Ottawa must end all fossil fuel funding, ‘reduced’ or not

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By Karen Hamilton and Shawn Katz

The federal environment commissioner recently found that Canada’s climate change record was the worst among G7 countries since the signing of the Paris Agreement in 2015.

This has been attributed, in part, to government “policy inconsistency,” as seen with investments like the Trans Mountain pipeline expansion.

These investments are part of a long-standing pattern of massive federal government support for oil and gas companies, primarily through the federal agency Export Development Canada (EDC).

At last count, this support, which Ottawa does not consider a subsidy, averaged $13.6 billion per year from 2018 to 2020. This made Canada the largest provider of public funding for fossil fuels. of the G20. Only Japan, South Korea and China came close to rivaling Canada’s support.

The government recently acknowledged the problem and pledged to “develop a plan” to phase out public funding of the fossil fuel sector.

At the United Nations climate conference (COP26) in November, Canada joined more than 30 countries in pledging to eliminate some of this funding – ‘direct’ support for fossil fuels” relentlessly” abroad – by the end of this year.

Uncertainties remain, however, as to how Ottawa will ultimately define key terms such as attenuated, which is often used to describe projects with carbon capture. It also remains to define the “limited” circumstances in which exceptions can be made.

What is certain is that the pledge will only cover a fraction of Canada’s fossil fuel funding: about $1 billion, according to a preliminary government estimate. The commitment leaves intact the massive sums the government provides to industry in Canada, which in recent years has included billions of dollars in loans for projects such as the Trans Mountain and Coastal GasLink pipelines.

The Minister of Natural Resources said in November that a timeline for the elimination of domestic fossil fuel financing in Canada would be announced “in the coming months.” He is working with the finance and environment ministers to work out the details of Ottawa’s phase-out plan.

This schedule should at least reflect the same urgency as the COP26 commitment. The International Energy Agency has warned that there cannot be new oil and gas fields developed if the world is to keep global warming to the critical threshold of 1.5°C.

According to a recent study in the journal NatureCanada must leave approximately 83% of its fossil fuel reserves untapped if the world is to have even a 50% chance of achieving this goal.

Despite this, Export Development Canada has no intention of ending its support for fossil fuels. It has pledged to moderately reduce its support for oil and gas exploration and production but remains free to maintain or even increase its support for pipelines or refineries.

The impact of Ottawa’s commitments, on both the overseas and domestic components of its fossil fuel funding, will therefore depend on the speed and robustness of implementation, and in particular on the presence of gaps. in the government’s plan that could allow EDC to continue supporting fossil fuel companies.

Acknowledging a ‘climate emergency’, as Parliament has done, means there can be no quotas to support new refineries or new pipelines, whether for oil Where gas.

And that means there can be no escape from supporting oil and gas companies that simply promise to capture their emissions on-site. In a recent letter to the Minister of Finance, hundreds of Canadian climate experts warn that carbon capture is “neither economically viable nor proven on a large scale” and is being used to boost oil production, resulting in a to augment in global emissions when that oil is burned.

Carbon capture does nothing to address these downstream emissions which make up 80% of oil and gas emissions. Far from being a climate solution, they warn, the technology “prolongs our dependence on [fossil fuels] at a time when preventing catastrophic climate change requires relax use of fossil fuels”.

It’s time to end Canada’s half measures on climate. Ottawa must initiate a rapid and complete elimination of all public financial support for fossil fuel development of any kind, in Canada or abroad.

Continued

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