This article originally appeared in the Vancouver Sun.
By Jerome Gessaroli, July 20, 2023
As Canada’s efforts to combat climate change continue, it is evident that despite significant spending, a national carbon tax, and various mandates and legislation, the nation is still at risk of falling far short of its 2030 emissions target.
With over $113 billion already spent or committed to climate-related initiatives since 2015, the federal government must reassess its approach. By redirecting its focus toward collaborative international efforts, Canada can achieve more cost-effective greenhouse gas (GHG) abatement outcomes while providing socio-economic benefits to all parties involved.
The potential for international collaboration is an often overlooked strategy for meeting our formal climate goals. Canada and other countries all possess unique comparative advantages, be it cutting-edge technologies, lower costs, or high-impact mitigation opportunities. By harnessing these advantages through cooperative arrangements, Canada can significantly contribute to global emissions reduction while also receiving credit for its efforts. Such collaborative initiatives have the potential to yield superior outcomes when compared to a sole emphasis on domestic policies.
Article 6 of the 2015 Paris Agreement sets out a framework for such cooperative agreements, allowing countries to voluntarily collaborate in reducing GHG emissions and receive credit for reducing emissions beyond their borders. By recognizing and encouraging market-based incentives, governments can unlock the potential for more cost-effective emission abatement initiatives.
Consider the example of methane abatement projects. In a paper published by the Macdonald-Laurier Institute, using data from the International Energy Agency, I estimated that the total cost of completing a series of methane abatement projects in Canada amounts to $212 million US. These projects would reduce Canadian CO2 emissions by 30,000 kilotonnes. However, investing the same amount in methane mitigation projects across Africa, Asia, and Canada results in a global emissions reduction of 55,000 kilotonnes of CO2 — almost double the amount achieved through solely domestic efforts. The idea here is not advocating for methane projects, but showing how widening our perspective can lead to much better outcomes.
Under Article 6, Canada can collaborate with foreign countries to share costs or exchange technical capabilities for carbon credits. By embracing such arrangements, Canada can simultaneously contribute to global emissions reductions while receiving credit towards its formal climate targets. This approach offers greater efficiency in reducing emissions worldwide without additional financial burden on Canadian taxpayers.
Some in the climate movement are skeptical of countries using the above approach as a way of meeting their national GHG reduction targets. These criticisms are either based on poor outcomes from past projects or are driven by ideological beliefs.
There have been instances of participating nations double-counting carbon credits, due to a lack of transparency and accountability. Some projects had unintended negative consequences on local communities, others would have proceeded without international involvement and, therefore, did not create any incremental reductions in GHG.
While these concerns are valid, Article 6 is much stronger than the Kyoto Protocol, upon which earlier projects were based. There are now stricter monitoring and verification mechanisms required to prevent double-counting and ensure integrity in the process. Ideology-based criticisms, on the other hand, are grounded in anti-capitalist arguments that actually obstruct efforts to lower GHGs internationally.
Besides reducing global emissions, collaborative climate initiatives with developing nations often create additional benefits, enabling the transfer of technology, expertise, and advanced processes, which in turn fosters economic development in partner countries. The relationships also lead to international partnerships in other fields. These collaborations help local communities experience benefits such as job creation, worker training, improved water quality, and enhanced economic productivity, all the while reducing emissions.
Despite the significant potential and benefits offered by Article 6 of the Paris Agreement, the federal government appears to lack enthusiasm for using this avenue to help meet Canada’s greenhouse gas emission goals. It is imperative that Canada reevaluates its approach and places greater emphasis on cooperative emission reduction projects with other nations. By sharing our abatement technologies and working alongside other countries, Canada can foster global emissions reductions while advancing its own climate objectives.
Jerome Gessaroli is a senior fellow at the Macdonald-Laurier Institute and leads The Sound Economic Policy Project at the B.C. Institute of Technology.