A Climate Change Plan for the Purposes of the Kyoto Protocol Implementation Act

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Annex 2

Labour and Sector Impact Projections under the Government’s Response to the KPIA

Just Transition for Workers

Pursuant to the requirements of paragraph 5 (1) (a) (iii.1) of the Act regarding measures respecting a just transition for workers affected by GHG emission reductions, the Government considered the requirement and determined that the implementation of regulatory or other measures proposed in this Plan will not require significant worker adjustment in regulated industries.

Under a modelled scenario where all the federal mitigation measures included in this Plan are implemented, employment levels are projected to increase from 16.8 million in 2009 to 17.6 million in 2012. This represents approximately 238,000 additional potential jobs per year during the Kyoto Protocol period after the recession. Comparing employment levels under the Kyoto Protocol Implementation Act to a reference scenario – a scenario that does not include the measures included in this Plan and only includes those federal measures announced as of January 1, 2006 – the analysis suggests no discernable or statistically significant impact on employment. By 2012, with all of the federal measures included in this Plan implemented, employment is expected to be 17.565 million compared to 17.570 million in the reference case.42 Based on these results, the Government concluded that there will not be a significant impact on employment. Therefore, there will be no need to plan for measures aimed at worker transitions.

Equitable Distribution Among Sectors

Paragraph 5 (1) (d) of the Act requires the Government to ensure “an equitable distribution of greenhouse gas emission reduction levels among the sectors of the economy that contribute to greenhouse gas emissions”. The Kyoto Protocol Implementation Act does not offer a definition of “equitable”. Moreover, there is no information in the Act that could lead to an inferred or implied definition of “equitable”. In the absence of a definition, Environment Canada used its best judgment to assess whether the GHG mitigation measures reported in the Climate Change Plan represent an “equitable distribution of GHG emission reduction levels among the sectors of the economy that contribute to GHG emissions". 

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The integrated modelling suggests that by 2012, GHG emissions could be some 9 Mt lower than those projected in the business-as-usual case. The model further suggests that the majority of these reductions would occur in the transportation sector (3.9 Mt or about 44% of the reductions that are expected to occur in 2012), the industrial sector (2.5 Mt or about 28% of the reductions that are expected to occur in 2012), and in the electricity sector (1.3 Mt or about 15% of the reductions that are expected to occur in 2012). The buildings sector (residential and commercial sectors) is also expected to make an important contribution (1.1 Mt or some 13%). Based on the targeted incidence of the suite of announced federal mitigation measures, there will be no notable inequities among sectors.

Table 1: Projected Sectoral
Emission Reductions Under the
Government’s Response to KPIA (Mt)
  2010 2011 2012
Residential 0.07 0.20 0.19
Commercial 0.94 0.99 0.94
Transportation 1.97 3.29 3.92
Industrial (excluding electricity) 1.18 1.67 2.54
Electricity generation 0.42 0.55 1.32
Agriculture, waste, and others 0.00 0.02 0.06
Total 4.6 6.7 9.0

It should be further noted that the emission reductions reported in Table 1 represent where the emission reduction occurs; not where the policies were targeted. This is an important distinction for measures that affect electricity demand, and hence, emissions from the electric power sector, since the incidence of any “burden” of those reductions is more or less distributed across all household, commercial, and industrial consumers of electricity rather than electricity generators per se. This further diminishes the likelihood of an inequitable distribution of burden under the measures included in this Plan.  

In general, the reductions under this Plan are derived from national programs where the distribution of reductions would generally follow that of population from region to region. As such, impacts are broadly based, and of a magnitude where there is no evidence of equity concern.

In summary, based on the nature and limited magnitude of the measures included in the Government’s Plan for the purposes of the Kyoto Protocol Implementation Act, Environment Canada’s assessment is that they do not create equity concerns.

42  These represent changes in a specific year. Macro-economic changes of this order of magnitude are negligible, and indicate no discernable or statistically significant impact on employment.

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