(Ottawa) How should the most polluting sector of the Canadian economy go about reducing its greenhouse gas (GHG) emissions? The Ministry of Environment and Climate Change is launching a consultation on Monday to determine whether a carbon exchange or carbon tax will apply to the oil and gas industry, learned La Presse.
Posted at 9:07
It is one of the “biggest pieces” of the 2030 Emissions Reduction Plan, according to a source in the office of Environment Minister Steven Guilbeault, who was not authorized to speak publicly. The plan unveiled in March calls for a reduction of GHGs emitted by the oil and gas industry by 31% below 2005 levels by 2030.
The government has still not defined how many megatonnes of climate change gas this represents and it will not do so during this consultation. “Let’s focus on choosing the best system and when we have chosen the best system, then we will talk about the level,” she argued.
Regardless of the level at which it is set, this “cap will be emissions-based and will not concern oil and gas production”, underlines the ministry in a briefing document. “It will maximize opportunities to invest in the decarbonisation of the sector while taking into account evolving energy security considerations. »
A coalition of environmental groups, including Équiterre and the David Suzuki Foundation, is instead calling for a reduction in the production of oil from the tar sands. The Canadian Association of Petroleum Producers rejects the idea of having an emission cap imposed by regulation. These organizations have submitted briefs to the House of Commons Standing Committee on Natural Resources, which has been studying the issue since February.
The Ministry of Environment and Climate Change will choose between two options: a carbon exchange like that of Quebec or the imposition of a carbon tax. In either case, the preferred option would apply in particular to the oil and gas industry.
For example, only players in this sector would participate in the carbon exchange which would allow them to trade credits to ensure that it is effective. “We want to make sure that the emissions come from that sector,” our source said. The carbon tax could be revised if it is not high enough for this sector to reach its target, should that be the preferred option.
The cap that will eventually be set will take into account the regulation on methane, one of the GHGs, under which industry must already reduce emissions of this gas by 75% by 2030. The consultation will end on September 21 and the chosen model will be presented at the beginning of 2023.
This approach does not concern the subsidies received by the oil and gas industry, which have been repeatedly criticized by the Bloc Québécois and the New Democratic Party.
This industry produced 27% of GHG emissions in 2020, earning it the title of most polluting, according to the Ministry of Environment and Climate Change.
The 2030 Emissions Reduction Plan calls for an overall reduction of 40% to 45% of GHGs by 2030 below 2005 levels. Canada is one of 195 signatory countries to the Paris Climate Agreement to limit global temperature rise to below 2°C and preferably 1.5°C.
Just over a year ago, Justin Trudeau’s government passed the Carbon Neutral Accountability Act to achieve this. The ultimate goal is to achieve this carbon neutrality in 2050. The first progress report must be tabled in the House of Commons and the Senate in 2023.