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EDMONTON — Canada’s economy will contract by $54 billion, with the loss of 300,000 jobs, should the country manage to reach its commitments made under the Paris climate agreement, says new research from Alberta’s energy war room.
The Canadian Energy Centre — widely known as the “war room” created by Premier Jason Kenney’s government to fight misinformation about the oil and gas sector — argues that given policy promises in place now, even if all those are actually realized, there would still be an emissions “gap” of 112 megatonnes of greenhouse gases by 2030, the date by which Paris signatories must have their emissions slashed.
“If you promise policy first and try and figure out a roadmap later you can hit a lot of potholes on the way to your goal and you may not reach your goal,” explained Mark Milke, the executive director of the Canadian Energy Centre.
The Paris Agreement, signed in 2016, commits governments to reducing carbon dioxide emissions to 30 per cent below 2005 levels. In 2005, Canadian emissions were 730 megatonnes; to reach its Paris targets Canada would need to bring emissions in 2030 down to roughly 511 megatonnes.
Using data commissioned from Navius Research, the report says that current policy announcements and measures in place — measures aside from the Paris targets — were expected to drop emissions to 657 megatonnes in 2030, from 714 megatonnes in 2015. That, obviously, is not reaching the Paris goal of 511 megatonnes.
“These are not numbers picked out of the air,” said Milke.
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According to the report, that amounts to a 112-megatonne “Paris gap” between the best-case emissions-reductions figure in Canada and the target the country committed to with the Paris Climate Agreement.
The report also considers what impact bridging the “Paris gap” might have on investment in Canada. The Canadian Energy Centre uses an increase in the carbon tax as the mechanism to close the Paris gap. In order to achieve that, the carbon tax would need to be $116.02 per tonne by 2030. The 2020 carbon tax rate is $30 per tonne.
In Alberta, the Paris target is 209 megatonnes, but this is lower than the achievement of the “promised policy,” which would decrease emissions to 263 megatonnes by 2030, leaving a gap of 54 megatonnes.
The study notes that 54 megatonnes is nearly one-half of Canada’s overall Paris gap of 112 megatonnes, and reaching that target would be a burden on the western province.
The report also looks specifically at the oil and gas sector. In Alberta, the Paris gap for the sector would be 24 megatonnes; this is just four megatonnes more than the emissions of the agriculture sector in the province.
Under the scenario promised at present, investment will be roughly $375 billion in 2030. If the government manages to close the gap, investment will be roughly $19 billon less, for a total of just under $356 billion.
In the Alberta context, the war room says investment in Alberta will be $95 billion in 2030 under the promised scenario. If the Paris gap is closed, it will be about $91 billion. More specifically, on the oil and gas front, the difference in investments between the proposed outcome and the Paris outcome is $3.5 billion less. Should the Paris gap be closed, GDP overall in the province will be down by $13.5 billion.
Milke told the
that this doesn’t necessarily mean a contraction in the economy. Rather, the losses are money and jobs that may have existed if the policies needed to reach the Paris commitments weren’t acted upon.
“This is based on sacrificed GDP and foregone jobs, it’s not that we’re saying 2030 will be a smaller economy than in 2020,” Milke explained.
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