Canada Needs a Carbon Budget Approach

By: Michael Bernstein, Executive Director, Clean Prosperity

Michael Bernstein, Executive Director of Clean Prosperity, discusses the significance of using a Carbon Budget approach for measuring climate progress.

A large part of the focus in climate policy debates in Canada centres around whether we will meet our emissions target for 2030, currently set at 40-45% below 2005 levels. But here’s something that doesn’t get discussed nearly as much – even if we hit our 2030 target, Canada will be just a few years away from exceeding its full share of global greenhouse emissions that can be put in the atmosphere before crossing the 1.5C threshold, a target that the global community hopes to avoid.

This little-discussed fact highlights why point-in-time targets – whether for 2030, 2050 or any other year – are useful but also insufficient on their own to measure climate progress. Instead, we should be measuring what really matters to the planet – the cumulative amount of greenhouse gases each country pours into the atmosphere, net of any carbon removals. That cumulative amount is often referred to as “the carbon budget”.

What is a carbon budget?

The carbon budget measures how much carbon dioxide can still be put in the atmosphere before the world exceeds its climate target of containing warming to no more than 1.5C above preindustrial levels.

A carbon budget is a strong predictor of the total global heating that we can expect, and thus the actions we need to take to avoid the worst impacts of climate change. However, currently, we aren’t nearly focused enough on measuring the outcome we want.

Using a carbon budget better aligns incentives for policymakers in several ways.

First, it motivates countries like Canada to focus on policies that are more aligned with the systems change we need, and avoids the trap of making incremental changes that may help with a short-term target like 2030, but are not compatible with the long-term energy system we need. For example, in a recent analysis by Clean Prosperity, it is found that the energy economy model that was being used for 2030 wanted to convert the Canadian heavy-duty trucking fleet from diesel to compressed liquified natural gas (LNG) in order to reach our 2030 emissions target. But with a cumulative emissions focus, a better policy might be to wait a few years until zero-emission trucks – such as electric or hydrogen – come down the cost curve and can be more widely deployed.

Second, a cumulative emissions lens is one of the clearest ways to understand the staggering scale of carbon dioxide removal (CDR) technology that the world will need to deploy. CDR refers to a range of technologies – from bioenergy with carbon capture to enhanced weathering to direct air capture and more – that can be used to pull carbon dioxide out of the atmosphere, and reverse some of the damage being done to our atmosphere. Many environmentalists have been skeptical of CDR and/or fear that the technology could be used as an excuse to delay reducing emissions. But a look at the carbon budget picture shows that we must do both.

According to the Intergovernmental Panel on Climate Change (IPCC), the global carbon budget in 2020 was approximately 400 billion tonnes of carbon dioxide, often referred to as gigatonnes (GT).

So what does that mean for Canada?

Let’s start by making some incredibly optimistic assumptions. Let’s say Canada receives 1.6% of this global carbon budget, which is our current share of global emissions. This could easily be criticized as unfair given that Canada is, in effect, being rewarded for being a large emitter today (but we will ignore that for now). Let’s further assume that Canada hits its 2030 target, and then doubles the pace of decarbonization in the 2030s, and then doubles it again in the 2040s. Even with all these assumptions, Canada would need to build out 295 Mt of emissions by 2050 to adhere to its (overly generous) share of the global carbon budget.

With a carbon budget lens, the answer about whether to deploy CDR is clear – we are going to need massive amounts of CDR to stay within safe levels of warming.

Third, a carbon budget approach can also help policymakers balance the critical need for decarbonization with other important national energy policy objectives. Our elected leaders must ensure that energy policy is able to attract low-carbon investment, support clean energy exports, deliver affordable energy for Canadian citizens, and contribute to energy security for Canada and our allies. Optimizing policy across these goals is a daunting task but can be made easier if policymakers could optimize our decarbonization policy across the cumulative emissions Canada is willing to release until reaching net-zero (or even better, net-negative), rather than being exclusively tied to a specific point-in-time target like 2030.

To be clear, adding a carbon budget lens does not mean we should eliminate point-in-time targets.

These targets are an effective tool for communicating to the public and enabling the public to hold the government accountable. These targets are also the basis upon which international climate discussions occur, and it would be impractical for Canada to drop the 2030 or 2050 target. So, Canada must keep its point-in-time targets. But it should also adopt a carbon budget goal to be evaluated in parallel with point-in-time targets.

Just as a business has multiple key performance indicators to measure its progress, Canada should expand the metrics it uses to assess its performance on decarbonization.

After all, you get what you measure.

Michael Bernstein is the Executive Director of Clean Prosperity, a Canadian non-profit that works toward practical climate solutions that reduce emissions and grow the economy. He is also a member of the federal government’s Net-Zero Advisory Body, Chair of the Advisory Board for Carbon Removal Canada, and Vice-Chair of the Carbon Competitiveness Commission.