Climate goals a challenge to achieve: budgetary watchdog

Canada faces a challenge hitting its 2030 target to cut carbon emissions 40 to 45 per cent below 2005 levels because of the speed and scale of changes needed to decarbonize the economy, the country's independent budgetary watchdog said Wednesday.

The assessment from Yves Giroux, the parliamentary budget officer (PBO), underlines the difficulties facing the world's fourth-largest oil producer as it seeks to slash emissions within a decade.

Prime Minister Justin Trudeau announced the tougher emissions target of 40 to 45 per cent in April but without details of how the government plans to meet that goal. Before the beefed-up target was unveiled, Canada had announced policies to achieve emissions cuts of 36 per cent by 2030.

Canada's highest-polluting sectors are transportation and oil and gas.

The PBO report said “extraordinary measures” would be needed to achieve the new target and to widely deploy necessary technologies such as electric vehicles and small-module nuclear reactors for the oilsands.

“While technologies to achieve this reduction are currently available, the scale and speed of the changes will make it challenging to achieve,” the report said.

The report also assessed the effect of federal policies targeting a 36 per cent cut by 2030, including the flagship carbon levy of $170 a tonne and other “non-price” policies such as building retrofits and transportation subsidies.

It found the combined measures would cost the equivalent of a carbon levy of $211 a tonne and reduce Canada's real GDP by 1.4 per cent by 2030, although the report stressed climate change itself would have potential costs and that unforeseen breakthrough technologies could reduce the economic effect.

“Our assessment shows that the largest economic impact of reducing emissions will fall on the transportation and oil and gas sectors,” Giroux said in a news release.