Capping greenhouse gas emissions in Canada’s oil and gas sector as the Trudeau government is planning, will make the public cost of reducing greenhouse gases more expensive and less efficient, according to a new study by the Fraser Institute.
While emissions from oil and gas are the highest from any one sector of the economy, they only account for about 25% of Canada’s total emissions, says study author William Watson in the report, C02 is CO2 is CO2 — The Implications for Emissions Caps.
“Put simply, all CO2 (carbon dioxide) molecules, are identical, whatever their source,” Watson said. “So why is the federal government treating the oil and gas sector differently?
“The source of CO2, which causes a build-up of greenhouse gases in the atmosphere, is irrelevant from an environmental perspective — the effect of each CO2 molecule is the same, regardless of its origin.”
Given that Prime Minister Justin Trudeau has set a minimum national carbon price across the country of $50 per tonne of emissions this year, rising to $170 per tonne in 2030, Watson argues his government should let the marketplace decide where emissions can be reduced most efficiently and cheaply.
While the oil and gas sector generated 203.5 million tonnes of Canada’s emissions in 2019, or 27.6% of total emissions of 738 million tonnes, the transportation sector generated 185.5 million tonnes or 25.1%; buildings 92 million tonnes or 12.5%; heavy industry 77.4 million tonnes or 10.5%; agriculture 66.7 million tonnes or 9%; electricity 61.8 million tonnes or 8.4% and waste and others 51.5 million tonnes or 7%.
Watson isn’t arguing that an emissions cap should be placed on other sectors of the economy, but rather that the government’s planned cap solely on the oil and gas sector should be removed.
The reason is that there may be less costly and more efficient ways to reduce Canada’s emissions in other sectors of the economy compared to oil and gas and the cap artificially distorts the market.
“There’s simply no rationale — scientific or economic — to treat one-quarter of greenhouse gas emissions differently than the remaining three-quarters,” Watson said.
“The government can’t have it both ways. If a government imposes a price on CO2 emissions, people and firms will go about finding the least costly way to reduce them and no further government intervention — like a cap on the oil and gas sector — is required.”
An unidentified government source has told the Canadian Press that if the oil and gas sector fails to meet its emissions cap by 2030, other sectors of the economy will have to make up the difference,
Post a Comment