A Climate Change Plan for the Purposes of the Kyoto Protocol Implementation Act -- May 2009

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Annex 3

Sector and Labour 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 greenhouse gas emission reductions, the Government considered the requirement and determined that the implementation of regulatory or other measures proposed in this report will not require significant worker adjustment in regulated industries.

Under a modeled scenario where all the federal mitigation measures included in this plan are implemented employment levels are projected to increase from 17.1 million in 2008 to 17.8 million in 2012. This represents approximately 64,000 additional potential jobs per year during the Kyoto Protocol period. 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 and provincial 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 17.8 million compared to 17.7 million in the reference case.13 Based on these results, the Government concluded that there will not be a significant impact on employment. Therefore, a just transition for workers is not necessary.

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 integrated modeling suggests that by 2012, greenhouse emissions could be some 74 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 regulated industrial sectors (i.e., 53 Mt or about 72% of the reductions are expected to occur in 2012). The agricultural, wastes and others and transportation sector is also expected to make an important contribution (i.e., some 17% and 9% respectively). Based on these results, and more specifically the target incidence of the suite of announced mitigation measures, the Government concluded that there will not be any notable inequities among sectors.

Table 2: Projected Sectoral Emission Reductions Under the Government’s Response to KPIA
  2008 2009 2010 2011 2012
Residential 0.1 0.2 0.3 0.4 0.5
Commercial 0.2 0.4 0.5 0.6 0.8
Transportation 0.4 0.9 3.3 4.2 6.3
Industrial: Non-Large Final Emitters 0.0 -0.2 0.3 0.5 0.8
Industrial: Large Final Emitters 0.1 0.6 40.9 47.3 53.7
Agriculture, Wastes & Others 0.0 -0.2 6.9 10.0 12.3
Total Reductions 0.7 1.6 52.2 63.1 74.4

It should be noted that the emissions reductions reported in Table 2 represent where the emission reduction occurs; not where the policies were targeted. This is an important distinction for measures which affect electricity demand, and hence, emissions from the Electric Power Sector.

Measures aimed at reducing electricity demand are typically implemented by residential households or by commercial/institutional users. As such, the reduction in electricity use occurs in the residential or commercial sector. However, any reductions in emissions related to lower electricity use appears in the Industrial: Large Final Emitter category.

Given the treatment of electricity-related emissions, the contribution of the residential and commercial sector is somewhat underestimated, while the contribution of the Electric Power Sector (and Industrial: Large Final Emitter category in general) would be overestimated.

In summary, the modeling suggests that impacts across all sectors will not result in any notable inequities among sectors.

13 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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