Reflections on Canada’s role at COP27

COP 27, the United Nations annual climate conference, officially wrapped up this past weekend in Sharm el-Sheikh, Egypt. For the Canadian federal government, these conferences have been used as a major milestone to showcase many signature climate pledges – including a cap on methane emissions. However, unlike COP meetings past, there was a heightened international effort to phase out fossil fuels, suggesting that this could be an important theme in the future.

Canada’s COP27

With Prime Minister Trudeau opting to participate in other global events such as the G20 Summit and ASEAN Summit, Environment Minister Steven Guilbeault led Canada into COP27 with a determined focus on the international goal to mobilize US$100 billion each year in climate financing to developing countries and small island states from 2020 to 2025.

A recent review of these efforts – which are co-led by Canada – found that “a more than US$20 billion annual increase would be required to meet the US$100 billion goal”. It did note that there “have been a number of positive developments” in terms of raising these funds and that these efforts could finally meet their goal by 2023. Delegates to COP27 doubled down on this promise – publishing a renewed commitment to a robust long-term climate financing mechanism on November 19.  

As negotiations began to take shape, Canada came under fire for its continued oil and gas production as the commitment to a complete phase-out of all fossil fuels was pushed to be included in the final agreement. Minister Guilbeault stated that Canada would not be open to adding oil and gas to the phase-out language – citing legal challenge concerns – and that the focus remains on regulations and policies that reduce greenhouse gas emissions. Ultimately, language calling for the “phasing out of all fossil fuels” was not added to the overarching Sharm el-Sheikh Implementation Plan – with the document making the softer commitment to end the use of unabated thermal coal generation and the phase-out of fossil fuel subsidies.

Three outcomes to watch going forward

Cementing Canada’s position as a climate action leader

Last year at COP26 in Glasgow, Natural Resources Minister Jonathan Wilkinson committed to prioritizing support for clean technology and ending new direct public support for the international unabated fossil fuel sector by the end of 2022. The government of Canada is to develop policy direction to help define this scope. The 2022 Fall Economic Statement gave a first look into what clean technology support would look like through provisions such as an investment tax credit and Canada Growth Fund. Additionally, Minister Guilbeault reaffirmed the commitment to accelerating the development of critical policies.

Fulfilling the second half of this promise would ensure that Canada remains a leader in its environmental commitments.

Efforts to build out domestic hydrogen production

The most recent International Energy Agency (IEA) World Energy Outlook states that the world is struggling with a shortage of clean energy – and that one of the best ways to build up energy security amid a crisis is to invest in decarbonization. The federal government seems to agree with that approach, having recently signed an agreement to “Enhance German Energy Security with Clean Canadian Hydrogen.” This agreement commits Canada to export “clean… hydrogen by 2025” via “a transatlantic Canada–Germany supply corridor.” The 2022 Fall Economic Statement proposed an investment tax credit for clean hydrogen based on lifecycle carbon intensity, for which the Department of Finance is expected to launch a consultation in the coming weeks.

Increased Climate Funding

As co-leader of the global effort to raise capital support for developing countries and island nations to adapt to and mitigate climate change, Canada has stepped up its own financial pledges to these states. This intention has included a $10 million commitment to fund “Multi-Hazard Early Warning Systems in the Caribbean, Pacific, and Southeast Asia” and a renewed promise to meet Canada’s $5.3 billion international climate finance commitment.

With 2023 approaching fast, will these efforts be executed, and will they be enough for the Liberals to have the international community laud Canada as a part of the low-carbon future? Only time will tell – but PAA will be watching closely to see what announcements the federal government will be making to bolster their climate credibility.