With an expanding mix of climate policies across the federation and the backdrop of increased ambition to mid-century under Canada’s ratification of the Paris Agreement, now is a good time to pause and take stock.
As policy activity intensifies, routine assessments such as this one will become both more important and more frequent. Notably, as of 2018, the “Facilitative Dialogue” process enabled under the Paris Agreement will compel the nation to take stock of our progress towards our target. Starting in 2023, and every five years thereafter, under Article 14 of the Paris Agreement the government will report out on progress towards its target. This will more closely align GHG performance reporting with electoral cycles. At home, we are witnessing an increased push by government auditors of all kinds to proactively assess performance relative to stated policy ambition, including domestic and international climate targets.
Chris and I tumbled some numbers to take stock and look for collaborative policy opportunities within the Canadian federation, asking two key questions:
Are current policies performing as expected, and can they deliver on our commitments?
How might governments collaborate to improve policy cohesion and efficiency?
We will release a second policy brief shortly that will more closely examine the implications of scaling up current policy to the NDC
Based on our analysis to date, we offer the following insights:
Canada’s GHGs will likely peak before 2020, and then fall thereafter.
Climate action by Canadian jurisdictions will improve the country’s odds of meeting its 2030 NDC goal and decarbonizing its economy by mid-century. Carbon pricing, performance based regulations, and innovation policies are changing behaviors and driving innovation.
Despite these efforts, Canada is not yet on a GHG reduction pathway that will meet the 2030 NDC target. As current policy flat lines past 2020, and GHGs rise with the economy, the NDC gap widens.
Governments now have the policy foundations for mid-century decarbonization; this will make increased ambition cost-effective and relatively straightforward:
Efficient and broad-based carbon pricing of all forms is now our national baseline. Policy makers can scale up provincial systems to achieve our NDC via nationally aligned carbon prices in the range of $150 per tonne. With domestic emission trade between large final emitters, economic efficiency rises with carbon prices contained at $100 per tonne CO2e relative to the current patchwork of “mitigation islands”.
Governments can tighten existing performance-based regulations that allow for trading and other forms of compliance flexibility. In parallel with increased carbon prices, they would need to tighten up regulations for transport, buildings and methane, as well as hydrofluorocarbon (HFC) control.
Policies include measures to maintain competitiveness and ensure fairness. This improves acceptability across impacted sectors and boosts the feasibility of increased GHG ambition. With concern over competitiveness impacts already baked-in, the risks of slowed US action are diminished.
In the near term, Canada should build on existing carbon pricing, regulatory, and innovation policies to increase ambition beyond 2020.
Leaders should also improve climate governance processes to reconcile short-term climate policymaking with long-term decarbonization. Under current best practice that is absent in Canada, governments routinely assess performance against carbon budgets, in addition to single-year targets.
With coordination and further collaborative action from the First Ministers, Canada could quickly get on track to achieve its NDC and then transition to deep decarbonization by mid-century.