Proceedings of the Standing Senate Committee on
Energy, the Environment and Natural Resources
Issue No. 4 - Evidence - March 22, 2016
OTTAWA, Tuesday, March 22, 2016
The Standing Senate Committee on Energy, the Environment and Natural Resources met this day at 5:06 p.m. to study the effects of transitioning to a low carbon economy.
Senator Richard Neufeld (Chair) in the chair.
[English]
The Chair: Welcome to this meeting of the Standing Senate Committee on Energy, the Environment and Natural Resources. My name is Richard Neufeld. I represent the province of British Columbia in the Senate, and I'm chair of this committee. I would like to welcome honourable senators, any members of the public with us in the room and viewers all across the country who are watching on television. As a reminder to those watching, these committee hearings are open to the public and also available via webcast on the sen.parl.gc.ca website. You may also find more information on the schedule of witnesses on the website under "Senate Committees.''
I would now ask senators around the table to introduce themselves. I will introduce the deputy chair, Senator Grant Mitchell from Alberta.
[Translation]
Senator Massicotte: Senator Paul Massicotte from Quebec.
[English]
Senator Black: Doug Black, Alberta.
Senator Seidman: Judith Seidman from Montreal, Quebec.
Senator Mockler: Percy Mockler, New Brunswick.
The Chair: I would also like to introduce our staff, beginning with the clerk on my left, Lynn Gordon, and our two Library of Parliament analysts on my right, Sam Banks and Marc LeBlanc.
Today, we are beginning our study on the effects of transitioning to a low-carbon economy as required to meet the Government of Canada's announced targets for greenhouse gas emission reductions. We are pleased to welcome officials from Environment and Climate Change Canada to start our hearings and speak to us about the current and forecasted emissions for the sector, and the latest developments globally and within Canada since the First Ministers' meeting with respect to meeting GHG targets.
From Environment and Climate Change Canada, we have Dan McDougall, Assistant Deputy Minister, Strategic Policy Branch; Derek Hermanutz, Director General, Economic Analysis Directorate, Strategic Policy Branch; and Mike Beale, Assistant Deputy Minister, Environmental Stewardship Branch.
Gentlemen, with those few words, I'm sure you have an opening statement to present to us, and we look forward to that. Then we'll go to questions and answers.
Dan McDougall, Assistant Deputy Minister, Strategic Policy Branch, Environment and Climate Change Canada: Thank you, Mr. Chair. It's a pleasure to be here to participate at this first meeting of the committee.
I don't really have an opening statement, per se. Our approach has been to just come and hopefully provide you the kind of information that will be of assistance to you as you embark on your work, rather than focus on a statement. We've circulated a presentation that has a lot of data in it that I'll walk through.
Maybe before getting into that, I'll give you a little bit of context that will let you situate your work, as you suggested in your opening, in the global context, if you will.
As you all know, we concluded the new Paris Agreement on climate change back in December. There is one section of it that's particularly relevant to your work. Not all of it is relevant, but as you're embarking on a low-carbon development pathway, there is a provision in the new Paris Agreement that calls upon all parties to the United Nations Framework Convention on Climate Change to do so. That's Article 4.19: "All Parties should strive to formulate and communicate long-term low greenhouse gas emission development strategies...'' is the request within that.
It's also accompanied by a decision of the Conference of the Parties that invites parties, pursuant to that article of the agreement, to communicate to the secretariat of the convention by 2020 what their low-carbon development strategies will be. So it sets out an actual time frame for doing that and for those to be published within the UN convention secretariat so that everyone can participate.
If you will, that's the global context for the work you are embarking on here to assist Canada in working on that.
A further development on that front came very recently with the visit by the Prime Minister to the United States. In the joint declaration issued by Canada and the United States from that meeting in Washington, President Obama and Prime Minister Trudeau committed, in 2016, to completing a mid-century, long-term, low greenhouse gas emission strategy pursuant to the Paris Agreement and to encouraging this approach with members of the G20. In effect, the two countries have upped the time frame that was provided for in the Paris Agreement — 2020 — to getting the work done this year in terms of the work that's in your mandate here, and to showing some leadership within the G20 so that we can help some other countries along the way in doing that.
Those are two particularly significant developments.
A third point I might highlight is the Vancouver Declaration. Within that, there is a commitment by First Ministers across the country to work on four streams of activity, one of which is dealing with clean tech, innovation and jobs. So that is pretty fundamental to the work that will underpin a low-carbon development strategy.
Then there are two other working groups that will be focused on reduction and mitigation of greenhouse gas emissions, one dealing with carbon pricing and the second one dealing with other mitigation activities on a more sectoral basis. This will perhaps relate back to the work I will show you in a moment on the slides and what the emissions projects are looking at.
Within that specific sectoral mitigation work, eight specific subgroups will be set up to look at discrete elements of how we can reduce emissions in the short term in order to meet the targets that we have set for ourselves under the Paris Agreement. It does all kind of tie together.
There's a fourth group that's looking at adaptation, since that's pretty fundamental to everything we're doing, since all of this work on mitigation will actually take quite some time to be felt on an atmospheric basis. We have a lot of climate change that's locked in.
With that kind of setting, the international and domestic context work —, if I might, Mr. Chair —
The Chair: Please do.
Mr. McDougall: I believe everybody has a copy of this.
The first slide picks up on a point I just made. As you look at it right here, Canada's climate is changing. The reality is that in Canada, we are quite severely impacted by the effects of climate change. We have experienced, thus far, twice the global average almost in terms of the effect of greenhouse gas emissions. It's even more severe in the Arctic.
We talked in the Paris Agreement about a 2-degree goal globally and striving for well below 2 degrees to a 1.5- degree target.
As you'll see in this first slide, in Canada and the Arctic, we've surpassed the 2-degree goal already if you were to apply the global number to the Canadian context. We're at 2.2.
You'll also notice from this slide that it's not uniformly distributed. You're seeing a lot of temperature rise in the Arctic and also on the West Coast in particular where we're seeing higher levels of heat.
Similarly, the second little graphic there deals with the precipitation patterns. That is, again, very significant in terms of what is happening with both the amount of precipitation increase or decrease and how it's distributed regionally across the country.
All of these things are expected to intensify significantly over the coming decades. I think the scientists will tell you that whatever is happening globally, you can expect it to be at least twice as strong in Canada. That's just simply the effects of our northern latitude and how these things play themselves out.
The next slide gives a bit of information about some of the benefits of changing climate change policy and actually taking action on this. This is important in terms of how you frame the discussion around climate change. A lot of it has been, over the years, formed just on the basis of pain and cuts and how much it's going to impact in terms of taking action. The corollary to that is there are actually enormous economic opportunities associated with climate change as well as we start to make a transition and some fundamental structural changes in the economy, both in Canada and globally.
Here you get just a little bit of information on the clean tech sector and how it has been growing both in Canada and globally and how it's projected to grow over the next little while. As you can see, it's projected to grow to $2.5 trillion by 2022. The Canadian technology sector is actually fairly well positioned in a lot of the markets to take advantage of some of this growth.
The other aspect of this is of the changes that are made as you look at reducing emissions in the corporate sector and also in individual families and communities. There are cost savings to be had because all of these measures are typically providing much more efficiency to operations, either on an individual level or a corporate level. That's of enormous benefit as well.
All that is to say that as you look at doing what's necessary to reduce emissions, enormous economic opportunities are associated with that as well. In forming the narrative on that in a way that resonates with individuals, with businesses and with society in general, it makes it easier, perhaps, to take some of the action that is going to be necessary.
Again, the flip side of not taking action is that there are a lot of costs associated with the change in climate. We're increasingly starting to see that factored into decision making. Certainly the insurance industry has been doing a lot of work on that front. They've been faced with a lot of costs due to both weather and climate. Sometimes it's very difficult to separate those two things out, but it's fair to say that regardless, there are a lot of insurance-related claims and damage caused by the changing environment that we're in.
As you'll see on this slide, the World Economic Forum has ranked climate change as the most severe economic risk facing the world.
I will turn now to the next several slides and go through what you asked us to bring to the table here in your reference to us. The first slide gives a little bit of context for that. Derek runs an economic modelling agency in our department. He's got some of the best economists you'll find around working on this stuff right within our organization. We do this across government to provide the information base that's necessary to support and inform decision making on this.
Our science group publishes an annual inventory of emissions. This is published mid-April of every year, and there's about a two-year lag time for the data in it. The 2015 report had 2013 data in it. We'll soon be publishing 2016 with 2014 data in it. We then take that and, using our economic models, project emissions out as to what they would be in future years given a certain set of assumptions.
The next page goes through what some of those assumptions are. Some of the big ones are noted here: gross domestic product, and the growth rate of that is obviously very important. We tie our projections to whatever the Department of Finance projections are, so it's consistent with the overall economic picture.
You can see what they are here. We've split it up into current up until 2020, and then the next decade, from 2020 to 2030.
Our reference cases, we perform some sensitivity analysis around these things, around what happens in various scenarios. In a reference case of 2.2 percentage growth over the first decade, decreased growth over the second decade is what we've got.
Similarly, we use population growth projections from Statistics Canada, from their references cases, the medium- growth projection scenario. Those two factors have an enormous influence, obviously, on what the emissions projections will be for our modelling.
The other thing that's really important in terms of emissions is our assumptions surrounding the price of oil and gas, as a lot of our emissions either on the consumption side or on the production side are associated with that.
In here, we use the projections the National Energy Board makes on production. We integrate our work with a lot of the experts in their own fields who are doing their own projections on this, so we have a comprehensive picture that's tied to the overall economic framework of the Government of Canada.
What we get when we do that, you'll see on the next page, are our projections under those three scenarios — so a high-price scenario; a high oil production reference case, which is kind of the middle of the road; and a low-price, low- growth scenario — out to 2030 in relation to the two targets that we have for both 2020 and 2030. So what you'll see is a fairly significant gap between where we need to be and where we are now.
These scenarios are not really a crystal ball. It's really just an economic projection of where things would be if nothing else changed. So given the current set of policies that are in place both at the federal level and in the provinces and territories — and the date that we had for the cut-off for this was as of September of this past year — if nothing else changed, this is what our model shows emissions would be under that policy framework that we have. What that is showing is that we have approximately, if you take the reference case, the middle line there, about 300 million tonnes of annual emissions that need to be reduced by 2030 in order to meet the target of minus 30 over 2005 levels by 2030.
So this is, if you will, clearly making the case for what the government has embarked on in terms of a pan-Canadian framework and the work being undertaken through those working groups to come up with policies and measures that will actually change the shape of these curves and bring us down towards these targets in 2030 and as we look out to the longer-term development strategies, out to 2050 and the end of the century, what other transformative structural changes are made to continue a new trajectory of downward emissions growth within that.
The next several slides break that down in somewhat more detail. I think you had asked for projections by sector, so we've taken the various sectors that we use here in Canada in terms of oil and gas, transportation, buildings, and EITE or emissions-intensive trade-exposed. These are sectors like cement, steel making and things like that that are heavy on the emissions side and for which small changes can have a fairly significant impact on what happens to the entity itself as an entity. It's trade-exposed because if things tighten down too much, what will happen is they'll just pack up and leave, and the emissions will go elsewhere. You don't decrease emissions; you just move them to another part of the world. That category tends to get lumped together. Others are agriculture, waste, electricity and steam.
Here you can see a breakdown for various time periods of what that looks like in Canada for those various sectors.
The complementary piece to that is the information by gas. Carbon dioxide is obviously the bulk of the emissions that we're focused on. It's particularly important because it lasts in the atmosphere for a very long time. Going back to the adaptation side of things again, because carbon dioxide lasts in the atmosphere for up to 100 years, whatever you do now to decrease carbon dioxide is going to take a long time to play itself out. On that basis, adaptation becomes very important because a lot of the changes are actually locked in.
Some of the other gases, though, are much more potent than carbon dioxide. Methane, for example, is about 25 times more potent in terms of its greenhouse gas impact than is carbon dioxide, and it lasts a much shorter time in the atmosphere. You can take action on it and have a much more immediate effect on actually reducing temperatures.
Some of the work that Mike is doing on regulations that were just announced with the U.S. on methane has a double whammy effect, if you will. It has an important effect because it is so potent and has a 25 times greater impact than carbon dioxide, but it also has some very short-term implications for reducing temperature more immediately. It's a very necessary complementary measure to the work on carbon dioxide over the longer term.
In the next few slides, we continue to break that down a little bit as we look sector by sector. Also on these slides, we've included a number of the existing measures that are in place either federally or at the provincial and territorial level, so that you can see the actual actions being done by various jurisdictions now. We're not starting from scratch on this. A lot of work has gone on in a number of jurisdictions as well as globally on this, so the information certainly exists. Again, it's sector by sector. For some of them you can see we're on a very different trajectory. For example, on the next page on electricity, Canada has one of the most decarbonized electricity regimes in the world already. Over 80 percent of our electricity generation is already greenhouse-gas-free in terms of its emissions profile. There's still more we can do there, and that's one of the subgroups we'll be looking at under the pan-Canadian framework, but we're starting from a very good place. Also, electricity generation is kind of fundamental to, again, those long-term structural changes, so if you can get that part of your economy working in a low-carbon way, a lot of other things can flow from that.
With transportation, there are a number of different areas to look at: passenger transportation, heavy-duty, on- road, off-road. We've done a lot of work on the light-duty side, on tailpipe emissions. You'll probably hear something in the budget about infrastructure, public infrastructure and public transport. We're working with provinces and territories on that. Some good work has started already on the heavy-duty side. Mike Beale, our regulator, is doing more on the heavy-duty side for the next phase of heavy-duty emissions. You can see how important that is.
I would just point out that given the integrated nature of our North American economy, both on the production side in the automotive sector and also in transportation generally and the flow and movement of goods, all of our work in this is perfectly aligned with that of the United States and increasingly so with that of Mexico. We're really taking a North American approach on this.
On this next slide, in terms of emissions-intensive trade-exposed, what you might find interesting is that we've broken down the various components of that, so you can see which is the more significant of those in terms of the emissions coming from here now. Chemicals, fertilizers, iron and steel, smelting and refining, cement, mining, pulp and paper mills, lime and gypsum are the main categories we have broken down here. Similarly, we see the building sectors and other areas, commercial and domestic, where we have significant emissions reductions possibilities in Canada, and then agriculture, waste and others.
That's the information that we hope will be of use to you as you embark on your study. We can certainly take any questions today. If you're interested in drilling down further on any of this, we can certainly do that. I've just included a couple of concluding slides here. I mentioned earlier that the emissions projections we have here are based on policies that were in place as of September of last year. Since September of last year, we've had a number of developments. Most notably, Alberta's new Climate Leadership Plan was announced since then. That's not included in these projections. These are actually overstating, if you will, what those projections would be if we redo them now. We haven't been able to yet because we're still working out the details on that. Our next report will include greater details on this.
Ontario has come out with a cap and trade program that they're now in the midst of seeking to fix in legislation in the province. The effects of that are also not included in this. Again, it's something of an automatic overstatement of these numbers. They will be lower because of the potential effects of this. Saskatchewan had a major announcement as well in terms of its plan to generate 50 percent of its electricity using renewable energy by 2030.
This is an ongoing process that we have where ideally people are coming up with new policies all the time in order to reduce emissions. We catch up more or less on an annual basis.
Finally, there are two other little bits of information for you that situate the Canadian target vis-à-vis some of the targets of other countries that have been announced internationally as well and how we compare. Bloomberg is one of the studies that have done a fair bit of work on this leading up to the Paris conference and the agreement that was held there. You'll see Canada's current target is pretty much in line with those of a number of other countries, if you look at it in terms of the amount of effort required to reduce emissions because we have higher emissions growth projections in some other countries.
There you have it. That is all I have for the moment. Please ask questions, and if we need to follow up on any other information, we'd be pleased to do that as well.
The Chair: Thank you very much. That was a great presentation. We'll start with the deputy chair.
Senator Mitchell: Thanks. That was a very compelling presentation. I like the fact that the assumption here is that we have climate change and it will have impacts. It's nice to see that we're acknowledging that; thank you.
My first question is with respect to the figures you note on slide 6. Your average annual growth is largely directed by or related to oil and gas prices, and you say you base it on Finance Canada. Is Finance Canada now starting to calculate in these projections the amount of economic impact and excess GDP growth due to investment in climate change mitigation and things like renewable energy?
Mr. McDougall: Not explicitly, I would say. To the extent that those are part of economic growth more generally, they are captured there. They don't break them out as a separate category, per se. Some other studies have been done that look at the Canadian sector, the clean tech sector, if you will, and what the growth has been in it and what it's projected to do.
Some other work has been done on that, and we could certainly, with your researchers or clerk, get copies. We tend to track that stuff, so we can get a list of the reports and copies of them to provide to your committee.
Senator Mitchell: That would be excellent if you would. I would appreciate that.
We continually run into this economic argument that any other form of energy is too expensive. It is interesting that if we invest in traditional forms of energy it's seen as an investment, but if we invest in non-traditional, renewable energy it's seen as a cost. That goes back to my first question.
To further that point, are you able to make projections as to the reduction in cost for wind, solar, biomass and other kinds of renewable energy to a point where you can start to see where those costs will converge with traditional forms of energy production?
Mr. McDougall: We don't do that work internally. Again, there are studies done externally that look at that.
Our internal work focuses perhaps a little bit more on the regulatory side. As we go to taking regulatory action, and here Derek's team does the work on this, we look at the cost-benefit analysis and the economic costs and benefits that are associated with those particular measures so that we can see whether they are having a net positive or negative effect overall. That's not a narrow definition. We use a broad definition of this.
We use what is called the social cost of capital as part of that. What are the hidden or implicit costs that you wouldn't perhaps otherwise look at that are associated with emissions and pollutants? Again, we have agreed to align that with the United States as well in the work they do on their regulatory front, so as we're looking at the costs and benefits, we have a complete picture of what is happening.
Senator Mitchell: Yesterday in the Defence Committee we were looking at the security threats. It was quite striking that a professor from Dalhousie indicated that by far and away, a greater threat than what we would think of terrorist attacks in Canada would be when you go and speak to a port like Port Metro Vancouver and hear their concern that rising sea levels will render their port seriously disabled and dysfunctional.
Have you factored that kind of threat into your cost projections with respect to not acting as quickly as we can?
Mr. McDougall: I would say perhaps at a global level we have. We don't go down to the individual port level. As we are looking at adaptation and the cost of not acting and what that implies for adaptation, there is some element of that. There is not a tonne of information, I would say, on that front.
Perhaps more generally, as you look at security and climate change, work has been done, both in Canada and internationally, on the nexus between climate change and security issues and between climate change and migration and things like that. It's an increasing area of research where people are starting to make these connections, but in terms of hard data it's difficult to quantify some of these cases.
Senator Mitchell: I have one last question. This is really technical, and it's to do with terminology on page 17.
You mentioned the required change in emissions intensity to meet the announced targets. I'm from Alberta, and we talk about emissions intensity in the sense of how much is emitted in the production of a given barrel. This is kind of the reverse of that, isn't it? Could you clarify that?
Mr. McDougall: It is the reverse of how you normally think of this. This comes from one particular study. It's the way Bloomberg uses it. They were trying to find a common base they could use to make comparisons across countries. They looked at a GDP level and decreasing on that.
Senator Mitchell: It's per unit of GDP somehow?
Mr. McDougall: Yes.
Senator Mitchell: Thanks.
[Translation]
Senator Massicotte: I would like to continue on the same topic. On page 6 and page 7 especially, the perspective suggests that all of the government policies that were put in place and all of the programs in place are productive and applicable. Consequently, in 2030 we will have 815 megatonnes, whereas our target was 524 megatonnes, which means that Canada's emissions are 40 percent too high with the current government policies, with the exception of policies in Alberta and Ontario.
In spite of all the lovely projections we produce for all of the government programs, they often do not become reality. There are exceptions, but when we note a discrepancy of 40 percent, it is often 50 or 60 percent, because there are always delays. Calculations and theories are all well and good, but in practice, things are different. I am among those who believe that we absolutely must embrace change. Change is a huge challenge, but it is very important, and I am on board. However, I am a bit cynical, and perhaps I am being the devil's advocate. We have a 40 percent gap over 15 years, roughly 3 to 4 percent per year; we have nice agreements, we all agree on the needs, but we are too far from the goal.
You do not mention this in your projections, and it may be rude to say it out loud, but we need major, crucial, frontal change; we need a huge change. A change of culture at the outset, and we accept it, but I wonder if we are not wearing rose-coloured glasses, because people think that we will always have the necessary energy. However, when are we going to talk about real things, and say to Canadians, "Be ready. This is fundamental; we have to get on board.''
We talk, and there are polls that show that people do not want to pay $10 more a month to have access to a certain type of energy. It is nothing when you consider that these are necessary changes. Am I mistaken? In reality, I think most of the work still remains to be done.
Mr. McDougall: I agree entirely with the point you have made. Firstly, it is important to have the right figures. Everyone has to know what is going to happen if there are no changes. Then, on the political front, the minister held a meeting on climate change with his counterparts last January, and we insisted on the numbers so that everyone would know that the challenges we face are enormous.
As you said, over a 15-year period, it will be necessary to reduce emissions by twice as much, a goal we have never reached over a decade. This is a big challenge, and that is why we have begun a process with the provinces and territories so as to put in place a plan, a strategy, before considering another target; a 30 percent reduction is really difficult to achieve. It is not that there are no targets, but there is no plan to reach the targets.
Senator Massicotte: The International Energy Agency — IEA — is conducting studies. According to its projections, despite the environmental policies put in place by all governments, global warming at this time is increasing by 4.5 to 5.2 percent. This is not what had been promised. We are very far from the 1.5 or 2 percent target. It is all well and good to tell ourselves that everything will be for the best, but we talk about the economy and argue over technical matters. I get the impression that we are not talking about real things. We are far from holding real debates on the means we are going to take to reach the objectives.
Mr. McDougall: First of all, the measures that were proposed by the countries before the Paris conference indicate that the temperature increase following the implementation of all of the Intended Nationally Determined Contributions — INDC — would be 2.7 percent, if I remember correctly. So that is better than what was forecast by the IEA, but there is still work to be done there. The other important aspect is the structural element of the Paris Agreement. Every five years, other documents will be tabled.
[English]
Senator Black: Thank you for being here and for doing the work you're doing.
Canadians, and certainly Albertans, whom I represent, accept the necessity of doing what we can to minimize carbon footprint, but Albertans are also practical people. I want to talk with you about some of the statistics you have shared with us, and perhaps you can help my understanding about how we square the circle and achieve a balance between our definite need to minimize our carbon footprint and protect the standard of living that Canadians have come to enjoy. That's what I'm going to be focusing on.
To start that process, can you share with us the percentage of carbon emissions that Canada has globally? Would that be 2 percent?
Mr. McDougall: It's actually less than that now. It used to be 2 percent a few years ago. The last time I checked, it was down to 1.6 percent.
Senator Black: That's what I understood.
Mr. McDougall: And not because we have been decreasing that enormously but others have been growing enormously.
Senator Black: But, generally speaking, the Canadians listening to this meeting should understand that, of global carbon emissions, Canada is responsible for 1.6 percent?
Mr. McDougall: Correct.
Senator Black: Very well. You have indicated to us today that our goal is to take 300 million tonnes from the environment and atmosphere by 2030, which will mean we will have to double the efforts that we have made to date. A wonderful goal — we all agree it's a wonderful goal. But tell Canadians how we are going to maintain our standard of living and our prosperity while achieving that goal. I'm not saying it can't be done; I just want you to tell us clearly the two or three steps that are going to have to be done to achieve that balance.
Mr. McDougall: As an official in the government, I don't have all of the answers for you. However, I would point out, as I mentioned at the start, that how you approach this question is really important. Part of the approach on the question is the emissions reductions, yes. The complementary approach, though, that needs to be taken is, how do you continue to do that while growing the economy?
If you listen to my minister and how she has discussed this, about before, during and since Paris, if you listen to the Prime Minister and how he has done it, if you listen to first ministers across the country, it is very much framed in the context of the imperative of maintaining our standard of living and looking what the economic opportunities associated with this are. It's not all just putting on a hair shirt.
As I tried to indicate at the front end of this, the growth possibilities are quite enormous on the global stage. This goes back a bit to Paris and that everybody took commitments there. Everybody is expected to live up to them. As they do that, enormous changes will be taking place in a lot of countries that are growing much more significantly than Canada, whether they have growth rates of 6 percent to 8 percent per year. A lot of those changes are taking place in areas where Canada has a particular economic advantage, because we have made some of these changes already. Our companies know how to work in that space. We have an excellent trade service in our country, as well. We have programs of support for export development.
So a lot of possibilities exist for Canadian companies to take advantage of this, domestically, in a North American continental basis and also globally. That is very much part of the framing of this issue by the government, and it's very much a part of the work that is going on in the pan-Canadian framework, as well.
Senator Black: I support that. I hope you're right, but the key word is "we hope we're right on that.'' So to achieve our goals and to maintain our prosperity is going to be based on a lot of good luck and hope.
Mr. McDougall: And hard work.
Senator Black: Don't doubt hard work; we're Canadians.
I have one last question for you. In terms of targeted areas, what are we doing to target consumers' use of energy in order to address the challenge? My understanding is that the largest sector of carbon emissions would be me, you, driving to work, running our toothbrushes and other things. Talk to me about what you're doing to align, impose upon and let Canadian know that there is going to be an imposition on them, personally. What are you doing there?
Mr. McDougall: There are two things. One of the policy pieces, if you will, that is important to this is carbon pricing and actually putting a price on emissions so that this is not an externality anymore; it is actually built into the workings of our economic system. That is one of the fundamental things this government has been talking about.
In and since Paris, and with provinces, we now, for the first time, have a pan-Canadian framework, starting with the Vancouver Declaration, with an implicit assumption that carbon pricing will be part of that approach. As you get a carbon pricing regime in place, that automatically does what you're suggesting needs to be done. If it's designed to cover a wide spectrum of emissions, that will move down to the consumer level.
Senator Black: In part, you would agree — not in whole.
Mr. McDougall: In part.
In the Vancouver Declaration, there is also talk of a complementary process of public engagement and communication. We're also looking at that and what we can do, including what we can do in that space in terms of behavioural economics, if you will. There is a lot going on in a number of countries on this front, where you can actually start to shift consumer behaviour and make different choices.
Then, third, a lot of it is just awareness. This type of information is important to that.
Mike Beale, Assistant Deputy Minister, Environmental Stewardship Branch, Environment and Climate Change Canada: I would just add that another element is our vehicle regulations that we already have in place. It's kind of an interesting example in terms of the cost. I'm not sure everybody out there recognizes that the vehicle regulations that Canada and the U.S. jointly have are very ambitious, and the ones that we recently brought into place run out in 2026. It's really kind of revolutionizing the way that car manufacturers make their cars. It's a real shift in design and materials that they use. It's leading to very significant greenhouse gas reductions per vehicle. Consumers are part of that. Consumers pay for that in a higher cost of their vehicles. It's borne by them. But one of the things we have found through Derek's analysis, when we do these regulations, is that consumers can actually recover the increased cost of those vehicles in about three years.
Yes, they are more expensive and consumers are paying the cost, but because they are burning less gasoline, they recover the cost quite quickly. It's actually an interesting example of how the economy and environment will go together.
Senator Black: Thank you gentlemen, I appreciate that.
Senator McCoy: You were kind enough to mention that some of the newer initiatives have not been included in the modelling. That brought me to your page 10, your slide on electricity, and so I was going to make a request and tweak you just a little because the second bullet says "Ontario coal phase-out.'' Of course Alberta announced our coal phase- out. Was that before or after Christmas? I think it was before Christmas. That's in case you're presenting this to somebody else.
I'm from Alberta. We have shifted considerably. We should take credit for that as well as the cap we've put on oil sands emissions. Not only is it a matter of regional pride, but also I think it is very important for Canada that we send this signal to our potential customers in other parts of the world, in particular Europe but also Asia, that these measures have been brought in. I would really appreciate your plugging that in everywhere you can.
I also thought that another initiative very much to your point about those who have the good fortune to have large hydro developments include Newfoundland, but now one of the more significant collaborative efforts in Canada is the Atlantic collaboration around the new Muskrat Falls development. I would put that in as one of your leading existing measures, because that will also have a good impact on the emissions in the other Atlantic provinces. That was a point I wanted to make.
I wanted to ask you about Mission Innovation, which was announced in Paris with Bill Gates being the prime mover behind it. There were 20 countries. Standing on the stage was BarackObama, and Justin Trudeau right beside him, announcing Mission Innovation that pledged these 20 countries to doubling our investment in clean energy R&D. Which department will that go to in Canada?
Mr. McDougall: There are probably a couple of departments most involved. Natural Resources Canada is one of them, but also ISED, Innovation, Science and Economic Development.
Senator McCoy: We should follow that up with them.
The green tech alliance came out with that open letter to the Prime Minister on the same day as the Vancouver Declaration, and that really goes to Senator Black's point. These people are so convinced we're going to make so much money if only we had the right policies in place. I suppose we should not bother you with that, but bother industry and NRCan then.
Mr. McDougall: Yes, both of the areas that you commented on, so under the mitigation activities of the working group under the Vancouver Declaration, electricity will be looked at there but not just generation; it's generation and transmission. It is good to have both parts of the equation.
Senator McCoy: Yes, it is.
Mr. McDougall: Certainly Muskrat Falls benefits all of Atlantic Canada. Work has been talked about between Quebec and Ontario on this front. Manitoba and Saskatchewan have made some arrangements as well.
Senator McCoy: Manitoba and Alberta are talking about it. They have made no deal yet, but they're looking at it, yes.
Mr. McDougall: Historically our grid has gone more north-south on a regional basis than it has gone east-west.
Senator McCoy: We never could afford to go east-west before.
Mr. McDougall: Now we're starting to look at some of the interconnections on that basis as well. The electricity folks at NRCan are involved with this as well.
Another bit of work going on is by the Council of the Federation under their Canadian Energy Strategy that the Government of Canada is now going to be joining on as well.
Senator McCoy: Oh, good.
Senator Seidman: Mr. McDougall, when you spoke about the electricity sector, you said that it's extremely efficient already, but you did say there's more we can do, and you weren't specific. You didn't go on from that. Might I ask you to please tell us what you meant by "But there's more we can do''?
Mr. McDougall: There are a number of areas where there are things we can do. It goes back to the two basic structural elements on generation. There's a lot happening on the generation front. More hydro developments are still taking place. Muskrat Falls, for example, is one phase of development. There's a second phase of that called Gull Lake, I believe. That's phase two of that same Churchill project. That's further out; that's not there yet.
As you look across the country, a number of hydro projects are still coming into fruition. Where we're going on solar, geothermal and wind are also important aspects on the non-renewable side of things.
Transmission, again, is an important element of this. How do you make those east-west regional — perhaps not national — connections so that other jurisdictions that may not be blessed with some of the natural resources for generating can take advantage of the low emissions potential associated with that? There are a number of things there.
Similarly, on a Canada-U.S. or even continental basis, there is another area of work with our partners down there as well for some of these interconnection aspects on that front.
Senator Seidman: How would you estimate the state of the electrical infrastructure at this time, and what kind of investments would you see in meeting those particular aspects of generation and transmission?
Mr. McDougall: I'm the policy guy, so I stop once we get down to that level of specificity perhaps. That might be a good place for your committee to perhaps drill down with some of our colleagues at NRCan on the electricity side. They are the folks who are the experts on electricity generation and transmission. We try and set up the box in which they can play to make sure that that's happening.
Senator Seidman: I would like to ask you about the northern communities because this committee did a study on energy in the North. During the first ministers' meeting in Vancouver earlier this month, the government committed to advancing efforts to eliminate dependence on diesel in indigenous, remote and northern communities.
When we did our study on energy use and supply in the northern territories, many witnesses explained that diesel is the most inexpensive, reliable and efficient source of fuel for the northern territories. Knowing that there is this dependence — and I'm not saying that it's the best state of affairs by any means — especially in remote, off-grid northern communities, how would your plans eliminate or reduce that kind of dependence?
Mr. McDougall: Again, I don't pretend to have all the answers on this other than to say it is one of the areas that the federal and provincial governments will be looking at. In the Canadian Energy Strategy announced by the provinces last July, they too focused on this as a potential area, so some work has been started under that strategy that might be advancing.
The whole area of technology in this space continues to evolve fairly quickly. What's true one year may change somewhat radically from one year to the next. As we're looking at this, we're not looking narrowly at the amount of greenhouse gas emissions associated with this because they will be fairly small. We're taking a rather larger lens to this and looking at the health aspects associated with this as well. A recent study came out from the health department on the health impacts of diesel emissions. As you start to look at that in small and remote communities, potentially significant impacts of that need to be factored in as well.
Again, as you start to look at the costing around this, it's not just narrowly about greenhouse gas emissions but some of the other aspects associated with it.
[Translation]
Senator Bellemare: Mr. McDougall, if I go back to the greenhouse gas emissions projections — I think this is on page 6 or 7 — the low-growth scenario is a scenario that creates the fewest greenhouse gas emissions, whereas the high- growth scenario creates much more, all things being equal.
I would simply like to point out that this model is somewhat contradictory, because in the high-growth scenario, which is not that high in terms of economic growth, we are getting further from our objectives. In other words, if there were a sudden catastrophe and the unemployment rate increased in Canada, we could perhaps reach our objectives. However, I am not that sure, because with the high-growth scenario higher-income people can change their behaviour to diminish their energy consumption, whereas the low-growth scenario will mean that people will consume more energy, because their budget will prevent them from insulating their windows, for instance, or from buying green vehicles. I simply wanted to point that out. It is good to say so, because it is not contradictory. Even if it seems contradictory, it is important to point this out somewhere in the report.
Would you be in a position to assess the impact of a carbon tax on these projections? Have you tried to evaluate the effect of such a tax on greenhouse gas emissions?
Mr. McDougall: First of all, I want to say that you have articulated the problem well. That is the reality.
[English]
The other aspect is that there has been a decoupling over the last number of years between economic growth and emissions. We've seen that starting to happen. It's no longer the case that they're going in lockstep. They're going in different trajectories.
We're in a situation in Canada now where we have growth going one way, up, and emissions starting to go down at the same time. It is possible, and it is happening.
[Translation]
Regarding the impact of carbon taxing on projections, yes, we have the capacity to examine the impact of such a measure at various levels, and its application in certain sectors.
Senator Bellemare: Have you tried?
Mr. McDougall: Yes, we have begun.
Senator Bellemare: And what is the result? Is it possible, with these techniques, to reach our goals?
Mr. McDougall: Yes, it is possible. It would require other changes and a rather high level of carbon pricing. Various other measures would have to accompany carbon pricing. Almost all of the countries and provinces that have brought in carbon pricing have used other complementary methods. Carbon pricing is almost never used on its own. The level of carbon pricing would be difficult to apply otherwise. The challenge is to find the balance between carbon pricing and other measures.
Senator Bellemare: When you did your assessments to measure the impact of carbon pricing, in the model you used, was the hypothetical pricing high? Did it trigger a large price increase? Could you give us a range, following the tests you carried out in your economic model?
Mr. McDougall: Yes, that is something we can examine.
Senator Massicotte: And what figure did you come up with?
Mr. McDougall: I don't have the figures in front of me, but it was quite high. The reality is that carbon pricing is almost never used alone, but is accompanied by other measures.
[English]
The Chair: Thank you.
Senator Mockler: I have only one question. I'd like to go on the second round after.
[Translation]
Mr. McDougall, you spoke a little about what is being done in the Atlantic region. When you talk about the Atlantic region, are you including the province of Quebec, or only the four maritime provinces?
Mr. McDougall: It depends on the circumstances. Sometimes Quebec and the maritime provinces have a relationship with the New England representatives, whereas in other circumstances, there are only three, four or five provinces involved.
Senator Mockler: Since we are on the topic of greenhouse gas emissions, which of the three means of transport generates the fewest emissions: trucking, rail or pipelines? I will understand if you prefer not to answer, but in your experience, which of these networks generates the fewest greenhouse gas emissions throughout the Atlantic region?
Mr. McDougall: I don't have the figures in hand to reply to that question. I know this was done in the context of the Keystone XL pipeline in the United States. I have not seen any reports produced on this issue in Canada. It may be, as you mentioned, a matter that is before the National Energy Board.
Mr. Beal: I think that the direct emissions generated by pipelines are quite minimal.
[English]
The direct emissions from operating an oil pipeline in particular are pretty small.
Senator Mockler: If I give you, then, the three means — transportation by highway, by rail and by pipeline — what's the formula? Why do you say to me that pipeline is the lowest one? Under what formula do you base your decision?
Mr. Beale: It's just the engineering. The emissions from the actual transportation of the oil through the pipeline, because oil is a liquid, the emissions required to send it through the pipeline are relatively low. It's not like a gas pipeline where sometimes there's venting or fugitive emissions. There are few emissions from leakage, whereas, obviously, if we're talking about rail, how is the — if it's a diesel-operated train. If you're talking trucks, trucks would presumably have the highest emissions of those three forms.
Now, obviously there's a range of environmental impacts associated with transporting oil, and that's why, in an NEB process, they look at the range of environmental impacts as well as other impacts, such as safety, etcetera. All of those things go into the measurement.
The Chair: Just a little bit further to that, I know you have to compress gas to get it through the pipeline, but you also have to pump the oil. Just because it's liquid, it doesn't mean it runs. It's not all downhill. I would think that there are a fair amount of emissions from both oil and natural gas, in my experience, in my world.
I have a couple of questions I want to ask because I'm through the first round, and I thought maybe I'd just throw in a few questions here.
The Canadian clean tech market generated about $11.7 billion in revenues. I'm not here to dispute the number, but I would sure like to know what makes up $11.7 billion in clean tech. That's a lot of money in one year. Can you give me some sense of even what the major thing is that actually does that? If you want to, you can send us a list of what would encompass what the $11.7 billion is and by product, how much each one is.
Mr. McDougall: I'm looking through my notes because I think I have one study here that I brought with me, but it would probably be safer for us to send you some of that work rather than me trying to guess what it is.
The Chair: Sure. Are those numbers that you generate, or do they come out of Finance?
Mr. McDougall: Those are numbers that are generated by external parties that do these types of studies.
The Chair: All right. That's great, because sometimes some interesting things creep into some of those numbers.
Second, when I look at your graph on page 7, on the reference case, the average, we need to reduce 300 megatons by 2030. That's 15 years from now.
I have another chart that shows me in percentages but also in numbers what each — let's say transportation, electricity, oil and gas, waste and others — actually emits in greenhouse gases.
If you took oil and gas with the programs that are in place now and extrapolated it to 2030, it is 242 megatons. After that, they all get a lot smaller. To me, when you start looking at those numbers, it gets a bit scary about what you have to totally take out of the economy altogether to reach some of those targets.
I want you to understand that I'm not trying to convince you that there isn't climate change happening. Our big mandate is, what is this going to cost the average person in Canada? I don't think anybody is giving that number to people. It's not your responsibility; it's the government's responsibility. "These are our targets. This is what it's going to cost you.'' Nobody has ever said, "This is what it's going to cost you,'' because everybody is afraid to do that.
With electricity, for instance, they'll say, "Well, look at Denmark.'' They use a lot less electricity per capita than we do in Canada and that's because their electricity cost is four times as high. If your electricity is $100 per month, in Denmark it's $400. That would encourage you to turn the lights off and not to use a lot of electricity.
Denmark is small enough in land mass that it would almost fit inside one of our big cities. People are jammed in a lot closer. They don't have the huge transportation issues that we have across the country.
So even if you took out oil and gas totally, just eliminated it, I don't know how we'd operate, because oil and gas is very intertwined in our lives. As we sit around this table, it's huge. If you took out agriculture, you'd have made the 300 million tonnes. We can't do those kinds of things.
I need to be comfortable to understand a bit more, instead of just saying, "These are the amounts of tonnes.'' Somehow your minister or department responsible needs to actually start attaching some real costs. Senator Massicotte talked about that earlier.
We need to let the people of Canada know what this will actually cost them at the end of the day. It's fine to say there's high tech coming on. I appreciate it. It's great; it's good. Much of that high tech, I would bet, is attached. That $11 billion is attached to the oil and gas industry to start with, because they're one of the largest users of high tech that I know of in Canada.
Do you have some kind of sense about how you can do those kinds of things so that the public has a general idea of what's taking place? I think a lot of people think it's just going to be a big company, and it's going to pay for this. Well, you know what? Those big companies pass that on. That cost comes down the pipe to the end person on the street.
Would you see that as something you could actually manage to put into some of these charts or let us know what you think that's going to be?
Mr. McDougall: First off, I would agree with you. Hopefully by our publishing this information, part of our task is to make sure that people are aware of what the challenge is and the enormity of the challenge. As you say, this is not a small undertaking. This is a massive undertaking, and it is not without cost. It's not without benefit, either.
I guess the other thing I would respond is that if we could go back to the Vancouver Declaration and the work that will be undertaken over the next six months on this, the mandate that has been given by first ministers to the four working groups that are looking at this, and I'll quote from it: "Each working group will assess impacts on economic and environmental outcomes.''
The type of information that you're looking for — I agree with you — that you're saying needs to be out in the public domain, that's what the groups here are actually tasked to look at and come up with reports on, on both the environmental and the economic side of things.
The Chair: I appreciate that, but the economics always say clean tech generated $11.4 billion last year and we're laughing. That doesn't mean anything to the person on the street. It's a big number. I shouldn't say it doesn't mean anything. It does because people are working there. Don't get me wrong. It's a big number, it's lots of dollars, but it doesn't say, "Fred, Martha, you're going to pay this much more for electricity.''
We mix those two up talking about electricity. We're already 80 percent. We're the third-cleanest in the world, but we tend to go on, "If you just build more solar panel farms and more windmills we'll be okay,'' and that's not true. It is maybe for the electricity generation to a degree, but not completely. When it comes to oil and gas, it's intertwined in everything you see here, including your clothes.
That's what we want to do with this committee. That's the kind of message that I hope your ministry or department will work with us on to get that number so that we can give some idea to the people on the street of what it will cost them. It's a massive undertaking. It's unbelievable, because people don't know. I'm going over my own time here, so I'm going to be careful.
They're not even paving the roads anymore. The Minister of the Environment was over in Alberta talking about paving roads in Banff. Well, pavement is the bottom of the barrel of oil, the dredges of oil. Nobody has yet said that we're going to change that and hard-top our roads with something else — other than concrete — and creating cement uses a huge amount of energy. We know that. Some cement companies have already left Canada simply because of our greenhouse gas charges and those kinds of things. I'll leave that with you.
Senator Massicotte: Everybody talks about GDP growth, and we often rationalize this investment by saying, "Look at the effect on GDP.'' Let me highlight a couple of questions for you. If you dig a hole and it costs $100, fill it up again and it costs another $100, am I correct that you increase GDP by $200? The answer is yes, so you have to be careful with GDP growth.
You can do a lot of stuff and it looks good GDP-wise, but the relevant question is what the most productive investment is. If your high-tech solution is going to cost twice as much as your low-tech solution, sure, GDP goes up, but as far as the quality of life of Canadians, it goes down.
I guess I caution you, all of us, on that issue. We play with numbers and GDP growth, but it's often not the most productive.
The same thing with technology. I hope your plans or our plans for Canadians are not that technology will find a solution. We may find a solution, but it's like winning the lottery; you can't count on it. We have to develop real plans for how to affect consumers and so on.
Relative to further information I could share, I wouldn't mind if you did the projection and assume the government policy is in place. I'm a big believer in market forces. Given the change, it's 40 percent; it's big time. You have to permeate the whole economy to get there. That means you have to price carbon. I wouldn't mind seeing a simulation: At what price does carbon have to be to get you to a 40 percent reduction? I have to assume it's above $150 a tonne.
Could you please get back to us with what, all else being equal, you have to charge for carbon to get you that 40 percent reduction in emissions? Is that okay, chair?
The Chair: Yes.
Senator Mitchell: Often the argument is made that there's not much point in Canada doing very much until China does. I think that argument is diminishing, but just for argument's sake, can you give us an idea of what China is doing? I'm reading more and more that they are very serious about this because they don't just have an emissions problem; they can't breathe. What's happening in their economy? How far advanced are they? Are they quite happy to have us thinking they're not doing anything because then they don't have to compete with us when they're developing the technology that will reduce emissions?
Mr. McDougall: China has set itself a target of peaking emissions in 2020, as I recall. They have some very serious programs under way to do that. One of the things they're doing is putting in place some national carbon-pricing mechanisms. They have seven pilot projects that they're working on for various forms of a cap-and-trade system that they're doing. When they do pilot projects in China, it tends to be kind of on an enormous scale, much larger than an entire country in one of these projects, for example. It's almost hard to imagine.
They're also doing a lot on coal replacement in a complementary sort of way that will have some fairly big impacts on their economy. They have to make enormous structural changes to their economy in order to meet the targets that they've set for themselves as well. They're starting to do that now. They're not sitting back and doing nothing. They are actually taking some pretty serious measures and putting them in place.
Senator Mitchell: There seems to be this continuing discussion around infrastructure for fuel cell electrical cars, essentially. Toyota has actually made the decision to go fuel cell, which is quite remarkable. I don't get that. I don't see how it can be so expensive to create these electrical stations and hydrogen gas stations when the possibilities of selling millions of these cars would dwarf whatever investment is necessary.
Is it that it needs to be stimulated somehow by government? Would that be one way to incentivize it? Or are they not at the point that they're selling enough of these cars to make it worth their while to do it? Is that infrastructure really an impediment to the creation of electric or fuel cell cars?
Mr. McDougall: I would say not having the infrastructure is an impediment. The secondary question is whose responsibility is it to put in place the infrastructure? Is it a private sector or government process that needs to be in place?
Economics would say that in some cases there's a role for government in getting these emerging technologies and structural changes in place to start with, and then perhaps you'll see market forces take over. It seems to me that that's probably speculation and opinion more than anything else, but we're at that phase, I think.
I was at another presentation with some folks from Quebec recently who have done some analysis of what's going to happen. As you look to 2020 and what the Government of Quebec, for example, has put in place, or has committed to do, I think they end up, in that time frame, having more electric-vehicle charging stations in their public infrastructure than they do gas stations. That's not very far off, quite frankly.
You do have to get a critical mass. It's a bit of chicken and egg in some of this stuff, but as you start to get to that level of infrastructure for charging, the forces that drive people into cars actually start to take effect. If you couple that with the incentives being offered by a number of government programs, which are well over $10,000 per vehicle, that brings the price of vehicles down to comparable levels with gas vehicles, and you start to see changes happening in that. It's starting to happen.
Senator Mitchell: My hybrid might be obsolete any day now?
Mr. McDougall: It's possible.
The Chair: Thank you. Just further to that, putting in electrical charging stations is actually pretty reasonable. That's not a huge cost. What is a huge cost is putting in LNG facilities or hydrogen facilities. That's where the cost comes in. As far as putting in the electrical part of it goes, that's relatively easy.
In fact, we've done that in Port Metro Vancouver with ships, and we've done a lot across British Columbia with that. Those costs are well known.
Senator McCoy: Going back to the clean technology question, was it the Analytica report? I read it, except I didn't have access to the full report. Do you have the full report?
Mr. McDougall: Yes.
Senator McCoy: Analytica says they did it for their own members, and we could have the Canadian clean technology industry come and talk to us about this.
They say they've got 50,000 people employed directly in more than 800 firms, and their latest total number is almost $12 billion, which is what you're quoting. Maybe they would share this full report. Because Analytica did it for their industry association they put out their executive summary, but they don't share it with every Tom, Dick and Harry that comes along. I was amongst the Toms, Dicks and Harrys they didn't want to share it with. I would love to get a full copy. The committee chair might invite them to appear and bring their full report. That might be better.
The Chair: We'll see.
Mr. McDougall: We would have to make sure that we're not infringing copyright. If we're able to provide it to you, we certainly will.
Senator McCoy: That's another one on the follow-up list.
I have a question as well, if I may, that has to do with Article 4, paragraph 19 of the Paris Agreement, with this low carbon development strategy that has now been accelerated by Obama and Trudeau for 2016 here. Who has taken the lead on that in departmental terms?
Mr. McDougall: I believe it will be Environment and Climate Change.
Senator McCoy: You will be meeting that one. Then this question is very pertinent: Have you been working with the Deep Decarbonization Pathways Project that is being quarterbacked by an Alberta outfit, Carbon Management Canada and Richard Adamson? They participated with 16 other countries and gave their report in Paris last September. They have done the whole pathway and figured out the price of carbon. It's 42, by the way. Are you working with them? Are you adopting it? What is your opinion of that report?
Mr. McDougall: Are we working with them? The short answer is, sort of but not really. They are independent in their work, but we know them all. It's a fairly small community in the modelling world that works on this stuff. Yes, we are very much aware of it. We've looked at their report. It's one of those pathways.
Many different scenarios come into play on this. There is no one right answer, as you well know. There are many different ways to get from here to there. Part of the work that we'll be undertaking is to look at those different ways. Yes, they have identified one way. We will want to drill down probably further than they have and look at some of the implications beyond that.
The other thing is that we have committed to doing this jointly with the United States; but we haven't yet followed up with our colleagues there. We'll want to try to make sure that we're doing this on a comparable, compatible North American basis so that we have something that works for the two economies and how they are integrated at the end of the day.
Senator McCoy: This leads me to a bit of a follow-up. I don't want to be rude, I really don't, but I'm instantly thinking well, hold on, you're not going to be duplicating work, are you? They have already worked with 16 countries. They all work together, so as I understand it, they had a similar platform. We are not reinventing the wheel, are we, with you guys going off again?
Mr. McDougall: We have enough work to do that wherever we can find efficiencies, we certainly seek to have them. We have no interest in reinventing the wheel, but how the wheel rolls and its shape and dimensions, 17-inch or 16-inch, we'll probably be looking at, yes.
Senator McCoy: You're not offended that I asked?
Mr. McDougall: Not at all.
Senator Mockler: I want to come back to rails, highways and pipelines. This is in follow-up to a question by the chair and the deputy chair. Can you provide us with a chart that would demonstrate the footprints of the rails, highways and pipelines?
Mr. Beale: Are you asking in general for total emissions from pipelines, rail and roads? Yes, for sure we could do that.
Senator Mockler: When can we expect that graph?
Senator Massicotte: May I clarify? You're going to give us a study showing the total emissions for all rail, all pipelines and all roads. I think he wants the emissions for one pipeline for 500 miles versus rail for 500 miles. Is that not what you want?
Senator Mockler: Emissions for petroleum transportation per mile.
Mr. Beale: That was why I asked for clarification. No, if it's specific with respect to transporting petroleum, I have not seen that kind of number anywhere. I'm not sure that people have looked to make that comparison specifically with respect to greenhouse gases.
Senator Mockler: Okay, so I agree on that. What you said you could provide we can still have. Is that right?
Mr. Beale: Yes.
Senator Patterson: Part of your presentation, sir, was about the recent provincial and territorial announcements to lower emissions in 2030. You noted that carbon pricing has been implemented in more than 80 percent of Canada's 2013 emissions. I come from Nunavut, which sadly is totally dependent on diesel for electrical power generation and heat with very little alternate energy in place. Of course, we would like to change that.
You also discussed carbon tax in your presentation and in response to questions. I was just at the budget presentation where Finance Minister Morneau mentioned carbon tax. The concept of a carbon tax scares some people in Nunavut because a tax is designed to encourage people to avoid fossil fuel and use alternate energy. We have no immediate prospects for alternate energy.
When the first ministers met in Vancouver, I understand there was a kind of carve-out for the territories. They talked in their release about other adaptations to climate change. I wonder if you would make some comments about how a jurisdiction like Nunavut, where the wind doesn't always blow and the sun doesn't always shine, participates in the opportunities you have described for the new green economy. Where do we fit in, in particular if a carbon tax would raise the cost of everything, which most people fear?
Mr. McDougall: As you note, senator, in the Vancouver Declaration on clean growth and climate change there is recognition of the special circumstances of the North and remote communities. That will factor into the work on carbon pricing. The working group set up to do that will have to look at the particulars and how to address them.
We talked earlier as well about the work that the provinces launched last year, and that we are now getting involved with, on how to get remote and off-grid communities off diesel and whether there are opportunities for doing that. That's another piece of work that is of particular relevance to Nunavut and other remote northern communities.
The territorial governments and their representatives will be very much working, I believe, on all of these pieces as they go forward, including the piece on innovation and jobs. I'm sure that as they participate in these working groups — and it's something that we as the federal government are also looking at, to ask how everybody in the country can benefit from that — I think that will be part of the analytical frame they will be looking at. It's not just the big players that get to get all the advantages. The world is changing in a lot of ways that allow for innovative participation by all parts of our country.
Senator Patterson: It may be early days, but how do you envision remote communities getting off diesel? There are 25 in Nunavut, some as small as 150 people. What opportunities can we look forward to?
Mr. McDougall: I wish I could answer that. That's the work that will be undertaken. We will have technical expertise that is provided to these groups, so people who do have those answers and who know not only the technologies available now but also those that might be coming on-stream perhaps a little bit further down the road that we can use. These groups are also being commissioned to undertake any additional analytical work they need to do to answer those types of questions.
We may not have all the answers now, but at least people are going to be looking and asking the right questions as to what can be done now and when can things change. It might be an unsatisfactory answer, but that's all I have at the moment.
The Chair: Just a couple of quick questions. On page 2, you say that in the Arctic the average temperature has increased 2.2 degrees Celsius. That's the whole Arctic, right? You have a picture here. You got those increases in temperature from other countries that are surrounding —
Mr. McDougall: A lot of the temperature increase is driven by that, yes, and the global patterns of air currents and transportation. Some of it is actually not just from a greenhouse gas perspective, but there's some other work we have been doing through the Arctic Council that is particularly focused on black carbon, as well. It's not a greenhouse gas, but it is a pollutant that has effects both on climate from an atmospheric sense and also deposition on the snow; it affects the reflectivity of the snow and what gets transmitted back to the atmosphere. It can have a double warming effect in that.
Under the Arctic Council, a task group was set up under Canada's chairmanship over the last couple of years. They have come up with an Arctic Council-wide plan, hopefully including all the observer countries as well, to take specific measures to reduce black carbon and its effects in the atmosphere.
Again, because some of the observer countries to the Arctic Council are countries like China and other big Asian polluters, and the deposition to the north of that, that's actually how you can get at some fairly significant global reductions through a fairly small, tightly functioning antidote. It's not like UNFCCC, where you have to try to get 195 countries. You have 20 countries that can actually do good work on that front.
The Chair: Can you tell me what the temperature has increased to in the South Pole?
Mr. McDougall: I don't have that off the top of my head. A good study came out from the World Meteorological Organization, the WMO, in December. It has a fantastic graph at the front of it that shows the parabolic increase in temperature as you plot temperature increase by latitude. It's something we can certainly provide to the clerk so that your committee can see that.
The Chair: Sure. That would be very good. I appreciate it. I think we have had our questions answered.
Senator McCoy: I have two quick ones. I thought we had until seven o'clock.
You said there were other pathways — low-carbon development pathways, you called them. What are the pathways you —
Mr. McDougall: Sorry, I wasn't thinking of other studies that are done. There are different ways that one could look at decarbonizing the economy in order to get to either a completely or low-carbon economy.
Senator McCoy: Another question, if I may: Are you using the Canadian Energy System Simulator? I have used it on my energy website, which is called Your Energy Story for Canada, and Trottier has projects using it, as well.
Mr. McDougall: You probably know that, Derek.
Derek Hermanutz, Director General, Economic Analysis Directorate, Strategic Policy Branch, Environment and Climate Change Canada: No, that's not the model we use for analysis. We have had some discussions with Trottier, but that was several years ago.
Senator McCoy: I'll follow up. Everyone is getting hungry, and we need to go home. Could I follow up with you on that? All right, I shall take advantage of your good nature and do that. Thank you.
The Chair: Thank you, Senator McCoy.
Thank you very much, gentlemen, for bearing with us here. Probably before we're done, we're going to ask you to come back and maybe answer a few more questions, or you'll have more information for us. I'm sure you will. But it was a very good presentation, and you gave some good answers, so we appreciate it very much. Thank you.
Mr. McDougall: I have a list of follow-up items that I will endeavour to get back to the clerk as quickly as I can.
Senator Massicotte: Small issues.
The Chair: We appreciate that.
(The committee adjourned.)