B.C.’s blue sky climate targets laudable … but are they achievable?

Targets, goals, objectives, ambitions, intentions. They are all synonyms and have the same meaning: a thing aimed at, a desired result, something sought. Most points of reference like these are aspirational. In other words, something we would like to achieve but we also know the path might be difficult, if not blocked completely, for any number of reasons. Regardless, setting challenges is usually good for problem solving. It can foster innovation and get us at least part way towards a desired end point. There are also opportunities to change direction or reset as learning happens and the practical limitations of the aspiration become clearer.

In this context B.C.’s greenhouse gas reduction targets are indeed ambitious. This is starkly evident after reviewing the most recent 2018 emissions inventory.[1] The latest inventory points to a significant and growing gap between the trend and the outcome endorsed by policy-makers. The data shows an increase over 2017 of 2.2 megatonnes (MT) or a 3% jump. For some this will be a head-shaking disappointment, especially when viewed against the backdrop of legislated provincial reduction targets of 40% below 2007 levels by 2030, 60% below by 2040, and 80% below by 2050. And so, it must be asked: while B.C.’s climate targets are perhaps laudable, are they realistic and achievable? There are many reasons to be skeptical.

Figure 1

Reaching any of the targets implies a much greater than 1.7 MT per year decline in emissions. The figure of 1.7 MT is a simple, straight-line calculation of the difference between 2007 and 2050, as shown in Table 1 and Figure 2 for 2050. This number includes no emissions growth due to increases in population - estimated at 6.3 million people in 2041, compared to 5 million in 2019[2] - nor from future economic growth, increased trade, and more people working, living, and transporting goods, commuting, and generally moving around British Columbia. Once we account for population growth, the assumed increase in energy demand, and other factors, we believe the GHG emissions reductions required to meet the government’s targets are in fact much larger than 1.7 MT per year. Instead, they are in the order of 4 MT or more. Absent a wholesale restructuring of the economy and/or the emergence of and rapid-deployment of disruptive energy-saving and carbon-reducing technologies, hitting B.C.’s 2050 ~13 MT target will be a herculean task. And meeting the pre-2050 targets will also be a steep uphill climb.

Table 1

Figure 2

To be clear, only in 4 of the last 11 years have provincial emissions declined in absolute terms by even a smidgeon. In 2009, amid a deep recession, emissions were down 5.5% or 3.5 MT from 2008. The following year saw some further small reductions from 2008 levels as the economy slowly recovered. In 2014, B.C.’s emissions fell by 0.5% and then, in 2015, by -1.7% (or ~0.3 and ~1.0 MT, respectively), a direct result of shocks to global energy markets and perhaps the effect of the province’s carbon tax, introduced in 2008 and incrementally increased over time.

Overall, British Columbia’s GHG emissions in 2018 were 7% higher than in 2007. And this despite the province having the steepest carbon price in North America[3] and the deployment of multiple policy, regulatory, and fiscal instruments intended to dampen emissions - e.g., tougher energy efficiency standards for buildings and vehicles, requirements to reduce the carbon content of transportation fuels, along with subsidies and incentives to encourage fuel-switching and the purchasing of less carbon intensive goods.

So where are the province’s GHG emissions coming from? Looking at absolute quantities, transportation is the biggest source at 37% of the total. This is followed by the fossil fuel industry, a majority of which comes from oil and gas production and a minor amount from metallurgical coal mining. Buildings account for 12% of total B.C. emissions, and heavy industry for another 10%. Agriculture, electricity, light manufacturing, construction and forestry and afforestation/deforestation are each less than 5%.

But in terms of emissions growth since 2007, transportation and agriculture together represent 40% of new emissions. Manufacturing has seen declining emissions, albeit with varying increases and decreases depending on the sub-sector. The same goes for waste, afforestation/ deforestation, and the electric sector where >95% of B.C. generating fuels have virtually no greenhouse gases. The latter is a true comparative advantage in the marketplace because it enables the production of B.C.’s lower carbon content goods for export, which can be a positive contributor to the global management of greenhouse gases. See http://www.lowcarbonadvantagebc.ca.

Table 2

Importantly, overall energy intensity continues to improve,[4] both on a per capita basis and per dollar of GDP, meaning British Columbians are using energy more efficiently. And looking at the performance of different economic sectors, including those often criticized for their emissions, it turns out that oil and gas extraction and mining are keeping up with economy-wide energy efficiency advances measured in tonnes CO2e/$ GDP over the same period.

The transportation sector – B.C.’s biggest source of emissions – is also making improvements, but less impressively. Transportation is a key sector when thinking about the scope for GHG emissions reductions both in B.C. and around the world. Globally, transportation-related emissions are expected to grow at a faster rate than emissions from any other sector.[5] But in B.C., this sector presents a difficult challenge. The province has no control over vehicle emissions standards, we do not manufacture vehicles in B.C., and – counterintuitively – when efficiency increases, individuals often respond by buying bigger rather than smaller vehicles.[6] The 2020 pandemic may well lead to higher transportation related emissions as demand drops for public transit and more people rely on personal vehicles. Government policies and subsidies to promote market penetration by EVs may dampen growth in emissions from personal vehicles, but the take up of EVs is likely to be slow and the bulk of the vehicle fleet will continue to consist of non-EVs for the next two decades or more.[7]

Needless to say, given past trends, projected population growth, the province’s small open trade-based economy, and the existence of very few low-cost tools to enable the transition to an economy that emits only 20% of its 2007 greenhouse gases by 2050, at some point B.C. policy-makers may find it necessary to re-evaluate the GHG reduction targets if it becomes clear they can’t be met. Predictably, that awkward task will fall on the shoulders of a future government, not the one that adopted the current targets. One thing is certain: the 2018 GHG inventory provides no grounds for optimism that dramatic reductions in emissions can be achieved in the next decade at other than a ruinous economic cost. And that is before we consider the consequences of the deep economic hole B.C. has fallen into and the enormous added fiscal burden about to be imposed on government by the COVID-19 recession.

[1] https://www2.gov.bc.ca/gov/content/environment/climate-change/data/provincial-inventory.

[2] https://www2.gov.bc.ca/assets/gov/data/statistics/people-population-community/population/people_2019_population_projections-highlights.pdf.

[3] https://bcbc.com/reports-and-research/b-c-s-current-carbon-pricing-system-neither-efficient-nor-fair-for-business.

[4] https://bcbc.com/insights-and-opinions/b-c-ghgs-on-the-rise-but-intensity-is-getting-better.

[5] https://www.itf-oecd.org.

[6] https://www.resourceworks.com/carbon-tax: See section: From Honda Civic to Ford F150: How tastes changed under carbon tax.

[7] https://www2.gov.bc.ca/gov/content/industry/electricity-alternative-energy/transportation-energies/clean-transportation-policies-programs/zero-emission-vehicles-act.