Canada announced regulations on Nov. 4 to cap carbon emissions from its oil and gas industry and reduce the release of greenhouse gases, a move bitterly opposed by the energy industry and met with lukewarm support from environmentalists.IAN WILLMS/The New York Times News Service
Anna Johnston and Andrew Gage are staff lawyers at West Coast Environmental Law Association.
Last week, the federal government published its long-awaited regulations to cap and lower oil and gas emissions through a cap-and-trade system. First announced in 2021, the cap has faced vociferous pushback from the oil and gas industry and provinces such as Alberta and Saskatchewan, who argue that it is unnecessary and unconstitutional. Neither claim holds water.
Together, Alberta and Saskatchewan are responsible for almost half of Canada’s greenhouse gas (GHG) emissions. The oil and gas sector alone represents more than 30 per cent of Canada’s emissions, not counting the GHGs emitted when fossil fuels are burned.
Industry commitments to voluntarily reduce emissions have gone nowhere. In 1995 the federal environment minister signed a memorandum of understanding with the Canadian Association of Petroleum Producers to cut oil and gas pollution. Since then, the sector’s GHG emissions have increased 40 per cent. This emissions cap is a no-brainer and will finally help ensure that the industry does its part to reach Canada’s climate targets.
If the cap deserves any criticism, it is that it is not enough. Despite the urgency of climate change and the lack of adequate action by provincial governments or the oil and gas sector, the federal government has bent over backward to accommodate provincial and industry interests. The cap level proposed in the draft regulations is less than the industry’s share of needed emissions reductions, and measures to provide companies with additional flexibility further weaken the cap.
While Canada has pledged to reduce its GHG emissions to 40 to 45 per cent below 2005 levels by 2030, the oil and gas cap will only require the sector to reduce its emissions to about 35 per cent below 2019 levels; the sector’s emissions rose more than 15 per cent from 2005 to 2019, so that means the cap will only amount to about a 25-per-cent reduction from 2005 levels, far below the national target.
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What’s more, operators can exceed the cap by paying for offsets or contributing to a fund to help the sector decarbonize. While the industry might argue that offsets and decarbonization funds are appropriate mitigating measures, the following fact remains: By setting the cap lower than where the country needs to be, other industries and the general public will have to pick up the slack.
Arguably, the federal government could have set a science-based target and left it to industry to work out how to comply. That has been its approach for other pollutants, such as asbestos and ozone-depleting chlorofluorocarbons.
But the government probably felt it had no choice. It is likely acting out of an abundance of caution after the Supreme Court of Canada found that it had overstepped with the Impact Assessment Act. Indeed, in our legal opinion, the emissions cap is on solid constitutional ground.
The federal government has been regulating air and water pollution for decades. Canada’s flagship pollution law, the Canadian Environmental Protection Act (CEPA), was enacted during the world’s first major international gathering of climate scientists in 1988.
CEPA has dozens of regulations aimed at curbing pollution from a myriad of sources, including mining, marine shipping, forestry and electricity generation. In 2016, the Federal Court of Appeal upheld federal authority to regulate GHGs as toxic substances under the law.
While Ottawa cannot use CEPA as a back door to regulate provincial matters, regulations aimed at preventing pollution can incidentally affect production. Industry can also choose to stay below the cap by developing and marketing cleaner energy sources.
Both the federal and provincial governments have a role in fighting pollution. Canada’s federalism is built on the premise that the provinces are best positioned to understand the unique circumstances and needs of their citizens, while the federal government ensures unity through its responsibility over matters of interest to the country as a whole.
Arguably, nothing is of greater importance to Canada than combatting climate change. From Lytton to Halifax to Yellowknife, Canadians are increasingly burdened by the impacts of severe wildfires, floods and other climate-driven disasters.
Canada has missed every climate target it has set and is virtually guaranteed to miss its current target without this intervention. A strong, legally enforceable oil and gas pollution cap is critical if we are to do our part in avoiding the worst of the climate crisis.
As the Supreme Court held when upholding the constitutionality of the federal carbon tax, climate change is an existential threat to humanity and the federal government has a role to play in combatting it. If anything, complaints from climate-laggard premiers and the oil and gas sector only underscore how essential a federal oil and gas pollution cap really is.