TIME TO REIN IN THE GREENHOUSE GAS THAT HAS SLIPPED THROUGH CANADA’S NET ZERO PLAN.
Methane far worse than carbon dioxide
For years, Canadian environmental and emissions policy has focused on carbon dioxide reductions with increasingly ambitious targets.
But the recent United Nations Intergovernmental Panel on Climate Change (IPCC) report on emissions could, and possibly, should inspire the country to leave its CO2 emissions targets in place and turn its attention to action on a different, more harmful molecule, CH4.
One molecule of CH4, better known as methane, is up to 86 times more greenhouse gas-intensive over a 20-year period than a molecule of CO2 for the atmosphere and contributes to degradation of the ozone layer. But experts say Canada, like other international governments, have focused policy decisions on CO2.
The IPCC report, released ahead of the 26th Conference of the Parties (COP26) climate change conference in Glasgow, U.K. and immediately ahead of a federal election in Canada is widely expected to result in new environmental policies and targets for both Canada and its trading partners.
The country has begun taxing CO2 at a rate that will increase to $170 per tonne by 2030, and has begun implementing a Clean Fuel Standard — which some industry observers fear could result in refinery shutdowns — as key planks of its net-zero emissions strategy by 2050.
Given these policies, Canadian business leaders are doubtful more steps will be taken to curb CO2 emissions, but see the potential for more action on the country’s CH4 emissions, especially in light of the IPCC report.
“The IPCC report, I think appropriately, had a strong focus on methane,” said Marla Orenstein, director of natural resources at the Canada West Foundation.
Currently, Canada has a methane reduction target of 40 per cent to 45 per cent below 2012 levels by 2025. Given there are no additional targets after that point, Orenstein said she wouldn’t be surprised to see some policy announcements on methane before COP26.
“I wouldn’t be surprised if there are more pledges coming out before the conference, particularly if we’re going to have an election on Sept. 20,” Orenstein said, referring to the Canadian federal election. “They can then go proudly to Glasgow, waving a flag above their heads. COP is an opportunity where every country wants to show off a little bit in terms of looking good.”
On the other hand, she’s not sure whether or not new or additional policies targeting CO2 emissions will be necessary given the steps Canada has already taken. Other business leaders share her view.
“Everything that I’ve seen is still talking about 2050 as our deadline. We knew that before and we’ve known that for quite a while,” said Stephen Poloz, former Bank of Canada governor and current Enbridge Inc. board director. “I just don’t see how this changes anything except for bringing an agglomeration of more evidence to the table and aside from persuading anyone that still doubts that humans are contributing to climate change.”
Poloz said the IPCC report continues to point to the same outcome: continued warming of the atmosphere unless action is taken to reduce emissions. He said there are several paths Canada can take to achieve its climate goal, including the widespread adoption of carbon-capture systems and dealing with methane from various sources, including landfills.
“If we were to clean up all the landfills and extract all the methane from them, we would solve a huge problem from an emissions standpoint. That’s got to be one of the things along this path,” Poloz said.
Canada has updated its 2030 CO2 emissions targets three times in less than a year from a previous target of 588 million tonnes to 503 MT and then down to between 401 MT and 438 MT, CIBC World Markets analyst Dennis Fong wrote in an Aug. 10 research report, noting the new target is a 45-per-cent reduction over 2019 levels.
“To say the least, this is an ambitious undertaking, given we are just over eight years away from 2030. Furthermore, we have yet to see any demonstrable year-over-year reductions in emissions in this country, excluding the declines during the pandemic, which were largely recession-driven,” Fong wrote.
Fong expects that much of the expected reduction in emissions will be focused on the oil and gas sector, which is actively seeking some federal assistance on projects like carbon capture, utilization and storage (CCUS) facilities and captured-carbon pipelines.
The Liberals have announced $120 billion for a transition toward “a more carbon-efficient economy; however, only 5 per cent is earmarked to oil and gas even though it is the largest emitting sector (26 per cent of emissions),” Fong wrote.
Earlier this month, Cenovus Energy Inc. president and CEO Alex Pourbaix said the federal government should help fund the oil and gas industry’s emissions reductions initiatives in an interview with the Financial Times.
However, capturing carbon will have a smaller effect on the atmosphere than prohibiting methane emissions, given the outsized greenhouse effect of methane.
“We will never be able to solve this in the time that we need to, in the next 20 years, trying to sequester carbon,” said Audrey Mascarenhas, CEO of Calgary-based cleantech company Questor Technologies Ltd., adding the world and Canada needs to make sure it’s solving “the right problem,” which is CH4 rather than CO2.
“Our low-hanging fruit right now is methane. Our methane concentration in the atmosphere has skyrocketed and it’s because we have underestimated it from all of our different industries, including oil and gas,” Mascarenhas said.
“We have no understanding of what our methane emissions are. Without clear regulations, our commitments aren’t worth the paper they’re written on,” she said.