Wedge Advisory Note – Section 3
Advice on a Long-term Strategy
on Energy and Climate Change
Section III: Details of the Study
Characteristics
The NRTEE requested the development of a scenario that shows
one way in which Canada can achieve a significant reduction
in energy related GHG emissions by 2050. In order to
provide a quantifiable definition of what a “significant”
reduction would look like, the NRTEE decided to select
for illustrative purposes a long-term domestic reduction
of energy-related GHG emissions by 60 per cent by 2050.
This level of reduction is roughly consistent with similar
targets adopted or being considered by other OECD countries
(for example, the United Kingdom).
There is no denying that there is uncertainty associated with
thinking about how Canada’s energy use will evolve
to the year 2050. One need only to think back to the
late 1950s and imagine at that point trying to comment
on what Canada’s energy use and GHG emission patterns
might look like in 2005.
But looking at deep GHG reductions in the long term allows
us to take a fresh look at how our energy production
and consumption patterns give rise to greenhouse gas
emissions. Such an exercise reveals opportunities and
possibilities that expand the menu of immediate policies
and strategies for responding to the threat of climate
change, providing insights that can help Canada plan
for significant GHG reductions. Looking at the “big
picture” presented by this study can help with
large-scale decisions that will be necessary to set
direction, but which will undoubtedly require fine-tuning.
Scope of the analysis
The scope of this analysis is limited to “energy-related”
GHG emissions. These are the emissions of GHG (primarily
carbon dioxide, but also methane and nitrous oxide)
that result from the production and consumption of fossil
fuels.
Non-Energy Emissions Excluded. In 2003, GHG emissions in Canada
totalled 740 Megatonnes (Mt) CO2 equivalent of which
600 Mt CO2 equivalent, or 81 per cent, were directly
related to the production and consumption of fossil
fuels.[2]
The remaining 140 Mt CO2 equivalent of emissions come
from sources that are not energy-related. These emissions
consist primarily of carbon dioxide from some industrial
processes, methane from enteric fermentation in livestock
production, nitrous oxide from agricultural soils and
methane from solid waste landfills. These non-energy
emissions are beyond the scope of this study, but achieving
a low-emission future in Canada would require that they
also be reduced. Further, in a future in which energy-related
emissions are reduced to less than half their current
levels, the relative importance of the non-energy sources
would become much greater unless they could also be
reduced by the same percentage or more.
Land Use Related Impacts Excluded. Another way we affect
the level of greenhouse gas emissions in the atmosphere
is through the impact of human activities on the rate
of photosynthesis and respiration of plant material.
The way in which we manage our forests and agricultural
lands, and the extent to which we change land use patterns
(for example, through urbanization) affects the rates
at which carbon is transferred between the terrestrial
ecosystems and atmosphere. These anthropogenic influences
on the photosynthetic cycle are referred to under the
rubric of “Land Use, Land Use Change, and Forestry”
(LULUCF). Compared with energy-related and most of the
non-energy-related emissions, there is a high degree
of uncertainty surrounding our understanding of LULUCF
impacts on atmospheric carbon levels. The potential
strategic scope of the LULUCF sector is briefly discussed
in Section IV of this document.
Assumptions
Several key assumptions were made at the start of this exercise
that had a strong impact on the resulting 60 per cent
GHG reduction scenario. The first was to limit the study
to existing technologies or to those can likely be perfected
in the near term (for example, carbon storage technology).
This is not to say, however, that new, as yet unproven
technologies should not be pursued.
The second important assumption was to allocate the emissions
associated with the production of electricity and the
exploration and production of oil and gas to the domestic
end-use consumer. This approach highlights the importance
of Canada’s energy use infrastructure (e.g., transportation,
buildings) and helps to us to think about the long term
possibilities for achieving significant GHG reductions.
Also, this approach significantly modifies the regional
distribution of emissions, placing less emphasis on
the oil and gas producing regions of Canada.
Another consequence of allocating emissions to end use is that
it separates and therefore highlights the important
GHG emission impact of Canada’s energy exports
on Canada’s overall GHG emissions.
Emissions from the production of energy for export are also the
subject of one of the key assumptions made at the outset
of the analysis; that Canadian energy production will
grow at rates that are determined less by the internal
dynamics of the Canadian economy and more by continental
and global markets for these commodities. This means
that decreases in domestic energy use will not likely
impact energy exports. For this reason, the production
scenario for the oil and gas industry is based on the
mid-term growth rates of the Natural Resources Canada
(NRCan) production forecast.
It was also necessary to make a set of broad assumptions
regarding Canada’s economic structure and the
size and nature of its population in 2050 in order to
develop a “Business as Usual” (or non-interventionist)
scenario for that time period. In terms of the underlying
demographic and economic base, the non-interventionist
scenario is in many ways just a larger version of the
Canada of today. The scenario implies sustained growth
— in some cases exponential growth — of
population, labour productivity and per capita GDP.
This scenario looks quite a bit like today, in that:
- The personal automobile and the truck would still dominate
the transportation of people and freight, with trucks
still consuming around 80 per cent of the energy used
for freight transportation. - While there is a slight shift from suburban to urban in
location and lifestyle, the predominant urban form
resembles the downtowns of today’s cities, except
that there are considerably more people living in
the cores of these cities in 2050. - Service sector workers continue to work in offices and the
other sorts of commercial and institutional buildings
in which they work today, but there are many more
of these buildings. - Except for the fossil fuel industry itself, there is a further
drop in the relative share of Canada’s economic
output generated by the energy intensive primary producers
(mining and smelting, steel, pulp and paper, industrial
chemicals, etc.), but these industries all continue
to grow in absolute terms. - Output of the tar sands doubles and redoubles to five million
barrels a day, and natural gas reserves continue to
be delineated and developed at a pace sufficient to
maintain Canada’s role as a gas exporter from
now until 2050.
In short, it is a scenario that takes as its reference
point a Canada in 2050 in which energy-related greenhouse
gas emissions reach 1,300 Mt CO2 equivalent per year,
about twice today’s level (which is currently
at 600 Mt CO2 equivalent per year for energy related
emissions).
A 60 per cent reduction of GHG emissions needs to be viewed
in the context of the unique Canadian situation: our
population is growing, the size of the economy is growing
faster than the population, and the petroleum industry
is growing faster than the economy.
Presentation of results
The NRTEE’s development and analysis of a 60 per cent
GHG reduction scenario is based on a method developed
by Robert Socolow and Stephen Pacala[3].
The objective of their study was to show in a simple
way that it was possible to envisage a transition to
a global energy system by 2050 that used existing technologies
to stabilize global GHG emissions, at levels widely
believed able to avert major climate change impacts.
The NRTEE’s scenario is a Canadian adaptation
and an extension of this method.
Like Socolow and Pacala’s original study, the NRTEE’s
analysis idealizes the emissions curves and depicts
them in a linear way, creating a simple diagram that
shows:
- A top line showing the GHG trajectory associated with
the non-interventionist 2050 scenario described above.
- A bottom line showing the GHG trajectory if Canada reduced
GHG emissions to 60 per cent below current levels. - A triangular space between the two lines, which defines
the size of the GHG reduction challenge. This space
is then filled by a variety of GHG reduction “wedges”.
Each wedge represents a different type of GHG reduction
technology or strategy. The size of the wedge illustrates
graphically the extent to which this measure could
plausibly contribute to the overall reduction. A total
of 31 individual GHG reduction technologies and strategies
were identified as possible wedges (see Appendix A).
© 2013