Rising oil and gas emissions counterbalancing progress toward Canada’s climate goals in other sectors, new estimate shows

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Momentum in most sectors toward meeting Canada’s climate commitments is being weighed down by the oil and gas industry, as well as the heating of buildings, according to a preliminary estimate of the country’s greenhouse gas emissions last year.

Estimates to be released Thursday by the Canadian Climate Institute show that total national emissions went up by 2.1 per cent in 2022 from the previous year, an increase that the independent government-funded think tank says is not overly discouraging, in and of itself.

The annual increase is “a lot smaller than we would have expected,” given an unusually high rate of economic growth during a bounce-back year as the COVID-19 pandemic eased, Climate Institute principal economist Dave Sawyer said in an interview.

The broader trajectory, Mr. Sawyer said, suggests that a combination of advances in clean technology and public policy measures has started to significantly bend the curve. He pointed to emissions being down 5 per cent from 2019, the last year before the pandemic caused temporary shutdowns of economic activity.

But the new data set the stage for contentious measures that Ottawa is planning to address the sectors holding back progress toward the national target of a 40 per cent reduction in emissions from 2005 levels by 2030. Most notable is a regulated cap on oil and gas emissions, which the government is aiming to table this fall, against the protests of Alberta and Saskatchewan.

The research shows that the country’s total 2022 emissions were down 6.3 per cent from 2005, driven by progress such as a 55 per cent decrease from the electricity sector, mostly caused by the transition off coal power, and a 15.2 per cent decrease from heavy manufacturing such as steel, cement and mining. But it also says upstream oil and gas emissions went up by 21.2 per cent over the same period.

That increase was caused almost entirely by the oil sands, which boomed and came to dominate Canadian fossil fuel production after 2005, while emissions from conventional oil and from natural gas production have decreased. Emissions from all forms of oil and gas extraction went up from 2021 to 2022, for a total sectoral increase of 2.4 per cent, although that gain was partly attributable to economic factors specific to that year, including fallout from the Russia-Ukraine war.

According to the institute’s estimates, oil and gas is the country’s largest emitting sector, accounting for 26 per cent of all national emissions in 2022. By contrast, the transportation sector – which previously had a roughly equal share – has fallen to 22 per cent, which Mr. Sawyer attributed partly to electric vehicles beginning to take hold.

The country’s building stock, the other big cause for concern flagged by the institute, saw a sharper increase in 2022, rising 5.9 per cent from 2021. Buildings now account for 13 per cent of national emissions.

Mr. Sawyer emphasized that the year-over-year jump in building emissions, caused mostly by fossil fuels used for space heating, was largely due to a colder winter than the prior one. But the longer-term trajectory is also not encouraging, with an 8.8 per cent increase since 2005.

While emissions from homes have gone down somewhat since then, those from commercial buildings have gone way up, which is prompting the Climate Institute to call for more aggressive federal policies, especially to encourage the installation of heat pumps.

Another sector identified by the research as going in the wrong direction is agriculture, as Ottawa has struggled to introduce climate-related policies without incurring backlash. Although nearly flat between 2021 and 2022, agricultural emissions are estimated to have risen 8.2 per cent since 2005, driven by on-farm fuel consumption and the use of fertilizers in crop production.

Further light will be shed on these and other sectors when Environment and Climate Change Canada releases official and more detailed 2022 emissions numbers, likely in the spring of 2024.

The institute’s estimates, which are based on Statistics Canada data, are intended to provide a more timely snapshot of the previous year, to inform policy decisions and debate.

Mr. Sawyer suggested in the interview that Ottawa needs to develop a more up-to-date and comprehensive monitoring system, to help in the development of emissions-reduction pathways for each sector, and to prompt quicker policy responses if those strategies aren’t working.

For now, the latest numbers broadly suggest that, even with signs of progress in many sectors, emissions-reduction efforts need to dramatically pick up the pace – with drops of 5.4 per cent a year needed over the rest of this decade to achieve the country’s 2030 total emissions target.

They were nevertheless welcomed by Environment Minister Steven Guilbeault, who responded with a statement calling the institute’s findings encouraging, because they show that “we have decoupled economic growth from pollution,” through policies such as carbon pricing and the deployment of clean technologies.

“We also know the oil and gas and building sectors remain stubbornly high emitters,” he added, promising to advance targeted policies to address them.