Unpacking Canada’s oil and gas dilemma: international leadership challenges on the road to net-zero

Abstract

ABSTRACT Despite significant policy and regulation efforts by Canada’s federal government since its signature of the Paris Agreement, the specific question of whether Canada can retain its role as an energy production powerhouse while gaining some political capital as an international leader with regard to climate change has continued to plague its GHG reduction ambitions. In this article, I argue that despite an exceptional clean energy resource endowment, options to demonstrate the country’s serious intentions to meet its international climate commitments while keeping a sizeable oil and natural gas production sector come with complex implications well beyond the simplistic economic challenge linked to replacing the sector’s exports and employment levels. I explore three such options to keep oil and gas production high by using techno-economic modeling: compensating with more reductions elsewhere, using CCS in the oil and gas sector to avoid the sector’s emissions, and using negative emission technologies to compensate them. Compared with reducing emissions through large cuts in oil and gas production levels, each of these options comes with both significantly higher costs for society and a much higher risk of not delivering the expected emissions reductions.