Canada's path to its climate targets is getting steeper. New modelling shows the country is now further from its goals. Stronger industrial policies and provincial co-operation can speed up progress, but they won't be enough on their own.

The Canadian Climate Institute's 440 Megatonnes team has just published a new report, summarized in our latest Insight, finding that Canada's climate plan will fall short of the country's targets and leans heavily on a small number of policies. Most of these policies focus on industrial and electricity emissions, and depend on strong federal-provincial co-operation to succeed. 

When those policies are designed properly, the payoff can be significant in terms of emissions reductions and competitiveness outcomes. Our analysis includes extensive modelling that shows that if governments modernize industrial carbon pricing to ensure it delivers a strong price signal consistent with the Canada-Alberta MOU then these systems can achieve roughly twice the emissions cuts compared to weaker approaches. But even these improvements will not be enough to get Canada's emissions on track.

The takeaway is clear: while Canada has powerful tools at its disposal, getting back on track will require getting the details right on existing policies, and also developing additional measures to reduce emissions and support affordability. Our analysis recommends six concrete steps that governments can take to reduce emissions while supporting Canada's long-term competitiveness.

Ross Linden-Fraser, Research Lead, 440 Megatonnes
Dave Sawyer, Principal Economist, Canadian Climate Institute and Head of 440 Megatonnes