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Market Snapshot: Canada’s energy and emissions intensities have been declining for decades

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Release date: 2019-06-19

The relationship between a populations’ energy use, greenhouse gas (GHG) emissions, and economic growth can be examined through four factors of what is called “the Kaya identity”:Footnote 1

Population

Gross domestic product (GDP) per capita

Energy intensity (energy consumed per $ of GDP)

GHG emissions per energy use Footnote 2

The Kaya identity for Canada shows that, as our economy and population has grown, Canada’s energy intensity has steadily decreased. While Canada has experienced significant economic growth from energy-intensive industries such as the oil sands, GDP growth from less energy-intensive sectors, such as commercial and public buildings, was stronger. In addition to this structural shift in the Canadian economy, energy efficiency has improved. Canada’s energy intensity was 40% lower in 2017 than in 1981, and 30% lower than in 1990. The NEB’s report Canada’s Energy Transition: Historical and Future Changes to Energy Systems also has information about the evolution of energy use and emissions.

Figure 1: Index of Economy, Energy Use, and Emissions in Canada (1981 – 2017)

Source and Description Source: Statistics Canada (Tables 25-10-0004-01, 25-10-0029-01, 36-10-0222-01, 17-01-0005-01), ECCC – National Inventory Report 1990-2017 Description: The line chart illustrates various Kaya factors for Canada between 1981 and 2017. The numbers are displayed as an index using 1990 as a base year except for population. Between 1990 and 2017, Canada’s population grew 32% (from 27.7 million to 36.7 million). Over that same period, GDP per capita grew by 39% while energy intensity and emissions per energy use declined by 29% and 9%, respectively. Emissions intensity declined by 35% between 1990 and 2017. Note: GHG emissions figures for Canada are only available starting in 1990.

Emissions per energy use represents the carbon intensity of Canada’s fuel mix. As Canada shifts to less carbon-intensive sources of energy, including non-emitting sources, emissions per energy use will continue to decline. Canada’s emissions per energy use was 14% lower in 2017 than in 1990. The majority of energy consumed by Canadians is from fossil fuels such as gasoline, diesel, and natural gas. In some provinces, coal is also used for electricity generation.

When all four Kaya identity factors are multiplied, they equal total GHG emissions. In 2017, Canada’s GHG emissions were 716 megatonnes (MT) of carbon dioxide equivalent, a net decrease of 15 MT or 2.0% from 2005 emissions.Footnote 3 Canada’s commitment under the Paris Agreement involves a 30% reduction of its GHG emissions from 2005 levels.

Footnote 1 The Kaya identity was developed by Japanese academic Yoichi Kaya in 1991. An identity in mathematics is an equation that holds true, no matter what values are chosen for each variable. Return to footnote 1 referrer Footnote 2 Emissions intensity (GHG emissions per $ of GDP) is not a Kaya identity factor, but it is another important metric for analysts and policy makers. In 2017, Canada’s emissions intensity was 35% lower than in 1990. Return to footnote 2 referrer Footnote 3 In 2017, net emissions increased 8 MT or 1.1% from 2016. The increase between 2016 and 2017 is the result of higher emissions from the oil and gas (7 MT) and buildings (3 MT), and declines in heavy industry (2 MT) and electricity generation (1 MT). Return to footnote 3 referrer