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Energy Policy Options for Canada

A focus on the two largest CO₂ emitting sectors in Canada: the oil and gas industry and the transportation industry

Almost all environmental concerns lead back to greenhouse gas (GHG) emissions. I mean, of course it all leads back to the climate crisis. Most people can agree that it is primarily caused by human activities such as resource extraction and use and agriculture. 

Almost all environmental concerns lead back to greenhouse gas (GHG) emissions. I mean, of course it all leads back to the climate crisis. Most people can agree that it is primarily caused by human activities such as resource extraction and use and agriculture. 

By 2017, Canada became the 10th largest CO₂ emitting country. The oil and gas sector and the transportation sector were the largest GHG emitting sectors in Canada. These two sectors combined account for almost 52% of Canada’s total emissions. Of that, the oil and gas sector accounts for 27% of total emissions and the transportation sector accounts for 24% of emissions. According to Natural Resources Canada, between 1990 and 2017, oil and gas sector emissions increased by 84% and transport emissions increased by 43%. 

This past semester, I took a course called Energy and Sustainability and part of our first assignment was to simulate and compare energy models, policies and statistics for three countries. Using this knowledge and experience, I decided to take a different approach in this article and propose suitable energy policies that could reduce GHG emissions from these two sectors, if applied. With current measures in place, it would fluctuate between 745 to 775 from now to the year 2050. 

Energy Policy Solutions, the energy simulator applied to this research, was developed by Energy Innovation: Policy and Technology and the Pembina Institute. According to Energy Innovation, it was developed to assist policy makers in identifying and implementing cost effective policies towards a low carbon future. As they say on their website, “Well-designed energy policies can reduce pollution, cut consumer costs and minimize dependence on foreign energy suppliers. Done wrong, they can do the reverse and increase pollution, lock in carbon intensive  technologies and waste money”.

In 2017, Canada’s total GHG emissions were 716 megatonnes of carbon dioxide equivalent (MtCo₂eq).

One policy that could be applied to the transport sector is passenger transport and demand management (TDM). This policy is made up of a set of regulations that work towards reducing demand for passenger travel in private vehicles. Some of these policies include improving public transit systems, creating more walking and bike paths, zoning for high density transit, road and congested parking pricing and increased parking fees. These are already effective in municipalities across Canada and more should be encouraged. 

The city of Waterloo, for instance. In an attempt to meet a 2020 emissions reduction target, the city created a local car share system, a region-wide anti-idling bylaw, a regional electric vehicle charging network, an ION light rail transit service and much more. After applying this policy on a national level, CO₂ emissions in Canada for 2050 project to 739 mmtCO₂ from 752mmtCO₂ on the policy simulator.

Another policy that could be applied in the transport industry is an electric vehicle subsidy of passenger light duty vehicles (LDVs). According to Policy Solutions, this policy would make the government pay for a percentage of the purchase price of new electric passenger light duty vehicles. After applying a 50% electric vehicle subsidy, CO₂ emissions would be reduced from 752 mmt/yr to 728 mmt/yr.

For the oil and gas sector, one policy that could work is methane capture. This policy “reduces methane emissions for the industry sector by increasing the capture of methane currently being released into the atmosphere”. Methane is a type of GHG emitted during coal, natural gas and oil production, agriculture processed and the decay of organic waste.

If 97% of the methane capture potential is achieved, CO₂ emissions can fall from 752 mmt/yr to 682 mmt/yr. According to Policy Solutions, if 100% of the methane capture potential was achieved, process emissions in 2050 would be reduced by 81% in natural gas and petroleum, 8% for mining and 86% from the waste management sector.

Lastly, another possible policy for the oil and gas industry is cogeneration and waste heat recovery. As described by Energy Innovation, “this policy contributes to reducing fuel consumption in the industry sector by increasing the use of cogeneration, also known as, “combined heat and power” and “recovery of waste heat to perform useful work”. Simply put, it refers to a process where waste heat from coal fired power stations is used for space or water heating in our residential or commercial buildings. If this policy reaches its full potential, fuel use can be reduced by almost 8% across all industries in 2050. After applying this policy, CO₂ emissions will reduce from 752 mmt/yr to 734 mmt/yr by 2050. 

Only four policies have been selected for two of the GHG emitting sectors in Canada. What impact do they all have together? After applying these policies, passenger transport demand management, methane capture, light passenger electric vehicle subsidy and cogeneration and waste heat recovery, CO₂ emissions in Canada will reduce from 752 mmt/yr to 635 mmt/yr.

This research only answers the questions on “What effective measures can we take?” and not the “How do we do it?” part. Seeing how much impact four policies have means that the results would be outstanding if not only were more policies were applied but other CO₂ emitting sectors were analysed too.


The simulator is available to the public, so you can also try out how policies on different sectors can affect emissions in Canada, Alberta,  Mexico, Poland, Indonesia, India, China and the USA via this link:

Nengi is a fourth year Geography and Environmental Management student at the University of Waterloo. She is a summer intern with A/J