Publications

Today, Canada’s Net-Zero Advisory Body (NZAB) released its Compete and Succeed in a Net-Zero Future report to the Minister of Environment and Climate Change.

The report provides concrete solutions the Government of Canada should implement through the mobilization of all parts of society to ensure Canada benefits from a global net-zero economy, accelerates the attainment of a net-zero emissions economy, and generates clean prosperity for generations to come.

Specifically, the report includes 25 recommendations across the NZAB’s three lines of inquiry identified for 2022-23:

1. Net-Zero Governance: Building on advice for the 2030 Emissions Reduction Plan, the NZAB focused on the capacity, structures and accountabilities that will be required to achieve the whole-of-society transformation to net-zero emissions, notably with respect to modelling Canada’s pathway to net-zero.
2. Net-Zero Industrial Policy: Under this line of inquiry, the NZAB examined the institutional structures required to develop and implement a net-zero industrial policy that will ensure that Canada grasps the benefits of the net-zero transition and competes in a global net-zero economy.
3. Net-Zero Energy Systems: Decarbonizing energy systems is critical to achieving net-zero. The NZAB began investigating ways to transform energy production and adapt energy use and demand. Recognizing the complexity of the energy transition, the NZAB’s work for 2022 focused on electrification and foundational advice for the future composition of energy systems in 2050.

The recommendations in this report are grounded in the ten foundational values and design principles for pathways to net-zero, as set out in NZAB’s first publication, Net-Zero Pathways: Initial Observations. This annual report also builds on the 40 pieces of advice provided in the Submission for Canada’s 2030 Emissions Reduction Plan.

Originally launched in February 2021 and formalized under the Canadian Net-Zero Emissions Accountability Act in June 2021, the NZAB’s legislated mandate is to provide independent advice to the Minister of Environment and Climate Change with respect to achieving net-zero emissions by 2050.

The legislation requires the Minister of Environment and Climate Change to respond to the NZAB’s annual report within 120 days. The NZAB will continue to deepen its advice in 2023.

By the Canadian Climate Institute and Net-Zero Advisory Body

If Canada wants to achieve its 2030 target for greenhouse gas emissions, the federal government must follow through on its proposed cap on oil and gas emissions. But the details matter, and getting the design right is critical.

Emissions in the oil and gas sector are out of sync with a net zero pathway. Unlike most other heavy industry sectors like steel and cement, its emissions are still rising – a trend that we can no longer afford if we want to avoid the worst impacts of climate change. Between 2005 and 2019, emissions from oil and gas rose by almost 20 per cent. Without a cap and mandated reductions in place, current policies are not stringent enough to drive the emissions reductions necessary for Canada to meet its climate goals, and contribute our share of the solution to the global problem of a heating planet.

At the same time, investment planning in this sector in today’s global context is particularly tricky. In the short-term, Europe faces an energy shortage while they step up efforts to reduce reliance on fossil fuels, conserve energy, and build more renewable power projects . But in the medium and long -term, declining global demand for oil and gas risks increasing the total costs of Canada’s net zero transition. Investments in carbon-intensive projects risk “locking-in” emissions, and every dollar spent on infrastructure that is incompatible with pathways to net-zero will cost taxpayers more in the long run. As the Net-Zero Advisory Body explains, “dead-end” solutions, like new high-carbon oil and gas projects that will continue to operate for decades, will make it more expensive for Canada to achieve its emissions target or put it out of reach altogether. More emissions in oil and gas will force other sectors to contribute more reductions. The oil and gas sector also has the power to leverage its own expertise, resources, and workforce to implement decarbonization solutions and diversify its operations. We all know that inaction costs more than action and that they have the wealth to contribute to the societal imperative to reach net-zero.

A cap gets to the heart of these unique challenges. It provides greater certainty about an emissions pathway for the oil and gas sector, creating clear expectations for the sector and a credible mechanism to make sure that new investments and new projects in the sector are compatible with net zero pathways.

Nevertheless, how the cap is designed matters.

First, the cap should deliver real, absolute emissions reductions in the sector, not simply improvements in the emissions intensity of fossil fuel products. This means compliance flexibility mechanisms, like offsets, that reduce the certainty of achieving permanent emissions reductions should be very limited and available only in the short term. As the NZAB outlines, a net-zero pathway for the oil and gas sector should be consistent with an economy-wide pathway to net-zero, and cannot depend on reducing emissions from other sectors.

Second, a cap should not distract from the imperative to reduce methane emissions. Methane emissions are severely undercounted and methane itself has a heat-trapping potential more than 80 times greater over a 20-year span than carbon dioxide. Increasing the stringency of methane regulations would drive emissions reductions more quickly in the oil and gas sector than a cap on CO2 alone. Slashing methane also represent some of the lowest cost emissions reductions available. Increasing the stringency of methane regulations would also relieve pressure on the cap; bringing the carbon price in the sector in closer alignment with the rest of the economy which lowers the cost to achieve Canada’s climate goals. With the recently passed Inflation Reduction Act in the United States our southern neighbour is reducing emissions in key sectors, including methane emissions, to ensure they will be competitive in a net zero world.

Third, policy design should seek to minimize costs for firms, protecting competitiveness and avoiding “leakage” of emissions to jurisdictions with weaker climate policies. The government has already indicated it will use market-based instruments that will minimize the costs of achieving the sector’s emissions pathway. Moreover, the Canadian Climate Institute’s response to the government’s discussion paper on the cap provides additional options such as avoiding layering multiple policies and compliance mechanisms.

A net-zero pathway for Canada’s oil and gas sector is key for Canada’s climate goals. A cap on the sector’s emissions can deliver that pathway. If designed well, a cap can also support transformation in the sector that will position it well not only to contribute to our emissions reductions here at home, but to compete in a net-zero world.

There’s no time to waste.

Our work is to be structured along specific "Lines of Inquiry", which are to be set at regular intervals and communicated publicly.

These lines of inquiry may include specific sectors or thematic opportunities.

We identified three LOIs for 2022-23 that we believe are critical to helping Canada achieve net-zero emissions by 2050:

1. Net-Zero Governance: Building on our advice for the 2030 Emissions Reduction Plan, the NZAB will continue to focus on the capacity, structures and accountabilities that will be required to achieve the whole-of-society transformation to net-zero emissions.
2. Net-Zero Energy Systems: Decarbonizing energy systems is critical to achieving net-zero. The NZAB will investigate ways to transform energy production and adapt energy use and demand. Recognizing the complexity of the energy transition, the NZAB's work in 2022 focused on foundational advice for the future composition of energy systems in 2050.
3. Industrial Policy: Under this line of inquiry, we will examine the institutional structures required to develop and implement a net-zero industrial policy, as well as the resources, capital, and labour needs of a net-zero economy, including the role of innovation and experimentation. In 2022, we expected this work to focus on defining the purpose, vision, and priority sectors of a Canadian net-zero industrial policy.

We provided advice on these areas through an annual report in early 2023, and throughout the process where possible.

This document provides an overview of what the Net-Zero Advisory Body heard from its engagement activities since the release of its inaugural report Net-Zero Pathways: Initial Observations in July 2021 through to the start of 2022.

The purpose of this document is to report the results of our engagement. From roundtable discussions, to written submissions and web comments, public engagement enriched our work. We reviewed, discussed, and considered what we heard to develop and finalize our advice.

With a mandate from Parliament to undertake engagement activities with Canadians, the NZAB will be holding additional, and longer, engagement opportunities for years to come.

Canada’s Net-Zero Advisory Body (NZAB) is proud to present our submission to the Government of Canada’s 2030 Emissions Reduction Plan (ERP).

This advice is intended to inform decision-making to reduce Canada’s national greenhouse gas (GHG) emissions by 40 to 45 percent below 2005 levels by 2030.

The NZAB is committed to supporting the most likely pathways for Canada to achieve net-zero emissions by 2050, with 2030 being a critical step on this journey.

This submission builds on the NZAB’s five foundational values and five design principles from our Net-Zero Pathways: Initial Observations report. The core of this submission is our independent advice on our four lines of inquiry:

• Governance;
• Buildings;
• Transportation; and,
• Oil and gas.

With less than ten years to reduce Canada’s emissions by 2030, and fewer than thirty years to achieve net-zero emissions by 2050, there is much to do and no time to waste.

Canada’s Net-Zero Advisory Body is proud to release our first publication, Net-Zero Pathways: Initial Observations.

We have identified 10 values and principles that we believe should guide the development of transition pathways that are the most likely to lead Canada to achieve net-zero by 2050.

By following these 10 values and principles, Canada can define pathways to net-zero that are not only achievable, but that can lead to a prosperous, fairer, healthier, and more prosperous future for all Canadians.

To realize these benefits, we must act urgently and decisively, and collaborate across governments, sectors, regions, and communities. Immediate action must be taken to meet Canada’s net-zero target.

This publication guides our work to engage and to develop advice on teh building blocks to achieve net-zero.

Our work is to be structured along specific "Lines of Inquiry", which are to be set at regular intervals and communicated publicly.

These lines of inquiry may include specific sectors or thematic opportunities.

The Net-Zero Advisory Body, NZAB, set four initial lines of inquiry for its first year.

Why these topics?

• Highest emitting sectors
• Institutional capacity, strategy and relationships—inside and outside of government—is essential for net-zero success
• Based on consultations with the federal Minister of Environment and Climate Change
• Consistent with Terms of Reference

It was our intent to provide advice on these areas through an annual report in 2022, and earlier where possible.

Proposed purpose

• Build awareness, dialogue and capacity on net-zero.
• Hear and learn from diverse perspectives from across Canada.
• Support the implementation of the 10 values and principles outlined in our report Net-Zero Pathways: Initials Observations.
• Explore considerations for the NZAB’s Lines of Inquiry.
• Provide advice informed by engagement to the Minister of the Environment and Climate Change on pathways to net-zero.

Proposed groups to engage with

• Decision-makers, including governments and Indigenous Rights Holders.
• Canadians, in all their diversity, who may or may not yet be thinking about net-zero.
• Canadians who live and work in areas that are expected to be most affected by the transition to net-zero.
• Individuals and organizations already engaged in developing and implementing pathways to net-zero.
• Other advisory bodies with relevant mandates.

Proposed methods

• Connecting virtually with Canadians through social media and our website.
• Supporting initiatives and projects across Canada that contribute to building general awareness and dialogue on net-zero.
• Hosting and participating in workshops, conferences, roundtables or special events with individuals and groups that are working towards solutions in the areas covered by our Lines of Inquiry.

Considerations for proposed priorities

• These proposed priorities represent our initial thinking and approach to engagement; they are not exhaustive, as we expect to engage with others through additional ways as well.
• They were designed to respect several realities driven by the COVID-19 pandemic.
• The intent is to enable NZAB to host engagement opportunities ourselves, but also to participate in and/or benefit from activities led by others, to ensure we reach people where they are already active.

Proposed purpose

• Learn from existing and emerging research and analysis from diverse and reputable sources.
• Motivate new research and analysis on net-zero.
• Support current and future Lines of Inquiry by the NZAB.
• Support the implementation of the 10 values and principles outlined in our report Net-Zero Pathways: Initials Observations.
• Provide advice informed by research and analysis to the Minister of the Environment and Climate Change on pathways to net-zero.

Proposed priority streams

• Catalytic / Motivating – bring together experts, stakeholders, Indigenous peoples, and partners to stimulate the agenda for the Canadian research community and to motivate national conversations on net-zero pathways;
• Targeted – use dedicated NZAB funding and partnerships to address specific net-zero research questions to inform the NZAB’s advice to the Minister of Environment and Climate Change; and
• Synthesis / Validation – bring together existing research, verify analyses from other organizations, and model NZAB proposals as required, to ensure NZAB advice is based on transparent and high-quality data.

Proposed priority methods

• Public communication of priorities to catalyze new work.
• Open calls for submissions of existing net-zero research and analysis.
• Hosting/participating in thematic roundtables, conferences, and events.
• Funding new research and analysis on specific topics/cross-cutting themes within lines of inquiry.
• Building partnerships to support synthesis, validation and/or modelling needs.
• Briefings with Canadian and international researchers, experts, stakeholders, Indigenous peoples, and NGOs.
• Data, modelling, and analysis from federal officials.

Considerations for proposed priorities

• Confirm our commitment to using credible, transparent, and high-quality data and analysis.
• Recognize existing research and analysis, as well as existing networks of climate expertise on net-zero.
• Enable NZAB to pursue targeted projects ourselves, but also to participate in and/or learn from activities led by others.