Podcast: Production or consumption-based accounting for GHGs? It makes a huge difference to Alberta

Alberta fares much better under a consumption-based GHG emissions accounting system, according to a new study

Nations around the world are beginning to implement policies they hope will reduce greenhouse gas emissions, including Canada. Should those policies target the companies that produce energy or the consumers that use it? This question is of enormous importance to Alberta (38% of total Canadian emissions), by far the country’s biggest emitter thanks to the oil and gas industry.

Dr. Kent Fellows, economist, School of Public Policy, Univ. of Calgary.

In this podcast, I interview Prof. Kent Fellows of the School of Public Policy at the University of Calgary. He and Sarah Dobson have published a series of papers entitled, Big Feet and Little Feet Provincial Profiles (one for each province, and for the territories. You can download them here.)

Take this example: The Alberta oil sands crude is shipped by pipeline to refineries in the American Midwest, where it’s turned into gasoline. For policy purposes, who should be dinged with the emissions?

The oil producer who extracted the crude oil? The pipeline operator that transported it to market? The refinery? Or the consumer who burns that gasoline and ultimately creates the demand in the first place?

Fellows and Dobson approach emission accounting not from the traditional “production” basis, but from a “consumption” basis.  The report details who the big emitters in Canada are in each province and why.

“Understanding the consumer’s role allows us to identify when emissions produced in one province support consumption in another province or outside of Canada,” says Fellows.

“The substantial volume of embodied emissions in inter-provincially traded goods and services provides strong evidence to support the implementation of a coordinated National approach to carbon pricing in Canada. Understanding the consumer’s role also provides support for the use of “output based allocations” (which are being employed in Alberta and are expected to be part of the national emissions pricing backstop) to maintain international competitiveness.”