May 25, 2022

Alberta’s emissions profile is unique. This is why it matters.

Last month, Canada submitted its annual greenhouse gas (GHG) emissions data to the United Nations, breaking down the nation’s GHG emissions as of 2020 by province and sector.

Last week, we looked at the drivers behind Canada’s emissions reductions, particularly between 2019 and 2020. We saw that pandemic-related economic devastation drove most of the GHG reductions, but also that energy intensity improvements contributed as well. Importantly, we discussed how climate policy should both reduce emissions and generate prosperity by aiming to improve technology.

In this Quick Read, we dig deeper into the emissions inventory report to discuss the differences in Canada’s provincial emissions profiles, what causes Alberta’s profile to be distinct in Canada, and how climate policy should address Alberta’s unique economic structure.

GHG trends—a birds-eye view

After rising significantly from 1990 to 2005, national emissions have held relatively steady, disregarding the 8.9% reduction largely caused by the pandemic in 2020. These trends, however, have not been experienced uniformly across Canada. Whereas total emissions since 1990 have held relatively flat or have fallen in BC, Manitoba, Ontario, Quebec, and the Atlantic Provinces, Alberta’s and Saskatchewan’s emissions increased significantly from 1990 to 2015 before leveling off (disregarding the 2020 outlier).

Chart showing the Provincial/Regional GHG emissions results from 1990 to 2020
Alberta’s distinct emissions profile

The reason Alberta is an outlier across Canada is that the province’s industrial structure—and therefore its emissions profile—is considerably different from other provinces. Alberta’s emissions profile is dominated by the industrial (oil and gas, heavy industry, and electricity) and agriculture sectors. This isn’t typical in the rest of Canada, and only Saskatchewan is comparable—but on a much smaller scale.

In most other provinces, transportation and buildings are the largest sources of GHG emissions. Those sources are major emitters in Alberta as well, but they are dwarfed by industrial emissions. Alberta’s industrial emissions are larger than total emissions in every other province and are higher than industrial emissions in all other provinces combined.

Chart showing the emissions profile by province in 2020
Why is Alberta’s emissions profile distinct, and what does it have to do with its high total emissions?

We all know that the oil and gas sector is the single largest contributor to Alberta’s and Canada’s industrial emissions. This one sector alone accounts for 74% of Alberta’s total industrial and agricultural emissions. Alberta is home to 97% of Canada’s known crude oil reserves and about 61% of Canada’s total natural gas production; it, therefore, follows that the emissions associated with this energy-intensive sector are concentrated in Alberta—especially since a significant portion of the sector’s emissions are tied to production that has been scaled to meet global demand.

But the oil and gas sector is not the only one contributing to Alberta’s industrial and agricultural emissions.

Alberta is home to a significant portion of Canada’s productive farm and ranch land. About 32% of Canada’s total farmland area and 39% of Canada’s total cattle are located here. In particular, Alberta’s concentration of cattle increases this sector’s emissions because methane from animal production contributes a large portion of agriculture’s overall emissions. And, like oil and gas, this sector has successfully scaled its operations to meet the increasing global demand for food.

The abundance of relatively cheap oil and gas resources and major farming activities also attracts other emissions-intensive economic activity to Alberta. Heavy industrial activities have formed concentrated pockets in Alberta, such as in the Industrial Heartland, because petrochemicals, chemical, and fertilizer production facilities have affordable, reliable access to the feedstocks (e.g., natural gas and hydrogen) they need. The proximity of fertilizer production to prairie farming also makes logistical sense, but similarly concentrates fertilizer production emissions in the region.

Finally, Alberta’s electricity grid is more emissions-intensive than many other provinces’ grids. Legacy grid infrastructure tends to reflect each province’s immediately available resource base. In BC, Manitoba, and Quebec this meant affordable power could be produced by low-carbon hydroelectricity, but in Alberta, this meant that coal and natural gas combustion made the most economic sense. As Alberta businesses and individuals consume electricity, they are therefore creating a greater emissions impact than elsewhere. However, declining costs for solar and wind power; a historically lower price for natural gas; and a concerted policy push to price carbon and discontinue coal-fired power have led to a 39% GHG reduction in Alberta’s electricity sector since 2005.

Policy implications

As last week’s commentary explored, optimal climate policy will pursue technology changes and improvements that lead to GHG reductions through emissions and energy intensity improvements. These should not come at the expense of economic prosperity. A one-size-fits-all climate policy across Canada will not reflect Alberta’s distinct emissions profile.

Alberta’s industrial and agriculture sector emissions are difficult to abate, but progress must be made. Doing so will require significant government support. If done well, the benefits can be considerable—including economic growth, lower emissions, job creation, and higher government royalties and tax revenue.

For our part, we’ve devised an Alberta Low-Carbon Industrial Strategy that will help Alberta’s industrial and agriculture sectors contribute to a net-zero Canada.

Dylan Kelso, Policy Analyst

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