A Primer on Climate Change and Carbon Trading

What are greenhouse gases (GHGs)?

Greenhouse gases are substances that exist in the earth's atmosphere that allow sunlight to reach the planet's surface but can capture heat reflected back towards space, thereby contributing to a warming of the earth's atmosphere. Normal levels of these gases help to insulate the earth and create a habitable planet.

Elevated levels of these gases are linked to historical rises in global temperature, and scientific research has concluded that human-caused emissions of greenhouse gases most likely are contributing to the more rapid temperature increases experienced in recent decades. This phenomenon, which is expected to continue and to accelerate in the coming century, is known broadly as climate change, or global warming.

Most greenhouse gases exist naturally, but human activities, primarily the generation of energy through combustion of carbon-based fossil fuels, are pushing atmospheric levels of these substances higher than usual.

Humans cause significant emissions of greenhouse gases that include: carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and sulphur hexafluoride (SF6).

Carbon dioxide is the largest component of human GHG emissions in terms of volume, and such gases are usually measured in terms of carbon dioxide equivalent (CO2e), a metric used to compare the contribution to global warming of various GHGs. For example, the global warming potential of methane is rated as 23 over 100 years, meaning that an emission of one metric tonne of methane is equal to emissions of 23 tonnes of carbon dioxide in terms of contribution to climate change.

Atmospheric levels of greenhouse gases have nearly doubled since large-scale industrialization began around 150 years ago, from 280 parts per million CO2e to 430 ppm. The World Meteorological Organization recently reported that global atmospheric concentrations of carbon dioxide reached their highest levels ever recorded in 2005. Current atmospheric levels of carbon dioxide, nitrous oxide, and methane are higher than those in pre-industrial times by 35.4%, 18.2% and 154.7%, respectively.

The links between greenhouse gas levels, human activities such as the combustion of fossil fuels, and global temperature variability are the core elements of the climate change issue.

Where do GHGs come from?

Energy, used for electrical generation and transportation, makes up the single larges component of human-caused greenhouse gas emissions, mostly through the combustion of fossil fuels. Coal, oil, and natural gas are all hydrocarbon-based fuels that emit carbon dioxide when consumed, and provide the majority of the world's energy supply.

Deforestation and changes in land use are also major contributors to greenhouse gases, as carbon is released from storage in plants and trees. Landfills are a source of methane as waste decomposes.

Canada is a net energy exporter, producing fossil fuels that are consumed in other countries. This puts the country in a particularly difficult situation in regards to climate change.

Canada possesses close to 200 Billion barrels of estimated crude oil reserves, of which 175 Billion are located in the Alberta oil sands. This is ranked second among oil producing nations in terms of total reserves, and Canada is currently 9th in total crude oil production. Canada is the largest crude oil supplier to the United States, ahead of Saudi Arabia.

The oil sands are important to our national economy, but also cause large greenhouse gas emissions and other environmental pressures. Output is expected to triple by 2015, with corresponding increases in emissions. Responsible oil and gas firms have improved efficiency and reduced greenhouse gas emissions per barrel of output, but with the expected growth, the oil sands will remain a key contributor to Canada's rising emissions profile.

Reconciling our status as an energy supplier with reductions in greenhouse gas emissions is a priority for the federal government, which is seeking acknowledgement of our role in supplying other nations with fossil fuels.

• Overview
• What are greenhouse gases (GHGS)?
• Who determines whether climate change is real?
• What are the likely impacts of climate change?
• What can be done about climate change?
• Who regulates climate change and carbon trading?
• What are carbon credits and how do they work?
• How do Kyoto Protocol carbon credits work?
• Where are other carbon trading markets located?
• Conclusion