Setting the Pace

The report examines the economic vulnerability of Canada's oil and gas sector due to declining global demand and increasing price volatility. It argues that a 'business-as-usual' approach risks stranded assets and severe socioeconomic disruption. Drawing on case studies from Denmark, Germany, Illinois, and Colorado, the authors propose a 'policy trifecta' of ambitious climate targets, managed energy phase-downs, and proactive economic diversification to ensure an equitable transition.

• Global oil demand is projected to peak and enter a terminal decline by approximately 2030, primarily driven by the electrification of road transport.
• Canadian oil producers are highly vulnerable to market loss and price volatility; they cannot rely on environmental, social, and governance (ESG) credentials to maintain market share as buyers prioritize price and quality.
• The outlook for Canadian natural gas is unsustainable due to declining demand in the U.S. market and an anticipated global LNG supply glut starting in 2025 that will lower prices.
• To align with 1.5C pathways, global oil and gas production must decrease by at least 65% by 2050, meaning no new fossil fuel fields should be developed.
• Canada faces significant economic exposure; oil and gas contribute 32% of GDP in Newfoundland and Labrador and 28% in Alberta, making these regions highly susceptible to sector decline.
• Price volatility has a more severe negative impact on Alberta's oil and gas GDP contributions than a steady low-price scenario, with volatile scenarios reducing contributions by 19% to 21% annually.
• Successful transitions in other jurisdictions (Denmark, Germany, Illinois, Colorado) rely on a 'policy trifecta': ambitious climate policy, energy policy managing fossil fuel decline, and social-equity-focused economic diversification.
• The federal government should eliminate fossil fuel subsidies, divest public investment funds from fossil fuel production, and use the Impact Assessment Act to limit new projects.

APA

Dusyk, N., Cosbey, A., Carter, A., Christensen, L. T., Cameron, L., & Norton, S. (2023). Setting the Pace. International Institute for Sustainable Development. https://www.iisd.org/system/files/2023-06/setting-the-pace-canada-oil-gas-decline.pdf

Chicago

Dusyk, Nichole, Aaron Cosbey, Angela Carter, Lasse Toft Christensen, Laura Cameron, and Sarah Norton. Setting the Pace. International Institute for Sustainable Development, 2023. https://www.iisd.org/system/files/2023-06/setting-the-pace-canada-oil-gas-decline.pdf.

Wikipedia

{{cite report |last1=Dusyk |first1=Nichole |last2=Cosbey |first2=Aaron |last3=Carter |first3=Angela |last4=Christensen |first4=Lasse Toft |last5=Cameron |first5=Laura |last6=Norton |first6=Sarah |title=Setting the Pace |publisher=International Institute for Sustainable Development |date=June 2023 |url=https://www.iisd.org/system/files/2023-06/setting-the-pace-canada-oil-gas-decline.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{dusyk2023setting, author = {Dusyk, Nichole and Cosbey, Aaron and Carter, Angela and Christensen, Lasse Toft and Cameron, Laura and Norton, Sarah}, title = {{Setting the Pace}}, institution = {International Institute for Sustainable Development}, year = {2023}, month = jun, url = {https://www.iisd.org/system/files/2023-06/setting-the-pace-canada-oil-gas-decline.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }