U.S. action on climate amplifies leadership vacuum in Ottawa

Coal-fired power plant in Battle River, Alberta

Coal-fired power plant in Battle River, Alberta. Photo: Ben Thibault, Pembina Institute.

"For the sake of our families’ health and our kids’ future, we have a moral obligation to act on climate….The science is clear. The risks are clear. And the high costs of climate inaction keep piling up."

That’s what Gina McCarthy, head of the U.S. Environmental Protection Agency (EPA), said this week as the Obama administration unveiled its significant plans to tackle carbon pollution from coal-fired electricity generation. Those plans include a commitment to reduce electricity emissions by 30 per cent below 2005 levels by 2030, and strong targets for near-term reductions by 2020.

While the substance of the announcement was impressive, the political visibility and leadership shown by Obama and McCarthy is equally noteworthy. It is almost impossible to imagine Prime Minister Stephen Harper or his increasingly invisible environment minister, Leona Aglukkaq, making a similar speech in Canada — and that disconnect speaks as loud as the data on Canada’s actual climate change performance.

Climate change has always been a low priority for a federal government that views even limited greenhouse gas pollution controls as an impediment to its oilsands expansion goals. Yet Harper responded “with a shrug” to the EPA announcement, claiming the U.S. administration was “acting two years after this government acted and taking actions that don't go near as far as this government went." If only that were true.

Fact-checking Canada’s coal “leadership”

While Canada did introduce federal coal regulations in 2012, the regulations have a long phase-in period that allows some of Canada’s coal plants to operate clear through the middle of the century, without any greenhouse gas controls whatsoever. This was a timid response to addressing greenhouse gas emissions from the coal sector, and it will be 2030 before it amounts to significant emissions reductions.

The U.S. proposal is far more effective at reducing greenhouse gases from electricity generation in the short term, compared to business as usual. Analysis suggests the EPA rules would reduce power sector emissions by an estimated 23 per cent below business as usual by 2025, compared to five per cent from Canada’s federal regulations (according to Environment Canada’s own numbers).

Should Canada (and particularly Alberta, which has an electricity mix that is more reliant on coal and higher-emitting sources than the U.S. average) strengthen its own treatment of electricity generation to harmonize with our neighbours to the south? Lots of opportunities exist, particularly in Alberta and Saskatchewan, to treat coal more seriously. But Canada will need to offer more than evasive rhetoric if it is to get on track.

Out of step despite shared climate target

Many analysts think tackling coal puts the U.S. within striking distance of meeting its international greenhouse gas reduction commitments agreed to in Copenhagen in 2009, and sets the foundation for resumption of carbon reduction talks between the world’s other leading economies: China and the EU. Canada, meanwhile, is set to miss its international promise by a country mile.

 Canada's emissions performance relative to Copenhagen target

The reason Canada and the U.S. are on different trajectories is because our economies are very different. For the U.S., the biggest climate challenge has been coal emissions, and with these new EPA changes, America is tackling this challenge head-on. In Canada, our Achilles’ heel is the oilsands — and yet, instead of taking responsibility for how far off track we are, our government responds to the U.S. moving forward by pretending we’re well ahead of the game. 

Industry projections for oilsands growth by 2025 will result in the production of “wells to tank” lifecycle greenhouse gas emissions equivalent to building 100 new coal plants in the next decade.[1] Reining in emissions from these oilsands projects is something Canada is responsible for.

Chart comparing Canadian and US emissions by sector

The U.S. doesn’t have an oilsands sector, and the carbon intensity of our oilsands extraction is much higher than U.S. oil production. So different rules will need to be developed anyway. It makes no sense for Canada to wait for the U.S. EPA to tell us what our emissions rules should be for the oilsands.

Delay tactics harming industry competitiveness

Arguing that Canada cannot regulate its oil and gas industry without action in the U.S. is also nonsense.

The oilsands sector already deals with a large number of factors — wages, royalties, capital costs and oil and natural gas price variances — that are many orders of magnitude more material than the proposed regulations the Canadian and Alberta governments have discussed but not implemented. Those regulations would impose a penalty of 5-to-8 cents per barrel on companies that choose to pay rather than reducing their emissions.

The federal government is needlessly tarnishing the reputation of the Canadian oil and gas industry and threatening its market access by failing to address the sector’s climate impacts. Being a high-carbon producer with a negative environmental reputation is a major competitiveness risk. Efforts to gain approval for the Keystone XL pipeline — the fate of which is far from certain — have seen no help from the federal government’s stubborn refusal to regulate carbon pollution from the oilsands production required to fill the pipe.

And if we won’t regulate, others may. Looming on the horizon is the threat of border carbon adjustments by the U.S., where lawmakers could seize on the opportunity to favour domestic tight oil production at the expense of higher-carbon oil from Canada.

Your move, Canada

Claiming Canada needs to harmonize with the U.S. on oil and gas regulations is a delay tactic, nothing more.

The result is that that the harmonized target that the U.S. and Canada agreed to after Copenhagen in 2009 is still within reach for the U.S., while Canada is set to miss it by a large margin. By claiming to wait for the United States to act on a very small proportion (around six per cent) of its emissions, Canada is refusing to act on a quarter of its own — including the oilsands, the fastest-growing source of emissions in the country.

Will Canada make the next move? The EPA’s announcement this week paints the relative aspirations of Canada and the U.S. in stark contrast. Substance matters when it comes to energy and environmental policies to address climate change, and so does political leadership.

On both counts, Canada is failing badly.

[1] Based on the number of proposed, announced and under-construction oilsands projects due online by 2025 (Oilsands Review database 2014) and wells to tank emissions calculated using GHGenuis, oilsands expansion will result in an additional 301 Mt of CO2 emissions annually. This is equivalent to the emissions from 100 coal-fired electricity units. If production emissions only are considered, this is equivalent to 37 coal-fired electricity units.