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Canada pledges bold new 2030 carbon reduction target, will issue first green bond

Ottawa’s new budget targets emission cuts of 36% below 2005 levels by 2030


The Peace Tower is pictured on Parliament Hill in Ottawa on Jan. 25
The Peace Tower is pictured on Parliament Hill in Ottawa on Jan. 25 PHOTO BY SEAN KILPATRICK The Canadian Press


Canada said on Monday it plans to cut carbon emissions more aggressively and issue its first green bonds, part of a global push for more action on climate change.


Ottawa’s budget for the fiscal year ending next March sets a new target to cut emissions by 2030 to 36% below 2005 levels, more ambitious than its previous 30% goal. Canada has a net zero emissions target of 2050.


An even more ambitious 2030 target will be set “in the coming days”, the budget says, probably when Prime Minister Justin Trudeau attends a virtual leaders summit on climate starting on Thursday. It will be hosted by U.S. President Joe Biden, who has put new focus on fighting climate change.

Trudeau has said he wants to “build back better” after the pandemic, but critics have said Canada, the world’s fourth-largest oil producer, may lag the United States if more action is not taken.

“In 2021, job growth means green growth,” Finance Minister Chrystia Freeland said in a speech to lawmakers.

Canada has a carbon pricing scheme but has failed to meet past climate pledges, which have met resistance from politicians who say the targets threaten the oil industry’s future.

In a bid to get the energy sector to pivot toward lower emissions, the budget offers tax credits for capital invested in carbon capture utilization and storage projects, and for hydrogen production, though it said the rate of the incentive would be determined in coming months.

Ottawa will also issue its first green bonds this year to fund projects aimed at fighting climate change. Some C$5 billion will be issued, or about 2% of total government bond issuance during the current fiscal year.

Prime Minister Justin Trudeau and Chrystia Freeland, deputy prime minister and minister of finance, at a photo opportunity before tabling the federal budget in the House of Commons in Ottawa, on April 19

Prime Minister Justin Trudeau and Chrystia Freeland, deputy prime minister and minister of finance, at a photo opportunity before tabling the federal budget in the House of Commons in Ottawa, on April 19 PHOTO BY DAVID KAWAI /Bloomberg


The budget includes C$17.6 billion ($14.1 billion) to support what the government calls a “green recovery”.


That includes investments in companies that specialize in green technologies, as well as a 50% reduction in income tax rates for businesses that manufacture zero-emission technologies, and a C$5 billion top-up to a fund used to invest in and attract green tech companies, including zero-emissions carmakers.


“There are definitely jobs to be found by focusing on technologies like carbon capture, electric vehicles, and clean tech generally,” said Trevin Stratton, chief economist at the Canadian Chamber of Commerce.


The carbon reduction plan will also offer interest-free loans to homeowners of up to C$40,000 to improve energy efficiency.


Strong commitment from U.K.

Prime Minister Boris Johnson will this week commit Britain to cutting carbon emissions by 78% by 2035, almost 15 years earlier than planned, in one of the most ambitious environmental targets set out by a developed nation.


The new timetable, which will require a fundamental restructuring of the way British homes, cars and factories are powered, comes after China and the United States agreed that stronger pledges were required to tackle climate change.


Britain’s opposition parties and environmental campaigners welcomed the ambition but said the move had so far been undermined by the government’s lack of policies to deliver it.


Greenpeace said the building of new roads and runways would have to stop. “Targets are much easier to set than they are to meet, so the hard work begins now,” it said.


Johnson will make the commitment, to cut emissions by 78% from their 1990 levels, this week ahead of a U.S. climate summit that will be hosted by President Joe Biden and before Britain hosts the U.N. Climate Change Conference, known as COP26, in November, a person familiar with the situation said.


The hard work begins now


Britain set a greenhouse gas emission target in 2019 of net zero by 2050, in line with the 2015 Paris climate agreement which called on countries to take steps to keep the global temperature rise as close to 1.5 degrees Celsius as possible.


Tom Burke, a former government adviser, said the UK’s approach to cutting emissions had so far looked like a “Boris blunderbuss” with a huge range of marginal moves rather than a coordinated structural change.


“The most important thing I think is to focus his policy around energy efficiency, around wind and solar and around storage of electricity and the management of the grid,” he told BBC Radio.


Myles Allen, head of the Climate Dynamics Group at the University of Oxford, said the government would also have to work out how, and who would pay, to dispose of carbon dioxide safely.


“Disposing of carbon dioxide safely by reinjecting it back under the North Sea always costs money because it is far, far cheaper to fly-tip it into the atmosphere,” he said.


The Financial Times said emissions from international aviation and shipping were likely to be included in the target, a decision that was welcomed by environmental groups.


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