Is the Federal Government’s Proposed Climate Test Impossible to Fail?

This op-ed appeared in the Vancouver sun on May 4, 2016 under the title Opinion: Ottawa Must Clarify Climate Test


Prime Minister Justin Trudeau recently joined over 170 countries in New York to sign the Paris Climate Agreement on Earth Day. Soon after, Trudeau reiterated his government’s commitment to “getting Canada’s resources to market” via new pipelines. Can Canada reconcile expanded fossil fuel production with significant reductions in greenhouse gas emissions?

Enter the “Climate Test.” Although assessments of pipelines launched by the Harper government precluded consideration of climate change, the Trudeau government has promised an additional review of those projects’ climate impacts.

This is a critically important undertaking. Production of fossil fuels accounts for most of Canada’s emissions growth since 1990. Canada’s ability to meet its commitment to reduce emissions to 30 per cent below 2005 levels by 2030 is inextricably linked to future developments in the oil industry.

In March, the federal government released a draft climate test for comment. Emissions released in getting oil to the pipeline, including from mining and upgrading, are to be estimated. That total then will be compared to the emissions that would be expected in the absence of the pipeline.

The proposal falls short in three important respects.

First, the test will consider only “upstream” emissions associated with oil production, not the “downstream” emissions that occur when that oil is burned.  The latter constitute over 80 per cent of the emissions associated with a barrel of bitumen. It is true that by international convention each country is legally responsible only for the emissions that occur within its borders.

Nonetheless, there is an economic reason to be attentive to downstream emissions from Canada’s exports.  When the countries to which we export seek to reduce their own emissions, demand will fall and our high-cost oil is likely to be the first to go.

A second limitation concerns emissions assumed in the absence of a proposed pipeline.

Consider Trans Mountain’s application to build a second pipeline from Alberta to Burnaby. The business case for the pipeline is based on the Canadian Association of Petroleum Producers’ optimistic prediction of steadily increasing oilsands production. Trans Mountain further asserts that that level of production will occur regardless of whether new pipelines are built, based on a debatable assumption that all the oil will otherwise be transported by rail.

The implication of Trans Mountain’s baseline scenario is that the pipeline would have virtually no impact on Canada’s emissions. However, that conclusion was subtly baked into the analysis from the outset.

An alternate assumption, that additional pipeline capacity will result in expanded production, yields a radically different conclusion: a carbon footprint of the Trans Mountain pipeline equivalent to adding two million cars to Canada’s roads. Alas, the federal proposal offers no guidance as to which scenario should be used, even though the choice of emissions baseline has huge implications for a project’s estimated climate impacts.

Third, the proposed climate test is silent on how the government will weigh an emissions increase from any single project against Canada’s national target. In theory, a project yielding annual emissions up to the national target could be approved if Canada shut downs every other source of emissions nationwide. That is of course unrealistic, but it illustrates the challenge of establishing a test for individual projects in the context of a national target.

The federal government must clarify the principles that will guide its decisions as to whether projects pass or fail the climate test. One could estimate what carbon price would be needed for Canada to meet its emissions targets in 2030 and beyond, then ask whether the proposed development would be economically viable under that scenario. Alternatively, one could predict the international prices needed over time to meet Canada’s goal of limiting climate change to 2C, again asking whether the project is consistent with that scenario.

To do otherwise is to continue the decades-long disconnect between Canada’s economic policies and environmental commitments — all justified by a climate test that may be impossible to fail.

Kathryn Harrison is a professor of political science at the University of B.C.

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