Figure 8.1 – Total GHG emissions by sector #
Despite the significant transformations to the energy systems reviewed in Chapters 6 and 7, a large volume of emissions remains across all scenarios when net-zero is reached. These emissions must be captured and sequestered—or compensated by the capture of emissions elsewhere (Figure 8.1). The distinction between the two references scenarios (REF and CP30) and net-zero scenarios (NZ60, NZ50 and NZ45) is also quite clear across the entire time period, showing an important divergence even before 2030. This chart also illustrates the extent of transformations required. In this section, key differences and common points are identified across scenarios, time and sectors.
8.1.1 Evolution of reference scenarios over time
With current policies, as defined in REF, emissions grow around 7% per decade, rising from 705 MtCO2e in 2016 to 850 MtCO2e in 2050, and 885 MtCO2e in 2060. Adding the proposed carbon pricing on a 2030 horizon leads to a 9% (641 MtCO2e) reduction in 2030, far from the 40%-45% target. With respect to 2005 (739 MtCO2e), this level corresponds to a 13 % reduction by 2030, if we do not take into account the recent rise in GHG emissions (from 705 to 730 MtCO2e) between 2016 and 2019). Adding the Clean Fuel Standard regulation,1 published in December 2020 but not yet approved, to CP30 would produce a further 19 MtCO2e or 2.6% reduction by 2030, for a total of less than 12% overall GHG reduction with respect to 2016, and 16% with respect to 2005. By 2050, CP30 leads to a 15% decrease in GHG emissions with respect to 2016, reaching 23% over the following decade. Most of the difference in comparing CP30 with REF comes from lower emissions in power and energy production, as well as waste. This result shows that while the proposed carbon price increase helps overturn the recent trend in emissions when added to the rest of the policies already in place, it is not sufficient against demand drivers and deep reduction costs in most sectors.
While the three NZ scenarios (by design) introduce significant GHG emission reductions, it is interesting to look at the impact of using different horizons for this reduction. NZ50 and NZ45 bring an overall GHG reduction of 38% and 43% with respect to 2016, while NZ60 leads to a 28% reduction. Measured from 2005, these figures comply with the imposed reduction of 30% and 40% respectively for NZ60 and NZ50, and bring a substantial 54% for NZ45.
Even to reach 28% involves major sectoral transformations. Over the next 10 years, energy production, including fossil fuels and electricity, undergoes the most significant absolute reduction in GHG emissions in NZ60, with -60 and -58 MtCO2e respectively, corresponding to 55% and 70% reductions. This is followed by fugitive emissions (-50%, -27 MtCO2e), which are also linked to fossil fuel production, and industrial processes (-34%, -18 MtCO2e). Sectors such as industrial combustion and agriculture decrease by 20%, commercial buildings remain almost constant, while transport increases its emissions by 5%.
With more rapid reductions imposed by NZ50, these four sectors are transformed even more rapidly: reductions of 89% for electricity production, 62% for fossil fuel production, 58% for fugitive emissions, and 41% each for industrial process and combustion. Residential and commercial buildings accelerate their transformation, leading to 21% and 41% reductions in emissions respectively. Not surprisingly, transport (-8%) and agriculture (-5%) remain the toughest sectors to decarbonize. While there are some quantitative differences between NZ50 and NZ45, trends are very similar, with the notable fact that electricity production needs to incorporate biomass with carbon capture by 2030.
By 2040, electricity must deliver negative emissions in all NZ scenarios (18, 25 and 32 MtCO2e, respectively). For NZ50 and NZ45, industrial combustion also contributes, sequestering an additional net amount of 14 and 36 MtCO2e and capturing even more. To compensate for the slow transition of the transport sector and, to a lesser degree, agriculture, all other sectors decrease their emissions by 60% or more in NZ50 and NZ45.
While the rate of GHG reduction varies from sector to sector, as a function of cost, almost all sectors are driven to zero or near zero emissions at the end of the periods, with three notable exceptions: transport, industrial processes and agriculture—in the latter two cases, essentially because of non-energy-related emissions. In a net-zero framework, these remaining emissions must be compensated by capture and sequestration elsewhere in the system. Overall, however, modelling suggests that it is preferable, from a cost-optimization perspective, to decarbonize maximally while taking advantage of specific and sectorial CO2 capture and sequestration.
1 Clean Fuel Regulations, Canada Gazette, Part I, Volume 154, Number 51, Dec. 19, 2020. https://canadagazette.gc.ca/rp-pr/p1/2020/2020-12-19/html/reg2-eng.html