June 26, 2006

Canada can cut GHG emissions by 60% without sacrificing productivity, competitiveness, says NRTEE

Canada can reduce its greenhouse gas (GHG) emissions by as much as 60% from today's levels over the next 45 years, using existing technologies and even with a growing economy and increases in oil sands production, says the National Round Table on the Environment and the Economy (NRTEE). The key, says the group in a new advisory report released on June 21, will be to focus on energy use and energy production simultaneously.

"This study is a first," said NRTEE chair Glen Murray. "While other studies have raised general issues about how climate change will affect Canada's economy and environment, this study is the first to focus on what a low carbon future might look like for Canada over the next half century or so (between now and 2050)," he explained.

The analysis by NRTEE members focused on two questions. How can Canada protect and enhance its national interest with regard to energy and climate change issues between now and the mid-21st century? And what do we need to do right now to achieve this? The challenge is considerable, given that Canada has a growing population, an economy that is growing faster than the population, and an oil and gas sector that is growing faster than the economy.

That major emission reductions can be achieved, at least from a technological standpoint, is the first and perhaps most important of the study findings. As part of the study, a scenario was developed for the NRTEE by energy consultants ICF International in which energy-related greenhouse gas emissions are reduced to less than half their current levels, using existing and near-term technology, even with a future that includes a larger population (45 million), a larger economy (more than double in real terms) and growth in oil and gas production that outstrips growth in domestic demand.

Another important conclusion emerging from this scenario is that there can be a Canadian solution to making significant GHG reductions by mid-century, but significant reductions can be achieved only if energy and climate change policy addresses both energy use and energy production, i.e. increasing energy efficiency and reducing carbon intensity.

For energy use, increasing energy efficiency is critical. By doing so, we could achieve approximately 40% of our goal of a 60% reduction in GHG emissions, says the report. The question is not which technologies to deploy, but how to deploy all of the potential GHG reduction technologies, especially in the areas of transportation (both freight and personal) and commercial and residential buildings. Finding ways to deploy many different technologies in several sectors effectively is an important policy issue.

With regard to energy production, the study addresses both the oil and gas sector and electricity generation. Canada's growing role as a major energy exporter is compatible with deep GHG emissions, it says, but only if carbon capture and sequestration (CCS) is perfected. Using this technology in the oil and gas sector could benefit Canada both environmentally and competitively as a leading provider of world energy.

Reducing GHG emissions by 60% will require a major transformation of the electricity sector between now and 2050, the report continues. As with the oil and gas sector, CCS and clean coal technology will play important roles, as will cogeneration and renewable energy, particularly wind. Indeed, says the NRTEE, after CCS, the largest reductions in GHG emissions associated with electricity generation will come from cogeneration and renewables. (The study assumes that all coal-fired generation in Alberta and Saskatchewan will use CCS by 2050.)

The chief difficulty in significantly reducing GHG emissions is not the lack of relevant technologies. Rather, it is the lack of a long-term signal, says the report. Such a signal is urgently needed to help the private sector make shorter-term investment decisions that take GHG reductions into consideration. These decisions, affecting Canada's energy use and production infrastructure, are being made right now, every day. Accordingly, it is important to send the appropriate signal as soon as possible. The longer we wait, the more difficult it will be, says the NRTEE.

The study also points to significant co-benefits to be gained from major reductions in GHG emissions, beginning with significant improvements in Canada's air quality and a lessened threat of severe climate change impacts. Economic co-benefits through the marketing of clean energy technologies will occur as well. With environmental technology representing a global growth area, a robust domestic market will provide a solid base for Canada's exporters. The NRTEE notes, however, that domestic platforms, especially for areas such as carbon capture and sequestration, need to be made a national priority.

The NRTEE's advisory report to the Minister of Environment on a long-term approach to energy and climate change issues may be viewed on the NRTEE Web site, www.nrtee-trnee.ca.

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