The Trudeau Liberals’ road map to net zero emissions would cost the Canadian economy at least $45 billion annually by 2030, according to a newly-released report by a Canadian think tank..The Fraser Institute (FI) study Canada’s GHG Cap Imposed on the Oil and Gas Industry is All Pain With No Gain, written by Kenneth P. Green suggests Canada’s economy will suffer greatly with almost zero help to the environment thanks to legislation passed in 2021..In 2021, the Government of Canada enacted the Canadian Net-Zero Emissions Accountability Act, more commonly called “Net-Zero Emissions 2050.” In the interim, the 2030 Emissions Reduction Plan would require of the oil and gas industry “emission reductions to 31% below 2005 levels in 2030 (or to 42% below 2019 levels).”.The 2021 plan projected GHG emissions from the oil and gas sector would rise from 179 megatons in 2020 to 187 megatons if the government did nothing. The 2030 plan would require oil and gas emissions to be 110 megatons. Meanwhile overall emissions would be reduced from 648 to 447 megatons..The FI used an extreme scenario to illustrate why targeting oil and gas would accomplish little. Even if all oil and gas emissions were eliminated and other sources did not change their habits, the total change in emissions would be just 29%..The UN Intergovernmental Panel on Climate Change projects said even if the entire world met its targets, there would still be 50 gigatons of world emissions by 2030. FI says 187 megatons only represents .374% of that total, “or four-tenths of one per cent of global emissions, a reduction unlikely to have any impact on the trajectory of the climate in any detectable manner, and hence, to offer only equally undetectable environmental, health, or safety benefits.”.The 2030 GHG targets would mean at least $45 billion in revenue losses for the industry, and multi-billion dollar losses for governments in royalties and taxes. FI also says 30% of any GHG reductions made in Canada would simply be emitted elsewhere in more permissive jurisdictions. .The oil and gas sector makes products such as plastics, solvents, and hundreds of other intermediate and end-user goods, many of which are not easily substitutable. FI says Canada’s petrochemical industry in 2020 created 4,800 jobs and exports worth nearly $6 billion. In addition, the resins, rubbers, and fibres sub-sector, which also relies on petroleum, employed nearly five-million Canadians in 2020 with exports worth $7.8 billion..The emissions cap was put in the crosshairs during Alberta premier Danielle Smith’s election victory speech on May 29..“The prime minister is already ready to introduce a de facto production cap on our oil and gas sector that, if implemented, will result in tens of thousands of jobs lost, tens of billions in lost investment, damage our province’s fiscal position and bring economic hardship to Albertans,” Smith said..“Now, I’ve made myself clear on this matter to the prime minister in person and in public, but I feel we need to do it again.”.The FI report agreed the proposed federal cap on GHG emissions was “deeply problematic,” adding, “Inflicting such pain on Canada’s economy voluntarily would seem to fall into the category of ‘shooting oneself in the foot’” for little environmental benefit, only to see some of that forfeited industry and emissions going elsewhere..“Canada’s political class would be better off considering ‘scrapping of the capping,’ and consider, instead, a policy reform effort to rationalize Canada’s increasing crazy-quilt of greenhouse gas control policies and taxes,” the report concluded.
