Search Climate Insights Directory

The US Inflation Reduction Act, investing $370 billion over 10 years, threatens to divert private capital away from Canada. The Canadian Climate Institute outlines three responses: strengthening existing policies like carbon pricing, implementing broad subsidies similar to the US model, or adopting a targeted approach based on Canada's competitive advantages.

The document asserts that based on the IEA's 2022 World Energy Outlook, there is no viable long-term scenario for the growth of fossil fuels, including natural gas. It argues that expanding long-lived infrastructure like liquefied natural gas (LNG) is a risky gamble for public funds, especially as Canada faces competition from lower-cost suppliers like the United States and Qatar. The author concludes that the only durable solution to the current energy and climate crises is a dramatic scaling up of clean energy and energy efficiency.

The Canadian Climate Institute's research indicates that climate change acts as a continuous drag on Canada's GDP, with cumulative losses estimated at $25 billion by 2025 and potentially up to $103 billion by 2055. The study highlights that low-income households are disproportionately affected and that proactive adaptation can save $13-$15 for every dollar spent, potentially cutting climate costs in half.

The author uses recent heatwaves and wildfires in Europe to illustrate how climate change exacerbates air pollution and health issues. The text details a feedback loop where petrochemical production leads to plastic pollution, which in turn releases methane and ethylene, harms soil carbon absorption, and disrupts marine food production. It concludes by highlighting the need for holistic legislation, citing the European Union's decarbonization strategy, a proposed UN global treaty on plastic waste, and updates to the Canadian Environmental Protection Act.

The Canadian Climate Institute advocates for a mandatory emissions cap on the oil and gas sector, noting that emissions in this sector grew by nearly 20% between 2005 and 2019. The author argues that current policies are insufficient and that failure to act risks creating 'stranded' high-carbon assets that will increase costs for taxpayers. To be effective, the proposed cap must focus on absolute emission reductions rather than just emission intensity, limit the use of carbon offsets, and not replace the urgent need to reduce methane emissions. Additionally, the policy should utilize market-based instruments like carbon pricing to maintain competitiveness and prevent carbon leakage to other jurisdictions.

The Canadian Climate Institute and Net-Zero Advisory Body advocate for a federal emissions cap on the oil and gas sector, noting that emissions in this sector rose by nearly 20% between 2005 and 2019. They argue that a cap is necessary because current policies are insufficient and that failure to act risks 'locking-in' emissions through high-carbon projects. The authors propose three design priorities: ensuring absolute emissions reductions rather than just intensity improvements, maintaining a focus on low-cost methane reductions, and using market-based instruments to prevent emissions 'leakage' to other jurisdictions.

The report identifies a 'carbon-pricing certainty gap' that inhibits private investment in Canada's industrial decarbonization. It proposes three primary recommendations: introducing carbon contracts for difference (CCfDs) to guarantee the carbon-price schedule, preventing carbon-credit oversupply through strengthened federal benchmarks and public registries, and offering policy-contingent loans via the Canada Infrastructure Bank. The authors suggest that a successful CCfD program could accelerate up to 40 Mt of emissions reductions by 2030 with limited contingent liabilities for the government.

The report finds that climate change acts as an economic drag on Canada, potentially reducing GDP by 12% and household incomes by 18% by the end of the century. Low-income households are disproportionately affected, facing a potential 23% income loss. However, the document asserts that combining proactive adaptation measures with global emissions reductions can reduce total real GDP losses by 75%, with adaptation investments yielding a return of $13-$15 for every $1 spent.

The Canadian Climate Institute argues that the proposed Clean Electricity Regulations (CER) contain ambiguities and exemptions that could undermine Canada's 2035 net zero electricity target. The Institute recommends clarifying the treatment of existing power units, removing financial exemptions for emergency emissions, and phasing out output-based pricing in favor of a full carbon price. To maintain climate credibility and affordability, it suggests the government use financial compliance revenues to procure negative emissions and address equity concerns through targeted public investment and rate design rather than by diluting the CER's stringency.

Scotland is pursuing an ambitious goal of net-zero emissions by 2045, supported by a National Just Transition Planning Framework and a permanent Just Transition Commission. While the government aims to transition its workforce from the oil and gas sector—which contributed approximately 5% of GDP in 2019—to green jobs in offshore wind and hydrogen, it has not set a definitive end date for oil and gas exploration. The document highlights tensions between government policy and demands from unions and NGOs for greater state intervention, including the nationalization of energy, and notes the lack of a sovereign wealth fund similar to Norway's to support the transition.

The document examines the Taranaki region's transition to a low-carbon economy, highlighting the Taranaki Roadmap 2050 and the role of the Just Transitions Unit. It details efforts to diversify the regional economy, support workers through retraining and proposed insurance, and integrate Māori worldviews into success metrics. While praising the proactive and inclusive planning, the author notes that onshore oil and gas permits are still being granted and the long-term effectiveness of the diversification strategies remains to be seen.

Denmark is phasing out all oil and gas extraction by 2050, a goal codified in its 2020 climate law. The transition focuses on the port of Esbjerg, leveraging existing skills to shift from fossil fuels to offshore wind power. Supported by a strong welfare state and a 'flexicurity' model, the government aims to mitigate employment losses—estimated at 10,000 direct and 16,000 indirect jobs—through investments in green technology and international partnerships like the Beyond Oil & Gas Alliance.

Denmark is phasing out its oil and gas sector by 2050, supported by a binding law and a broad political coalition. The transition is centered in Esbjerg, where the government is leveraging the region's energy expertise to pivot toward offshore wind and other renewables. This 'in place' management is supported by a strong social welfare state, the 'flexicurity' labor model, and strategic investments like the C$4.7 billion Green Future Fund. While the term 'just transition' is less common in official reporting, the country relies on long-standing tripartite dialogue between government, unions, and industry to mitigate socio-economic risks.

The document examines Scotland's efforts to implement a just transition, particularly within its significant North Sea oil and gas sector. It details the establishment of the Just Transition Commission in 2019 and the subsequent creation of a national Just Transition Planning Framework. While Scotland has ambitious targets—including net zero by 2045—the paper notes contradictions, such as the lack of a planned phase-out for oil and gas exploration. It highlights regional economic challenges in areas like Aberdeenshire and discusses various policy responses, including the Green Jobs Fund and 'green freeports'. The analysis concludes with lessons for Canadian governments on defining just transition, making concrete job commitments, and establishing accountability frameworks.

The document analyzes New Zealand's proactive approach to transitioning the Taranaki region away from offshore oil and gas. It highlights the creation of the Taranaki 2050 Roadmap, the role of the Just Transition Unit, and the integration of Māori rights and labor unions in regional economic diversification. While praising the inclusive planning and the establishment of the Ara Ake energy center, the author notes that the transition is in its early stages and that onshore oil and gas production remains a significant gap in the country's climate goals.

The Canadian Climate Institute outlines four recommendations to improve Ontario's electricity policy: clarifying long-term emissions targets, expanding the mandates of the Ontario Energy Board (OEB) and Independent Electricity System Operator (IESO) to include climate goals, replacing ad hoc directives with a comprehensive long-term plan, and commissioning periodic technical pathway reports.

The report argues that Canada's oil and gas sector must dramatically reduce greenhouse gas emissions, specifically fugitive methane, to survive falling global demand. It proposes a short-term focus on decarbonizing production through a sector-specific emissions cap and a long-term pivot toward becoming 'carbon management' companies. These companies would leverage Canada's geological advantages to produce blue and green hydrogen, low-carbon chemical feedstocks, and carbon-negative products using carbon capture and storage (CCS) and direct air capture.

The report argues that the Canadian oil and gas sector, which accounted for nearly 27% of national greenhouse gas emissions in 2020, must transition to remain competitive as global demand for crude oil is projected to decline by approximately 80% by 2050. Short-term priorities include a drastic reduction of methane fugitive emissions—targeting a 75% reduction by 2030—and the implementation of a sector-specific emissions cap that declines to net-zero by 2050. Long-term, the author proposes that the industry pivot toward producing low-carbon fuels and chemical feedstocks using blue and green hydrogen, carbon capture and storage (CCS), and biomass. The report suggests creating industrial hubs in locations like Fort Saskatchewan and Medicine Hat to coordinate the production and storage of hydrogen, oxygen, and carbon, effectively transforming oil and gas companies into 'carbon management companies'.

The British Columbia Low Carbon Fuel Standard has reduced annual transport emissions by an average of 6% from 2010 to 2020 and is projected to meet 31% of the province's 2030 reduction goals. The author proposes two main modifications: expanding the scope to include aviation and marine fuels—which are expected to represent 51% of transport emissions by 2050—and allowing compliance credits for direct air capture with permanent storage. To succeed, the document argues the province must address incentive gaps that currently favor renewable diesel over low-carbon jet fuels, account for indirect land-use change in carbon footprint calculations to support advanced biofuels, and expand the geographic eligibility of direct air capture projects beyond provincial borders to accelerate deployment and reduce costs.

British Columbia’s Low Carbon Fuel Standard reduced transportation emissions by an average of 6% annually from 2010 to 2020 and is projected to drive 31% of the province's 2030 reduction targets. The document proposes expanding the regulation to include jet and marine fuels, as well as direct air capture with permanent storage, to address hard-to-abate sectors and negative emissions. To maximize effectiveness, the author recommends closing the incentive gap that currently favors renewable diesel over low-carbon jet fuel, incorporating indirect land-use change (ILUC) into carbon footprint measurements to support advanced biofuels, and allowing direct air capture credits for projects located outside British Columbia to accelerate technology deployment.