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Home / Wedge Advisory Note – Index / Wedge Advisory Note – Section 3

Wedge Advisory Note – Section 3

 

Advice on a Long-term Strategy on Energy and Climate Change

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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).