This article was written by Aaron Cosbey and was published in the Toronto Star on November 10, 2023.

AARON COSBEY IS A SENIOR ASSOCIATE WITH THE INTERNATIONAL INSTITUTE FOR SUSTAINABLE DEVELOPMENT.

Every two years, a group of analysts from around the world join together to work through a straightforward calculation. They add up all the planned future production of oil, gas and coal worldwide, add up how much carbon it would emit when burned, and then calculate how far that would push us past the Paris Agreement targets of 1.5 and 2 C of warming.

Given this year’s wave of global climate-related disasters even at 1.2 C, that’s an important question.

The 2023 version of the Production Gap Report — compiled by five leading research organizations worldwide, including Canada’s International Institute for Sustainable Development — is not happy reading. Projections call for more than twice as much fossil fuel production by 2030, as would be consistent with the 1.5 C target, and roughly 70 per cent too much for 2 C of warming.

From an environmental perspective, this is unsettling. The global fossil fuel sector is collectively betting that the world will not make significant progress toward the targets that the countries of the world have set in order to spare us from the worst climate change impacts. If they are right, one of Canadians’ most climate-impacted years in history, replete with wildfires, floods, storms, droughts, and extreme heat events, will become the baseline from which things just get worse.

From an economic perspective, the news for Canada’s oil and gas producers is also unsettling. There is a huge disconnect between those projected production increases and what every credible analyst projects for the future of demand for fossil fuels. The International Energy Agency (IEA) projected this year, for the first time ever, that even their most lax climate policy scenario will see global demand for oil, gas, and coal peak before 2030.

To illustrate the disconnect: the Production Gap Report projects production of oil in 2050 at 116 million barrels per day and IEA predicts that under announced policies demand will be 55 million barrels.

Some in Canada’s oilpatch dismiss these concerns, arguing that ethical, low-cost, low-emission Canadian producers will be among the last global producers standing, arguments I have rebutted elsewhere.

But those arguments are a sideshow. The real question is: should Canadians care whether we sell the proverbial last barrel of oil, the last cubic metre of gas?

Long before we get there, our producers will be selling into a lowprice market, making low profits, and remitting few royalties and taxes. Investment in new production will tank, with employment in the sector following (accelerating existing trends).

The post-peak survivors may still be selling oil and gas, but we will not be getting the government revenues and employment that are the reason we want them to sell it in the first place.

What does all this mean for Canada?

First, it means we should stand firm on our emissions targets — 40 to 45 per cent reductions by 2030, and net zero by 2050 — even if they contradict the expansion plans of our oil and gas producers. We can’t allow the fossil fuel sector’s bet against climate policy to be proven right.

Second, we should stop using public funds to support fossil fuel production. Oil and gas are ultimately sunset sectors and will not contribute to Canadian prosperity in the future as they have done in the past, so our support will not pay off in jobs or government revenues. In fact, if support encourages those sectors to grow, it will just set up fossil fuel dependent workers, communities, provinces, for a more painful post-peak crash.

Third, we should invest public dollars instead into cushioning the crash as much as we can, helping workers shift to more promising sectors, and helping to grow those new sectors, many of which can build on oil and gas sector skills and resources.

The Production Gap Report paints a picture of a world we can’t afford to see come true. Canadian policy can help craft a more livable, prosperous alternative.