In November 2021, representatives from around the world gather in Glasgow, Scotland to continue addressing the issue of global emissions and climate change.
It’s not a simple task. Although the Paris Agreement has been in force for several years, debate continues about the best way to meet the climate change targets set out in the Agreement. Delegates to the 2021 session will try to agree upon a crucial piece of the Paris Agreement: Article 6.
What is Article 6?
Article 6 of the Paris Agreement would enable governments from different countries to trade or share carbon offset credits – called Internationally Transferable Mitigation Outcomes (ITMOs). The goal is to spur international investment and co-operation in greenhouse gas (GHG) emissions reduction and help individual countries meet their obligations under the Paris Agreement.
Article 6 recognizes that some countries have a greater ability to reduce emissions than others. Let’s say Country A wants to reduce its emissions and Country B has resources, technologies and expertise that could help make that happen. Article 6 would provide a way for the countries to work together to reduce emissions.
For example, Canada, as a producer of natural gas and oil, is continually reducing emissions from the exploration, production and transportation of these energy sources. Canada’s responsibly produced energy – including some of the world’s lowest-emissions liquefied natural gas (LNG) – should be exported and used in countries that have high emissions, such as India and China where coal is used to generate electricity. If Canadian LNG was used instead, emissions in those countries would drop – and so would overall global emissions.
Similarly, low carbon intensity oil production can displace higher intensity sources and therefore reduce net global GHG emissions. Canada’s industry is working with governments to achieve a lower emissions future and has already established viable pathways to achieve net-zero emissions from oil production operations.
Industry’s position is that Canada should get credit for decreases in emissions made possible through Canadian innovation, technology and environmental standards. ITMOs would encourage co-operation and trade that results in a net decrease in global carbon emissions, which is ultimately the goal of Paris Agreement.
Article 6 has been debated since 2015, but so far participants have failed to finalize this important piece of the Agreement. Negotiators have struggled with many issues such as avoiding double counting of credits. There have also been calls for Article 6 to guarantee that international carbon offset projects don’t cause negative environmental or human rights impacts on Indigenous and other local communities.
What this means for Canada – and the world
Natural gas and oil producers recognize the need to reduce emissions even as energy demand grows. The industry has invested in research to develop thousands of technologies and emissions reduction solutions (including carbon capture) and continues to take action to reduce emissions. As an industry, we believe collaboration and innovative technologies, supported by government policies and guided by key principles, can bring effective solutions to global climate change.
Recognizing ITMOs would be beneficial for Canada in two ways:
- ITMOs would help Canada achieve its commitments under the Paris Agreement.
- Canada can grow its low carbon intensity industries to meet global market demand, helping to reduce global emissions while creating economic growth and jobs across the country.
The need to address climate change is growing, but energy poverty remains widespread, with billions of the world’s poorest and most vulnerable people desperately needing access to reliable, affordable, low-carbon energy. The energy shortages that parts of Europe are facing this fall are what billions in the developing world wake up to every day. Reducing global emissions needs global co-operation and leadership, and Canada is a global leader in responsibly produced natural gas and oil.