Modelling future impacts of the oil and gas emissions cap - Contextualizing the Conference Board of Canada’s analysis

Modelling future impacts of the oil and gas emissions cap Contextualizing the Conference Board of Canada’s analysis by Janetta McKenzie April 29, 2024 Summary The Government of Alberta, in its technical submission to the Government of Canada regarding the proposed oil and gas sectoral emissions cap, cites analysis undertaken by the Conference Board of Canada. [...] Introduction In February 2024, the Government of Alberta released its response to the proposed regulatory framework for the federal oil and gas emissions cap, which included an economic impact analysis from the Conference Board of Canada.1 The Conference Board’s analysis finds potentially significant impacts to GDP, jobs, and government revenues in Canada and Alberta as a result of the emissions c. [...] As mentioned earlier, the Government of Alberta included in its submissions to the Government of Canada regarding the economic impact of the cap on the Conference Board’s least ambitious 45 per cent methane reduction scenario. [...] For instance, the Government of Alberta cited a potential $1 trillion dollar impact on the Canadian economy as a result of the emissions cap – which is based on the cumulative impacts on nominal GDP from 2030 to 2040 in the 45 percent methane reduction scenario, and is therefore likely an artificially high figure at least in part due to the high implied average annual inflation rate. [...] We found this average annual inflation rate by first calculating the GDP Deflator in the years 2030- 2040 using the change in both nominal and real GDP listed in the Appendix, and then solving for the average inflation rate based on the changes to nominal GDP listed in the Appendix.