Contributed by Robert Lyman©2017
Robert Lyman is an Ottawa energy policy consultant, former public servant of 27 years and prior to that he was a diplomat for 10 years. Video interview “Environment over Economy?” with Robert Lyman follows this post.
Much of the controversy in Canada concerning climate change issues takes place at a very general level. People discuss first whether one should believe those scientists and modelers who predict catastrophic global warming, and second what are the implications of this for the emissions reductions measures, if any, we should take in Canada. A lively debate still takes place on both questions. We might gain more insights by asking, “What if”. What if, for example, Canadians in each province tried actually to meet the official greenhouse gas emission reduction targets already set by governments?
The purpose of this note is to explore the possible implications if the residents of Newfoundland and Labrador actually had to meet the targets that have been set for them by the federal and provincial governments over the next thirty-two years (i.e. to 2050) and beyond. A thorough analysis of this would require the use of sophisticated econometric models and an enormous amount of data, which I lack. The comments that follow should thus be considered as attempts to offer qualitative insights into the analysis that must be done and the choices that lie ahead.
Interactive map of Newfoundland and Labrador available at this link:
The Government of Canada formally has committed to the United Nations to reduce GHG emissions from current levels (722 megatonnes, or Mt, of carbon dioxide equivalent, in 2015) to 622 Mt in 2020 and 525 Mt in 2030. In 2008, former Prime Minister Stephen Harper made a political commitment that Canada would reduce its emissions by 50% or more from 2005 levels by 2050; that would mean a reduction to 369 Mt.
The Government of Newfoundland and Labrador has made a political commitment to reduce provincial GHG emissions to 10% below 1990 levels by 2020. As provincial emissions in 1990 were 9,750 kilotonnes of carbon dioxide equivalent (kt CO2e), this implies a 2020 target of 8,775 kt CO2e. Newfoundland and Labrador has also committed to reduce emissions by 75% to 85% below 2001 levels by 2050. That implies emissions levels in a range of 1,394 kt CO2e to 2,323 kt CO2e by mid-century.
Neither the federal nor provincial commitments include any condition concerning future increases in population or economic activity. The goals are based upon the expectation, one can only assume, that somehow emissions reductions can be achieved at rates that will offset economic and population growth and, in addition, achieve very significant reductions in the emissions intensity of the economy.
There is also no official connection between the goals articulated by the two different orders of government. Clearly, for example, Newfoundland and Labrador’s 2050 target far exceeds what would be required for the province if the emissions reduction measures contemplated to achieve the federal goal was to be applied proportionately across all provinces and territories.
The Current Situation
The most recent data on GHG emissions in Newfoundland and Labrador are for 2013. According to Environment and Climate Change Canada, Newfoundland and Labrador emitted 8,640 kt CO2e in that year.
Table 1 indicates the breakdown of those emissions.
|Newfoundland and Labrador GHG Emissions by Source in 2015|
Source: Environment and Climate Change Canada National Inventory Report, 2015
It may be useful to clarify what is included in each of the above categories of emissions. “Stationary combustion” refers to the emissions from large energy consuming plants, such as that from public electricity and heat production, petroleum refining, mining and oil and natural gas production, manufacturing, construction and large institutional uses. Transportation emissions are those from road transportation, railways, marine uses and aviation. Fugitive sources are emissions of gases or vapours from pressurized equipment due to leaks and other unintended or irregular releases of gases, mostly from industrial activities. Agriculture includes emissions mainly from manure management and fertilizers. Waste includes emissions from solid waste disposal on land, waste incineration and wastewater handling.
The province’s pattern of emissions differs considerably from that of other provinces, mainly because stationary combustion holds such a large share, while industrial and agricultural emissions are relatively low. In most provinces other than Alberta and Saskatchewan, transportation typically accounts for 25% to 30% of emissions, so the share held in Newfoundland and Labrador is again fairly high. This has important implications for the cost of emissions reduction.
Newfoundland and Labrador’s emissions declined from 1990 to 2000, but then rose by 2010 to just above the 1990 level, and have declined continuously since then. They are already below the 2020 target.
The provincial government’s climate plans place heavy emphasis on two types of measures – continuing improvements in energy efficiency and the development of Muskrat Falls, the immense hydroelectric project in Labrador. It counts on the electricity produced by Muskrat Falls and delivered to the island to allow the displacement of an estimated 1.3 million tonnes of GHG emissions annually from the oil-fired generating station at Holyrood and probably more from closing smaller thermal generation plants. That would cut provincial emissions overall by about 10% of what they would otherwise have been by 2030.
Muskrat Falls aerial from Nalcor Energy site: https://muskratfalls.nalcorenergy.com/project-overview/muskrat-falls-hydroelectric-generation-facility/
The Potential Implications of the 2050 Targets
On a per capita basis, Newfoundland and Labrador’s emissions will be about 17.1 tonnes of CO2e per capita, about the same as the other Atlantic provinces, but higher than Quebec at 8.9 tonnes per capita.
Transforming the electricity generation in the province and making some additional improvements in energy efficiency may reduce emissions by a combined 15% to 20% to somewhere in the range of 6900 kt CO2e. The provincial government acknowledges that this will be “challenging”. Moving beyond that to the emissions levels required by the 2050 targets will be exceedingly difficult. Logically, most of the cuts will have to come from the largest sources of emissions, stationary sources and transportation. Let us explore what that would entail.
Stationary Combustion Sources
As in other sectors, there are opportunities to improve energy efficiency and thereby reduce GHG emissions in Newfoundland and Labrador’s emissions-intensive plants. Energy efficiency, however, will not cut emissions to a fifth or sixth of their previous levels. Several of the existing economic activities and plants would have to be eliminated.
Environment and Climate Change Canada publishes the names of the large facility GHG emitters in Canada. There are eight in Newfoundland and Labrador. The following table shows their emissions in 2016.
NL Reporting Industrial Facility Emissions in 2016
|Holyrood Generating Station||Holyrood||1352|
|NARL Refining||Come by Chance||1266|
|Iron Ore Co. of Canada||Labrador City||962|
|Holyrood Gas Turbine||Holyrood||115|
|Voisey’s Bay Mine||Voisey’s Bay||85|
|Corner Brook Pulp And Paper||Corner Brook||51|
|Long Harbour Operations||Long Harbour||31|
|Hardwoods Gas Turbine||Mount Pearl||16|
Closing all, or even half, of these plants to achieve the emissions reduction target would have dire employment and income effects. This would eliminate resource-based opportunities that simply could not be replaced, leading to the creation of near-ghost towns in Labrador City and Voisey’s Bay.
Mining and oil and gas production accounted for 1,370 kt CO2e of the stationary combustion sources in 2013. Any significant expansion of offshore oil production would threaten the attainment of the emission reduction targets, so presumably the province would have to follow Alberta’s lead and place a cap on future oil development.
Reducing emissions in transportation is far more complex than the general public believes. The complexity arises from the differences among the surface, marine and aviation modes of transport and from the many ways in which emissions can be affected, including efficiency improvements in existing vehicle technologies, development and market penetration of new technologies, changes in the behaviour of vehicle operators, inter-modal shifts and use of alternative fuels. The academic literature and the media are full of positive expectations about the emissions reduction potential of new technologies, but many of these technologies have not yet been developed, and may not be developed for decades.
Most Canadian transport-related emissions come from surface vehicles. About half come from cars and light passenger trucks (SUVs), a quarter from commercial trucks, 10% from aircraft, 4 % from rail and the remainder from buses, motorcycles, and off-road vehicles, including those used for farming and construction.
The recent and near-term trends in passenger vehicle emissions are almost entirely due to the effects of regulation. In October 2010, Environment Canada issued the Passenger Automobile and Light Truck Greenhouse Gas Emission Regulations, which prescribed progressively more stringent annual emissions standards for new vehicles in model years 2011 to 2016. In 2014, Environment Canada introduced even more stringent standards for the 2017 to 2025 model years. Under both phases of light-duty vehicle regulation, the fuel efficiency of new cars will increase by 41% and the fuel efficiency of new passenger light trucks will increase by 37%. In addition, new emissions standards for heavy-duty vehicles (buses and trucks) are expected to reduce Canada’s emissions by about 2 Mt by 2020.
These emission reductions will come at a high cost to vehicle manufacturers, a cost that will be passed on to consumers via the prices of the vehicles. The vehicle industry argues that, after more than 30 years of increasingly stringent regulations, it is reaching the limits of current technology. Certainly, the regulations are changing the types of vehicles available to consumers. Newfoundland and Labrador cannot do anything on its own that would change the fuel efficiency and emissions of North American vehicles beyond what is agreed jointly by the U.S. and Canadian governments.
Increasing carbon taxes on gasoline will make driving more expensive for drivers, but experience in Europe has shown that even very high prices will not substantially reduce fuel use. In Norway, for example, gasoline prices were CDN $2.46 per liter in the first quarter of 2017, the highest in Europe, and yet gasoline demand there continues to rise. We would need a carbon tax of $600 per tonne to raise average Canadian prices to that level.
The “bottom line” is that the combined effect of regulations and higher fuel taxes will increase fuel efficiency and reduce per vehicle emissions, but as has happened to date, the increasing number of cars on the roads will probably leave emissions stable or very slightly declining. It is extremely unlikely that regulation and taxes will force consumers to abandon their cars altogether, as would be required by an emissions reduction of 75 to 85%. This is especially the case in the rural areas.
What about electric vehicles? Electric vehicles are the beneficiaries of both large government subsidies and pervasive media hype. However, a 2010 report by J.D Power and Associates that offered a pessimistic view of EV market prospects has proved prophetic. The study concluded that the combined global sales of hybrids and all-electric plug-in vehicles might total 5.2 million units in 2020, just 7.3% of the 70.9 million passenger vehicles to be sold worldwide in that year. At the end of 2016, global sales just passed the 2-million-vehicle mark, well below the J.D. Power estimate for 2020. This is also far less than the numbers projected by the former Obama Administration in the U.S. and Chancellor Angela Merkel of Germany. EVs constitute less than 1% of new vehicle sales in Canada. While sales grow every year, they are unlikely to become a significant portion of the total vehicle fleet for at least 20 years, and perhaps much longer.
There are even more limited prospects for massive reductions in freight transportation through inter-modal shifts. Trucks are the fastest growing source of GHG emissions in transportation. Shifting 10% of freight from trucks to rail is considered a significant goal, as businesses prefer trucks for their flexibility; unlike rail, trucks can pick up and deliver freight to many destinations. If a 10% shift from large trucks could be achieved, this would only reduce emissions in all of Canada by 0.42 Mt in 2020.
Environmentalists celebrated when a two-seater all-electric aircraft won a race in Europe, beating conventional piston-driven models, and a solar-powered plane flew around the world. The subsequent media coverage rarely mentioned that in both cases most of the aircraft’s weight was the battery, or that it took the solar plane a year to make the trip because of problems with its battery. There are a number of ways to improve the fuel economy of commercial aircraft and these are now being pursued by the international civil aviation industry. The idea that long-distance commercial jetliners could be powered by battery packs, however, lies more in the realm of Jules Verne than in serious aviation planning. The only way to drastically reduce GHG emissions from commercial passenger and freight aircraft is to restrict, indeed possibly ration, their use. This was actually proposed in an early version of the Canadian Green Party’s Platform posted online prior to the federal election of 2015, but it was wisely dropped in the final version. Severely limiting commercial flights in Newfoundland to meet the 2050 target, of course, would certainly reduce emissions in the hotel and restaurant industries.
Newfoundland and Labrador likely will meet its 2020 emissions reduction target. It is far less likely to be able to meet its 2050 goal. Reducing total emissions to the range of 1394 to 2323 kt CO2e would lower Newfoundland and Labrador’s per capita emissions to a level similar to that of African countries like Zambia or Sudan today. There seems no way to so completely transform the provincial economy in 32 years, or perhaps even in 60 years.
It is difficult to imagine a transformation of this magnitude being achieved through the imposition of carbon taxes. The tax regime currently being implemented by the federal government would only raise carbon taxes to $50 per tonne (equivalent to 11.5 cents per liter of gasoline) by 2022. A tax sufficient to achieve the goal of a 75% to 85% emissions reduction would have to be much higher – high enough to ward off the possibility that Newfoundland and Labrador’s population and economic growth, and resulting emissions, might increase well above current levels. Achieving the emissions target thus would require a level of government involvement in and direct control of the economy far higher than the province has ever experienced. Whether Newfoundlanders would vote for such policies remains to be seen.
Labrador City –
Newfoundland and Labrador Film Development Corporation (NLFDC)– http://www.nlfdc.ca/
Celebrate Canada – things to see and do in Newfoundland and Labrador.