Summary
Canada submitted its updated NDC in July 2021. Canada had previously announced its updated domestic reduction target during the US Leaders Summit on Climate in April. The target level has not changed since the April announcement, although Canada now refers to the target as a reduction of ‘at least’ 40-45% below 2005 levels, suggesting that it could go beyond this level. While the ‘at least’ 40-45% is an improvement, Canada would need to reduce its own emissions by at least 54% below 2005 levels by 2030 for its national emissions to be 1.5°C compatible. Canada does not have sufficient policies in place to meet its updated domestic target and will need to adopt further measures.
Domestic action alone is only part of a fair share contribution to the Paris Agreement, so Canada will need to go well beyond its domestic emission reduction targets in order to provide support to developing countries in their own transitions to net zero emissions, through providing climate finance and/or by other means of support.
If the total sum of Paris compatible domestic action plus the required provision of climate finance/ support to developing countries were expressed as an emissions reduction for 2030 the target would be greater than a 60% reduction by 2030. At this stage, it is clear that Canada is not providing sufficient climate finance and/or support to developing countries. This needs to be substantially improved for Canada to make its full fair share contribution to implementing the Paris Agreement globally.
The CAT is in the process of updating its rating system. We will issue a new rating of Canada’s targets, policy action and climate finance/ support later this year. In this analysis, we have assessed the updated NDC against the level of climate action that Canada needs to undertake domestically and we have also signalled that its climate finance contribution is substantially below that which will be needed for a “fair share” contribution to the Paris Agreement globally. Details of this will be forthcoming in the CAT’s updated comprehensive rating system.
CAT analysis of NDC
In July 2021, Canada submitted its updated NDC. It has strengthened its domestic1 emissions reduction target from a 30% reduction below 2005 levels by 2030 to at least 40-45%. The inclusion of the reference to ‘at least’ suggests that Canada may have the ultimate intent of exceeding this target, which, as shown above, it would need to do in order to be Paris Agreement 1.5˚C compatible.
The submission includes details on the mitigation measures Canada will implement. Most of these measures were previously announced as part of its revised climate plan, released in December 2020, or in the 2021 Federal Budget. The June 2020 announcement by the Minister of Transport - that Canada is bringing forward its date for 100% zero-emission car and passenger truck sales from 2040 to 2035 – has also been included in the NDC submission.
According to the government’s own modelling, the mitigation measures outlined in the NDC are not sufficient to ensure that Canada meets its new target, so further policy development and implementation is needed. The CAT has not developed Paris compatible EV benchmarks for Canada; however, our US benchmark suggests that Canada’s new 2035 phase out date for internal combustion engine vehicles, while a step in the right direction, is not yet sufficient to be Paris compatible; a 2030 deadline would be.
Canada’s new NDC target, while much improved, is still not 1.5°C compatible. To be compatible, such a target would need to reduce emissions to at least 341 MtCO2e or lower (excluding LULUCF) by 2030, representing a 54% reduction below 2005 levels. The full range of 1.5˚C-consistent domestic pathways for Canada is 54-66% below 2005 levels by 2030. We calculate that Canada’s 40-45% reduction target equates to 2030 emissions of 427-467 MtCO2e, once the contribution from its land sector has been excluded.
For wealthy developed countries, achieving a 1.5°C compatible domestic emissions reduction is only one part of their fair share of contributing to global efforts to meet the Paris Agreement goals. The assessment above relates to Canada’s domestic emission targets. To get a view of its overall contribution to global efforts one also needs to estimate its contribution to climate finance in different dimensions. This includes the country’s contribution to international climate finance for mitigation, as well as actions taken to stop investment in fossil fuel developments abroad.
Canada will need to go well beyond a 1.5°C compatible domestic emission target of at least 54% below 2005 levels by 2030 in order to provide fair share support for developing countries in their own transitions to net zero emissions. If the total sum of Paris Agreement compatible domestic action plus the required provision of climate finance or support to developing countries were expressed as a domestic emissions reduction by 2030, then this would need to be at least 60%.
Note there is a wide range of viewpoints on equity and fair share approaches and the Climate Action Tracker does not choose a specific equity/fair share methodology. The literature that serves as a direct input to the CAT approach covers a range of 30% to 86% below 2005 emissions by 2030.
To make up for this gap, Canada will have to significantly support developing countries in making this transition. In June 2021, Canada announced a doubling of its climate finance commitment to CDN 5.3bn over the next five years. While this is a positive development, this is unlikely to be sufficient, given its contributions to date have been low compared to its fair share. Canada also continues to support fossil fuel developments abroad.
We will assess Canada’s fair share contribution and climate finance when we roll out the new rating system later this year.
In June 2021, Canada passed the Canadian Net-Zero Emissions Accountability Act, which enshrines its 2050 net-zero GHG emissions into law. The net zero target is included in Canada’s update NDC submission.
Prime Minister Trudeau has a minority government and there is a distinct possibility that there will be a federal election in the latter part of the year. Passing the Net Zero Act and formally submitting the NDC target to the UNFCCC reduces the risk of Canada backsliding on its commitments in the event of a change in government.
1 | Domestic emissions refer to emissions occurring within Canada's own borders according to UNFCCC and Paris Agreement reporting guidelines and requirements.
Assumptions
1.5˚C consistent modelled pathways
The CAT has derived “1.5˚C consistent modelled pathways” for each country it assesses, by downscaling global and regional 1.5°C compatible scenarios from the IPCC special report on 1.5°C, filtered to account for sustainability constraints on bioenergy use rates and magnitude of carbon dioxide removal. These scenarios distribute emission reductions across countries and sectors in a cost-effective way to limit global temperature rise to below 1.5°C by the end of the century.
Historical emissions
Our NDC estimates are based on the historical data contained in Canada’s 2021 GHG inventory report (our April 2021 assessment used 2020 GHG inventory data).
Our 1.5°C consistent modelled pathways are based on historical data from the 2020 GHG inventory.
Current policy projections
Current policy emissions projections shown in the graph are based on the ‘Reference Case’, which is updated annually by the Government of Canada, harmonised to the last historical inventory year (2019). The projections include policy measures in place as of September 2020 and consider the impact of the pandemic.
Land use, land use change and forestry (LULUCF)
Our estimate for the contribution of Canada’s land sector to achieving its target is based on the estimate in Canada’s current policy projection (-17MtCO2e), plus additional measures it anticipates implementing as part of its revised climate plan (-4-7 MtCO2e), for a total of (-21 to -24 MtCO2e). This figure is slightly lower than our April 2021 estimate (-27 MtCO2e). At that time, we had taken a figure of -10 MtCO2e for the additional measures as this was the figure given for both nature-based solutions and agriculture measures as we had no way to estimate the extent of nature-based solutions alone. A closer reading of the revised plan revealed that the government had estimate the effect of additional nature-based measures to be -4 to -7 MtCO2e annually in 2030, thus we have updated our estimate accordingly.
Global Warming Potential
Canada’s national GHG inventory currently used Global Warming Potential Values (GWP) from the IPCC’s Fourth Assessment Report (AR4). The target will be assessed using the 2032 national inventory which will use values from the Fifth Assessment Report (AR5). We have not attempted to quantify the effect of switching to AR5 values. All figures presented here are in AR4 values.
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