Extracted Carbon: Re-examining Canada’s contribution to climate change through fossil fuel exports

We just published a new report, Extracted Carbon: Re-examining Canada’s contribution to climate change through fossil fuel exports, by yours truly. It is part of the Corporate Mapping Project, a new mega research partnership led by CCPA’s Shannon Daub and UVic’s William Carroll.

The new report tallies up all of the carbon Canada extracts as fossil fuel that ends up in the atmosphere. Normally, when emissions for Canada are reported, we don’t count the carbon in the fossil fuels we export. This means only half of the carbon we extract gets counted as part of our Paris Agreement commitments. I crunch these numbers, and also do the math on a carbon budget for Canada, and how that limit compares to planned increased fossil fuel production and new infrastructure like pipelines and LNG plants.

Below is an oped, summarizing the key takeaways, and the full report is here. The Huffington Post also ran this piece, “Green paradox” pushes Canada to extract more oil faster”:


Canada cannot have it both ways on climate and fossil fuel expansion

Marc Lee

With great fanfare and a claim that “Canada is back,” Prime Minister Trudeau helped usher in the Paris Agreement on climate change in December 2015. Since then, however, the federal government has pushed to expand fossil fuel production through new bitumen pipelines and LNG terminals.

This contradiction points to a loophole in the Paris Agreement, one that perfectly fits Canada: countries have committed to reducing emissions within their borders, but not the carbon that is extracted and burned elsewhere.

Paris poses no limits or sanctions on the supply of fossil fuels being brought to market by producing countries. For exporters like Canada only the emissions from getting fossil fuels out of the ground and to the border are counted.

As a result, producing countries have a powerful incentive to respond to the Paris Agreement by doubling down on fossil fuels now before their value evaporates.

This “green paradox” is bad news for the climate.

The amount of fossil fuels burned for energy use in Canada has remained relatively flat since 2000. This is because emission increases in Alberta from the oil sands have largely been offset by reductions in Ontario and the Maritimes from the phase-out of coal-fired electricity generation.

But if we look instead at what we dig, not just what we burn within our borders, there has been a relentless rise in carbon emissions.

Extracted carbon – the amount of fossil fuel removed from Canadian soil that ends up in the atmosphere as carbon dioxide – has grown dramatically. These emissions totaled 1.2 billion tonnes of CO2 in 2014, up 26 per cent since 2000.

This increase is almost exclusively because of growing exports of fossil fuels. In 2014, the total amount of emissions embodied in Canada’s total exports of fossil fuels was slightly larger than all of greenhouse gas emissions that occur within Canada.

The major story is that Canada’s exports of crude oil have surged (mostly from the oil sands), while imports have declined. Net exported emissions (exports less imports) from crude oil were more than five times higher in 2015 than 2000.

The Paris Agreement is thus a “good deal” for Canada because only half of the fossil fuels we extract get counted in our greenhouse gas inventory. The remainder is exported and counted where it is burned.

Exported emissions might not be a problem if the commitments made by countries in the Paris Agreement were enough to keep global warming below 1.5 to 2 degrees (above pre-industrial levels – about 200 years ago). Unfortunately, this is not the case. Even if all countries live up to their pledges it would lead to a catastrophic 3 degrees of warming.

If countries were to take the science behind the Paris targets seriously, there is a finite amount of carbon that can enter the atmosphere over the next few decades. This is called a carbon budget.

What would Canada’s plausible share be of such a global carbon budget? Based on our share of global fossil fuel reserves, Canada could continue to extract carbon at current levels for between 11 and 24 years at most (the smaller the carbon budget, the less the damages from climate change). This means a planned, gradual wind-down of these industries needs to begin immediately.

Plans to further grow Canada’s exports of fossil fuels are thus contradictory to the spirit and intentions of the Paris Agreement. Growing our exports could only happen if some other producing countries agreed to keep their fossil fuel reserves in the ground.

The problem with new fossil fuel infrastructure projects, like Liquefied Natural Gas (LNG) plants and bitumen pipelines, is that they lock us in to a high-emissions trajectory for several decades to come, giving up on the 1.5 to 2°C limits of Paris.

Canadian efforts to address climate change must consider supply-side measures, such as rejecting new fossil fuel infrastructure and new leases for exploration and drilling, increasing royalties, and eliminating fossil fuel subsidies.

There is still time for to live up to our Paris Agreement commitments. Canada’s exports of fossil fuels do not need to drop to zero immediately, but nor does it make sense to pursue policies that further ramp up fossil fuel extraction.




  • Great blog post, Marc!

  • Good report- I do believe such a report needs to dig into the provincial sources. There is a whole lot of distributional aspects from the Oil sector to the raw numbers of GHGs that need to be debated in this country- and yet we still have not had that debate nor have progressives pointed the finger at the Tar sands and the cheap coal fired power that melt the tar sands insitu style.

  • Hi Marc.

    I’m having difficulty understanding the logic of your supply side accounting, in the context of a global economy. To me it makes much more sense to measure the (full life cycle) emissions embedded in what each country consumes, rather than what each country produces.

    Canada produces fossil fuels largely for consumption by non-Canadians, as China produces manufactured goods largely for consumption by non-Chinese. Those trade relationships are driven by international demand for valuable products (oil, stuff), not supply. Of course, a potential supplier must be willing to supply and could say no, but that wouldn’t directly affect demand. I think it would be fair to say that Canada produces oil and Chinese produces manufactured goods on behalf of other countries who want them but can’t sufficiently produce them themselves.

    Here’s an example that, to my mind, illustrates the problem with your approach. Imagine a global economy consisting of two highly integrated countries, A and B. A has ample reserves of oil, coal, lumber, gold and other natural resources, while B has none. B has an almost 100% advanced service economy. Both countries want what the other country has, so they produce more than what they need and trade, and their final consumption baskets are similar. A roughly equal amount of people in both countries drive cars, fly airplanes, use coal for electricity, etc. Which is more fair to say? (1) Country A is environmentally irresponsible, while country B is environmental responsible (supply side emissions accounting) or (2) Both countries are equally ir/responsible?

  • Hi Josh,

    If you go to the main paper there is a discussion about differing approaches to measuring emissions: territorial (the standard of what we burn within our borders); consumption; and extraction. Neither is better than the others; just alternative approaches.

    The extracted carbon measure is of particular relevance to Canada, and gives a different picture about Canada’s contribution to climate change than if we just look at territorial emissions.

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