do more to tackle climate change, such as drive our cars less and choose more fuel-efficient models, or vote for politicians who care about the environment and promise a shift to cleaner energy. But we shouldn't have to solve climate change alone: we need governments and companies to do their parts too. At the Pembina Institute, we've spent a decade proposing practical solutions that would allow Canada and Alberta to manage oilsands development more responsibly. To reduce GHG pollution, we are calling for Canada to adopt science- based emission targets and plans to meet them, a strong and growing price on GHG emissions, and regulations that require the use of technologies, such as CCS, where appropriate. For Canada's climate policy as a whole, the bottom line is really simple: we can't keep letting one sector's overheated growth steer the ship. Climate policy has to be designed to meet Canada's GHG targets in the smartest and most efficient way possible -- and that means all sectors, oilsands included, have to do their share. It's not too much to ask. And if we're going to have any chance of tackling global warming, it's the least we can do. l Clare Demerse is director of climate change and Jennifer Grant is the oilsands program director at the Pembina Institute, a Canada-based NGO Email: email@example.com 36 OPINION 900 850 800 750 700 650 600 550 Emissions (Mt of CO2) No government actions Current actions Canadian target = 607Mt Emissions reductions from current actions = 65Mt Additional reductions required = 178Mt (Aggregate provincial target = 625Mt) 1990 1995 2000 2005 2010 2015 2020 Figure 2: Scenarios of Canadian emissions to 2020 REUTERS/CHARLES PLATIAU November 2011 www.pointcarbon.com SOURCE: ENVIRONMENT CANADA
December - January 2011