What Is the Emissions Cap and What Effect Will the Cap Have on Alberta?
by Stephanie Ho Lem, CHCA Director of Living Green
The COP29 climate conference in Baku, Azerbaijan happened in November 2024. The hosting of COP meetings rotates among the five UN regional groups: Africa, Asia-Pacific, Eastern Europe, Latin America and the Caribbean, and Western Europe and others. According to the UN, members of these groups decide which country will host each conference. I as many others asks why oil rich countries would be hosting the COP meeting. Along with last year’s conference held in Dubai, are these countries trying to give the impression that they do care about the environment?
Canada’s input to the start of COP29 climate conference, was the announcement of its government’s plan to limit greenhouse gas emissions from the oil and gas industry. The draft regulations will require the sector to cap emissions to 35% below 2019 levels. Canada is the fourth-largest producer of oil in the world, fifth-largest producer of natural gas and of which Alberta accounts for around 84 percent of Canada’s production. According to the federal government, the cap will “cap pollution, drive innovation, and create jobs in the oil and gas industry.”
No sooner this announcement was made, following are comments made about the emissions cap.
Conference Board of Canada (Think Tank)
“Alberta would be hardest hit, from 2023 to 2030 the province’s economic growth and employment growth would fall. Estimates that the cap would reduce Canada’s GDP by up to $1 trillion.”
Nick Murray, The Canadian Press (November 2024)
“Can the industry meet the regulations without cutting production? According to the government, it can, which is paramount to the entire proposal. The government is pitching a cap-and-trade system as part of the proposed changes. Companies that fail to reduce their emissions enough will have to buy allowance units, a maximum of 20 per cent of their emissions cap from other companies to stay in compliance.
What would the industry do to meet the cap? The government is hoping oil and gas companies will reinvest their profits in technology that reduces greenhouse gas emissions without cutting their production. Initiatives such as carbon capture technology, buying offset credits outside the oil and gas industry like tree planting programs.”
Kenneth P. Green, Fraser Institute (November 2024)
“Even if Canada eliminated all its GHG emissions expected in 2030 due to the federal cap, the emission reduction would equal 4/10ths of one per cent of global emissions, a reduction unlikely to have any impact on the trajectory of the climate in any detectable manner or produce any relate environmental, health or safety benefits. The measure intended to avert harmful climate change, will generate too little emission reduction to have any meaningful impact on the climate.”
Deborah Yedlin, Calgary Chamber of Commerce (November 2024)
“Rather than support investment, the emissions cap, as currently structured, will create more uncertainty, stifle investments aimed at decarbonization in a sector that has already shown significant decreases in per barrel emissions intensity and risk moving investments to other jurisdictions, ultimately leaving Canada further behind.”
Alex Pourbaix, Executive Chair, Cenovus Energy
“Other oil and gas producing countries aren’t implementing an emissions cap because they understand the incredible importance of the oil and gas sector to their economies and they’re too smart to shoot themselves in the foot.”
Environmental Defence (Formerly Known as The Canadian Environmental Defence Fund)
Founded in 1984, Environmental Defence works with government, industry and individuals to defend clean water, a safe climate, and healthy communities.
“The oil and gas industry is the largest source of emissions in the country, accounting for over 30 per cent of Canada’s emissions. The industry has continued to produce more pollution each year, cancelling out efforts made by other parts of the economy. This underscores the need for government intervention…The pollution cap shifts the responsibility for addressing pollution back onto an industry that has long profited at Canadians’ expense and forces companies to do their part to clean up their own mess.”
The emissions cap will dominate the news this year, 2025. This article briefly warms you up on what most people are saying about the emissions cap. Will it become law?
Please note that the content provided is for informational purposes.
Sources: Fraser Institute-Kenneth Green, Calgary Chamber of Commerce – Debra Yedlin, Canadian Press – Nick Murray, Cenovus Energy- A lex Pourbaix, Environmental Defence, the Calgary Herald.
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