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Beyond Paris: Reducing Canada’s GHG Emissions by 2030

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Published on June 23, 2021 PDF

This report assesses the impacts of the Government’s plan to exceed the 2030 reduction target for Canada’s greenhouse gas emissions under the Paris Agreement.


Communications

Quotes

  • Increasing the federal fuel charge to $170 per tonne and tightening OBPS will help Canada achieve over half of the 168 Mt reduction projected in Budget 2021. Nonetheless, significant reductions from less visible non-price policies, already announced, will be needed to reach that objective.

  • Our estimates of the cost of announced non-price policies required to achieve the emissions reduction in Budget 2021 (exceeding the Paris target), are based on the assumption that the measures chosen are those with the lowest cost. That is to say, they are inherently optimistic.

  • Our assessment shows that the largest economic impact of reducing emissions will fall on the transportation and oil and gas sectors.

Yves Giroux
Parliamentary Budget Officer

News Release

{"id":16,"created_at":"2021-06-21T07:53:02-04:00","updated_at":"2021-06-23T11:29:05-04:00","slug":"COM-2122-016--despite-additional-carbon-pricing-significant-emissions-reductio--malgre-la-tarification-accrue-du-carbone-le-canada-devra-reduire","title_en":"Despite additional carbon pricing, significant emissions reduction will be required to exceed the Paris target","title_fr":"Malgr\u00e9 la tarification accrue du carbone, le Canada devra r\u00e9duire consid\u00e9rablement ses \u00e9missions pour d\u00e9passer la cible de Paris","body_en":"The Parliamentary Budget Officer (PBO) today released his assessment of the impacts of the Government\u2019s plan to exceed the 2030 target for Canada\u2019s greenhouse gas emissions under the Paris Agreement.\n\nIn his report, Beyond Paris: Reducing Canada\u2019s GHG Emissions by 2030, the PBO estimates that the Government\u2019s plan to increase the federal carbon levy by an additional $120 per tonne to $170, and tightening Output Based Pricing System (OBPS) standards, will reduce Canada\u2019s emissions by 96 Mt in 2030.\n\n\u201cIncreasing the federal fuel charge to $170 per tonne and tightening OBPS will help Canada achieve over half of the 168 Mt reduction projected in Budget 2021. Nonetheless, significant reductions from less visible non-price policies, already announced, will be needed to reach that objective,\u201d said Yves Giroux, PBO.\n\nTo achieve the 168 Mt reduction by 2030 projected in Budget 2021 and exceed the Paris target, the PBO estimates that announced non-price policies will have an effective cost of $91 per tonne\u2014over and above the $170 federal carbon levy. These other policies include regulations as well as incentives to develop and adopt lower emissions technologies.\n\n\u201cOur estimates of the cost of announced non-price policies required to achieve the emissions reduction in Budget 2021 (exceeding the Paris target), are based on the assumption that the measures chosen are those with the lowest cost. That is to say, they are inherently optimistic,\u201d adds Mr. Giroux.\n\nThe PBO estimates that the additional carbon pricing under the Government\u2019s plan will lower real GDP by 0.8 per cent in 2030. Combined with the impact of announced non-price policies, if implemented at minimum cost, the projected level of real GDP in 2030 would be reduced by a total of 1.4 per cent.\n\nAccording to Mr. Giroux, \u201cOur assessment shows that the largest economic impact of reducing emissions will fall on the transportation and oil and gas sectors.\u201d\n\nThe report also notes that the Government\u2019s most recent announcement in April to further reduce emissions by another 30 to 66 Mt by 2030 will require further action. The Government has not yet announced policy measures to achieve this additional reduction in emissions.","body_fr":"Le directeur parlementaire du budget (DPB) a publi\u00e9 aujourd\u2019hui son \u00e9valuation des effets du plan du gouvernement visant \u00e0 d\u00e9passer, d\u2019ici 2030, la cible de r\u00e9duction des \u00e9missions de gaz \u00e0 effet de serre du Canada en vertu de l\u2019Accord de Paris.\n\nDans le rapport Au-del\u00e0 de Paris : R\u00e9duire les \u00e9missions de gaz \u00e0 effet de serre du Canada d\u2019ici 2030, le DPB estime que l\u2019augmentation \u2013 que pr\u00e9voit le gouvernement \u2013 de la redevance f\u00e9d\u00e9rale sur le carbone de 120 $ la tonne, pour la faire passer \u00e0 170 $, et le resserrement des normes du syst\u00e8me de tarification fond\u00e9 sur le rendement (STFR), permettraient de r\u00e9duire les \u00e9missions du Canada de 96 Mt d\u2019ici 2030.\n\n\u00ab L\u2019augmentation de la redevance f\u00e9d\u00e9rale sur les combustibles \u00e0 170 $ la tonne et le resserrement des normes du STFR aideront le Canada \u00e0 atteindre plus de la moiti\u00e9 de la r\u00e9duction de 168 Mt que pr\u00e9voit le budget de 2021. Pour atteindre cet objectif, il faudra tout de m\u00eame r\u00e9duire davantage les \u00e9missions, et ce, au moyen de mesures non tarifaires moins visibles d\u00e9j\u00e0 annonc\u00e9es par le gouvernement \u00bb, a d\u00e9clar\u00e9 le DPB, Yves Giroux.\n\nSelon le DPB, pour obtenir une r\u00e9duction de 168 Mt d\u2019ici 2030 et d\u00e9passer la cible de Paris, tel que le pr\u00e9voit le budget de 2021, les mesures non tarifaires annonc\u00e9es par le gouvernement entra\u00eeneront un co\u00fbt \u00e9quivalant \u00e0 au moins 91 $ la tonne, en plus des 170 $ de la redevance f\u00e9d\u00e9rale sur le carbone. Parmi ces autres mesures, mentionnons les mesures r\u00e9glementaires ainsi que des incitatifs favorisant le d\u00e9veloppement et l\u2019adoption de nouvelles technologies \u00e0 faibles \u00e9missions.\n\n\u00ab Notre estimation du co\u00fbt des mesures non tarifaires annonc\u00e9es qui seront n\u00e9cessaires pour atteindre la r\u00e9duction des \u00e9missions pr\u00e9vue dans le budget de 2021 et d\u00e9passer la cible de Paris repose sur l\u2019hypoth\u00e8se voulant que les mesures adopt\u00e9es seront celles ayant le plus faible co\u00fbt. Autrement dit, il s\u2019agit d\u2019une analyse essentiellement optimiste \u00bb ajoute M. Giroux\n\nLe DPB estime que la tarification suppl\u00e9mentaire du carbone que pr\u00e9voit le gouvernement r\u00e9duira le PIB r\u00e9el de 0,8 % en 2030. Si l\u2019on ajoute l\u2019effet des mesures non tarifaires annonc\u00e9es mises en \u0153uvre \u00e0 un co\u00fbt minimum, le PIB r\u00e9el de 2030 diminuerait en tout de 1,4 %.\n\n\u00ab Selon nos estimations, affirme M. Giroux, c\u2019est sur les secteurs des transports, du p\u00e9trole et du gaz que la r\u00e9duction des \u00e9missions aura les r\u00e9percussions \u00e9conomiques les plus lourdes. \u00bb\n\nLe rapport indique \u00e9galement que la r\u00e9duction suppl\u00e9mentaire de 30 \u00e0 66 Mt, que le gouvernement a annonc\u00e9e en avril dernier, exigera des mesures additionnelles. Le gouvernement n\u2019a pas encore annonc\u00e9 de mesures visant \u00e0 atteindre cette r\u00e9duction suppl\u00e9mentaire des \u00e9missions.","release_date":"2021-06-23T11:30:00-04:00","is_published":"2021-06-23T11:29:05-04:00","internal_id":"COM-2122-016","permalinks":{"en":{"website":"https:\/\/www.pbo-dpb.ca\/en\/blog\/news-releases--communiques-de-presse\/COM-2122-016--despite-additional-carbon-pricing-significant-emissions-reductio--malgre-la-tarification-accrue-du-carbone-le-canada-devra-reduire"},"fr":{"website":"https:\/\/www.pbo-dpb.ca\/fr\/blog\/news-releases--communiques-de-presse\/COM-2122-016--despite-additional-carbon-pricing-significant-emissions-reductio--malgre-la-tarification-accrue-du-carbone-le-canada-devra-reduire"}},"pivot":{"publication_id":452,"news_release_id":16}}