By: Sean Cameron
Canada joined other nations in committing to achieve net-zero emissions by 2050 when it passed the Canadian Net-Zero Emissions Accountability Act in 2021. These commitments signal that governments around the world recognize the urgent need for stronger action to mitigate the effects of climate change. The Intergovernmental Panel on Climate Change (IPCC) has definitively stated that if the rising average global temperature is not limited to 1.5°C above pre-industrial levels, a tipping point will be reached after which certain changes to the climate will be unavoidable. Central to Canada’s net-zero emissions by 2050 commitment is carbon capture utilization and storage (CCUS), a type of negative emission technology, which has not proven to be a viable solution to reduce greenhouse gas (GHG) emissions at the scale necessary to meet Canada’s 2050 goal.
The term ‘net-zero emissions’ refers to bringing total emissions to zero by removing an equal amount of GHGs from the atmosphere or sources of emission (such as oil, gas, or cement production) as are emitted. This can in theory be done in a few ways, such as increasing natural carbon sinks (i.e., features of the environment that absorb carbon dioxide, such as the ocean and forests) through tree-planting initiatives to naturally “pull” carbon dioxide (CO2) out of the atmosphere. Another approach is to employ CCUS technology which captures CO2 at the source of emission and stores it underground or utilizes captured carbon in other ways. This approach is also key to Canada’s 2030 Emissions Reduction Plan which aims to reduce emissions in the oil and gas sector by 42% below 2019 levels by 2030, even though Canada is not projected to reach peak oil production until the 2030s.
CCUS and other negative emission technologies such as direct air capture are currently being developed across Canada. Shell’s Quest facility in Alberta has had CCUS technology installed since 2015 and has captured 6 million tonnes of CO2 to date, more than any industry CCUS facility in the world according to that same Emissions Reduction Plan. While 6 million tonnes seems significant, Canada emitted 730 million tonnes in 2019 alone. For now, CCUS technology remains expensive, energy-intensive, and far from being a reliable and effective climate solution.
To combat high investment costs, governments are developing mechanisms to incentivize the private sector to invest in and equip CCUS to their fossil fuel production. In Canada, an investment tax credit, which acts as a subsidy, is being made available for industrial companies that invest in CCUS technology to reduce emissions by 15 million tonnes of CO2 annually. A letter signed by 400 scientists and academics was submitted to the Deputy Prime Minister and Minister of Finance, Chrystia Freeland, in January 2022 urging the Canadian government not to move forward with the tax credit. The letter states that CCUS technology is being used as a tool to increase oil production and fails to account for the “environmental, social and health impacts associated with the mining, extraction, and transport of fossil fuels, faced primarily by Indigenous and frontline communities.” Despite promising to end fossil fuel subsidies by 2023 during the most recent federal election, the current government is slated to make the tax credit available in 2022.
When properly applied, investment tax credits of this nature can be beneficial. For example, to incentivize CCUS development to capture the emissions from industrial processes such as cement production, which are unlikely to be phased out in the near future. However, this tax credit also permits the oil and gas industry to continue polluting past 2050 as long as they remove an equal amount of emissions through carbon capture. The Oil Sands Pathways to Net Zero was recently formed between the Canadian and Albertan Governments and the six largest oil sands producers responsible for 95% of oil sands production. The plan reveals that Canada will reconcile continuing oil sand production with its net-zero goal by implementing CCUS technology. At the same time, further oil and gas expansion will likely continue, with many project applications currently being considered that would increase Canada’s oil and gas production such as the Trans Mountain pipeline, the cost of which has increased to $21.4 billion from $7.4 billion in 2018. Even if future emissions are negated, expanding oil and gas production comes with a proven range of other negative environmental and social impacts beyond raising global temperatures such as oil spills, biodiversity loss, and contaminating drinking water. And while the tax credit rate has yet to be released, the low efficacy of CCUS means that the Canadian government will have to provide large sums of money to subsidize the cost of technology that currently, can only reduce a fraction of Canada’s emissions.
Although the IPCC includes the use of CO2 removal technology to limit warming to 1.5°C, it also recognizes the constraints of this technology as it currently exists. While technological advancements in CCUS between now and 2050 may allow Canada to reduce emissions and meet its net-zero goal, it is certainly not a guarantee. However, it is certain that further investments in oil and gas production will only add to the total amount of CO2 that will need to be removed from the atmosphere. Based on the federal government’s actions, it is easy to imagine fossil fuel production continuing in the coming decades under the promise that CCUS will negate all our emissions until it is realized that removing CO2 is not feasible at the scale required. Countries committing to achieve net-zero emissions by some far off date must acknowledge that CCUS is only one piece of the emissions reduction puzzle given its current technological state. Therefore, the best way to achieve net-zero emissions by 2050, stave off the worst effects of climate change, and provide health and economic benefits to society is not to rely on inadequate CO2 removal technology, but to decrease fossil fuel production and transition towards renewable energy.
Sean Cameron is a Master of Public Policy candidate at the University of Toronto’s Munk School of Global Affairs and Public Policy and holds a Bachelor of Arts in Geography from the University of British Columbia. He is currently working as a Research Assistant for the Committee on the Environment, Climate Change, and Sustainability. Sean is interested in exploring how public policy can confront climate change while reducing social inequality in urban and rural communities.