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Lawyers warn of carbon-capture subsidies in Budget 2022

Thursday, April 7, 2022

xʷməθkʷəy̓əm (Musqueam), Skwxwú7mesh (Squamish) & səl̓ilwətaʔɬ (Tsleil-Waututh) Territories/VANCOUVER

West Coast Environmental Law Association issued the following statement regarding Budget 2022:

The federal government’s Budget 2022 makes a lot of money available for some high-tech solutions to climate change, without recognizing the limited role that science says they should play in addressing the climate crisis, say the authors of a recent report on Negative Emissions Technologies.

The Budget commits the government to fund over half (60%) of the costs of Direct Air Capture (DAC) facilities, an experimental technology which, if not done carefully, can have huge impacts on water, energy use and can actually increase greenhouse gas emissions. Canada does not currently have the laws in place to ensure that DAC projects are developed in a climate- and environmentally-responsible manner.

"Budget 2022 treats Direct Air Capture and other technologies that suck carbon dioxide out of the air like a silver bullet that we should throw taxpayer dollars at so that the oil and gas industry can keep expanding,” said Andrew Gage, Staff Lawyer at West Coast Environmental Law. “Science recognizes an important but limited use for these technologies in stabilizing our climate, funded by polluters, but they must not be used as an excuse so that Canada can avoid moving rapidly away from oil and gas development."

The report, Net Zero or Net Reckless, recently released by West Coast Environmental Law, reviewed the available scientific literature on DAC and other Negative Emissions Technologies (NETs), and identified four principles governing best practices in the use of NETs:

  • Because of the risks, limitations and uncertainties, use NETs only for atmospheric restoration (reversing historic emissions) and to compensate for emissions deemed essential and extremely difficult to decarbonize.
  • Ensure that NETs result in actual and permanent removals of CO2 from the global atmosphere, resulting in net-negative emissions.
  • Consider and manage the land, environmental, energy, social and cultural impacts of NETs.
  • Ensure that polluters – not taxpayers – pay for the limited NETs that are needed.

While these principles were developed based on scientific studies concerning NETs, many of the same issues arise more generally with Carbon Capture, Utilization and Storage (CCUS), which the government plans to subsidize through a 50% tax credit.

While West Coast Environmental Law welcomes confirmation that Budget 2022 does not allow carbon dioxide captured from DACs or Carbon Capture to be used for Enhanced Oil Recovery, Gage says, “The government clearly sees DACs and CCUS as a good news story without recognizing their risks and limitations. Canada needs to rethink its approach to these technologies to ensure that they actually help solve the climate crisis without creating new environmental and social problems.”

West Coast Environmental Law is part of the Green Budget Coalition, which also called for safeguards to ensure that the tax credit for CCUS did not become a subsidy to the expansion of oil and gas production in Canada.

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Click here to read Net Zero or Net Reckless.

Click here to read the Green Budget Coalition submissions on fossil fuel subsidies.

For more information, please contact:

Andrew Gage| Staff Lawyer, West Coast Environmental Law
604-601-2506, agage@wcel.org

Alexis Stoymenoff | Director of Communications, West Coast Environmental Law
604-684-7378 ext. 228, astoymenoff@wcel.org