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Home / Medium- and long-term scenarios for GHG emission and air pollutant reductions / ECC – Interim Report – Summary

ECC – Interim Report – Summary

Interim Report to the Minister of Environment

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Executive Summary

This Interim Report to the Minister of the Environment presents preliminary findings of research and analysis conducted by the National Round Table on the Environment and the Economy (NRTEE). This report is in response to a request from the federal government for advice on targets and scenarios for reducing emissions of greenhouse gases (GHGs) and air pollutants in Canada in the medium- and long-term. The report reflects economic analysis conducted by NRTEE on the costs associated with various GHG and air pollutant reduction targets. It does not, however, provide any detailed analysis of the benefits – economic, environmental, or social –that might accrue from such reductions. Nor is the NRTEE in a position to comment on what the costs of inaction might be, if such targets are not achieved. The preliminary analyses on GHG and air pollutant targets and pathways to achieve the targets were conducted using an integrated, energy-economy equilibrium model. The model uses an emission “price” in the scenario analyses. An emissions “price” is a price placed on carbon emissions through the implementation of an emissions cap and permit trading scheme, and/or an emissions tax. The Interim Report:
  • summarizes the scope and methodology of the NRTEE’s work to date;
  • provides key initial findings of commissioned research under GHGs, air pollutants (sulphur dioxide, particulate matter, nitrogen oxides, and volatile organic compounds) and integrated approaches; and,
  • identifies research questions and next steps in the NRTEE’s work.
Specifically, this report provides initial findings on scenarios that examined 45% and 65% GHG emission reductions (below 2003), as requested by the Minister. Further to these scenarios, the NRTEE is currently examining deeper emission reductions in the order of 80% (below 2003 levels). A final report, with conclusions and recommendations, will be provided to the Minister in the Fall of 2007.

GHG Emissions Reductions

The NRTEE has examined the implications of long-term GHG emissions reductions of 45% to 65% (below 2003 levels) by 2050. This report provides cost estimates of these two targets, expressed as dollars per tonne of CO2 equivalent. Our intention in providing these estimates is to help the government – and Canadians – make informed decisions on medium- and long-term GHG policy. To attain a 45% reduction target, the price is estimated at $160 and $200/tCO2e in 2050. To attain a 65% reduction target, price estimates are $270 and $350/ tCO2e in 2050. The difference in prices is attributed to the GHG price path scenarios — “fast” versus “slow”. A “fast” start implies relatively higher emissions prices in the near term and lower prices in the longer term; whereas a “slow” start implies relatively lower emissions prices in the near term and higher prices in the longer term. The higher prices are associated with a “slow” start. In addition to these cost estimates, the NRTEE’s research finds that:
  • In order to meet deep GHG emission reduction targets, the immediate implementation of a clear, consistent, and long-term policy (such as an emissions price) by the government is critical. Such a policy needs to place a price on carbon, which could be implemented, for example, through an emissions cap and permit trading scheme, and/or an emissions tax.
  • Establishing and reaching medium-term targets is critical if the long-term targets of 45% and 65% reductions by 2050 are to be achieved. Any delay in the implementation of the GHG price may put some long-term GHG targets beyond Canada’s reach and will mean that future emission prices will need to rise significantly.
  • Medium and long-term targets should be set in combination to account for reductions of cumulative emissions between now and 2050.
  • Canada’s contribution to the international effort to reduce GHG emissions has not yet been determined, but could end up calling for a “faster and deeper” reductions path than currently envisioned by the Government of Canada.

Air Pollutant Emission Reductions

Reducing emissions of sulphur dioxide, nitrogen oxides, and volatile organic compounds by up to 50% is achievable with a relatively modest emissions price, but reductions beyond this level require the price to rise considerably. The one key exception to this general conclusion is PM, where the high process emissions in several industries make reductions in the order of 50% prohibitively expensive. 

Integrated Approach for Emission Reductions

Even without an integrated approach, there can be significant co-benefits in terms of local air pollution from policies that produce deep GHG reductions, and vice versa. There are important enhanced benefits that can be realized when addressing GHG and air pollutant policies at the same time, with significant opportunities for co-pollutant reductions when policies are designed and implemented concurrently.