October 1, 2007

Industrial production for exports accounts for nearly half of Canada's GHG emissions, says StatsCan study

Industrial production to meet export demands was responsible for nearly half (46%) of Canada's greenhouse gas (GHG) emissions from industry sources in 2002, while domestic requirements for goods and services accounted for the remaining 54%, says a new study of GHG emissions data from Statistics Canada. Between 1990 and 2002, emissions associated with domestic demand showed a negligible increase, rising only by 0.4%, while those associated with the production of goods for export rose much more dramatically, by 50%.

The study analyzes Canadian industrial GHG emissions from a demand perspective. In contrast to the typical reporting of emissions from a supply perspective, showing how much pollutant is produced and by whom, a demand perspective analysis shows how the consumption of goods and services for different purposes drives the industrial production of GHG emissions. The analysis is based on StatsCan's GHG emissions accounts and input-output accounts.

The study found that between 1990 and 2002, total GHG emissions from industrial sources increased 18.4% to 573,843 kilotonnes (kt). Exports accounted for the vast majority of this increase, as GHG emissions from the production of goods and services sent to international markets surged by 49.9% to 264,358 kt.

After exports, the production of goods and services purchased by Canadian households was the second largest source of GHG emissions, from a demand perspective. However, emissions associated with industrial production to meet this personal spending rose only 6.9% during this period to 209,787 kilotonnes.

Because of the far greater rate of growth in GHG emissions associated with exports, personal expenditure and exports switched positions in terms of their relative importance. In 1990, exports accounted for 36.4% of industrial GHG emissions. By 2002, this proportion had jumped to 46.1%. In contrast, in 1990, personal spending accounted for 40.5% of industrial GHG emissions. Twelve years later, this proportion had declined to 36.6%.

The remainder of industrial GHG emissions resulted from the production of goods and services for investments in construction, machinery and equipment, for government purchases, and for inventories.

The study points out that globalization has led to better access to world markets and increased Canada's overall trade with the rest of the world. While this has benefited the Canadian economy, it has also resulted in rising GHG emissions in Canada.

Looking at exports more closely, the single largest source of GHG emissions was from the production of fossil fuels (coal, crude oil and natural gas) for export. In both 1990 and 2002, the production of these fuels for export emitted more greenhouse gases than any other exported commodity. Between the two years, says the study, GHG emissions from the production of exported fossil fuels jumped 135%, as worldwide demand for these fuels surged.

The production of imported goods and services also creates greenhouse gases, but since these emissions do not originate in Canada, they are not typically included in Canada's emissions estimates. StatsCan figures indicate that between 1990 and 2002, emissions outside the country associated with demand by Canadians for imported goods and services increased an estimated 15%.

The analysis also found that the use of fuel to power motor vehicles was the leading source of GHG emissions associated directly with households. These emissions are considered direct because they result from households' own use of fossil fuels. The other direct emissions from households are from the use of fuel oil and natural gas to heat homes. The direct consumption of fuels by households generated 111,276 kt of GHG emissions in 2002, says the study.

Direct greenhouse gas emissions from household use of heating and motor fuels accounted for about one-third of the total amount of greenhouse gases associated with households in 2002. Electricity was the household purchase with the highest associated indirect industrial GHG emissions, accounting for 13.5% of total household emissions.

Total household GHG emissions include both direct and indirect emissions associated with supplying household purchases. In 2002, total household GHG emissions made up almost half (46.9%) of Canada's total GHG emissions.

The analysis was conducted by Joe St Lawrence for Statistics Canada. "A demand perspective on greenhouse gas emissions," may be viewed in the latest edition of EnviroStats (16-002-XWE) on the StatsCan Web site, www.statcan.ca.

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