The Government of Canada has set a new climate goal for reducing greenhouse gas emissions by 45% to 50% by 2035 on a 2005 basis. The official described this goal as the “next step” to achieve its net zero by 2050, building on the 2030 target to set a clear direction for the next decade of climate action. 

The new goal set by Canada will create a regulatory framework that may create investment opportunities in clean technologies and sustainable practices for private market firms, asset managers, and impact investors, ultimately driving capital towards green initiatives. 

Let’s discuss the new target in detail. 

Key aspects of Canada’s new emission reduction target

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  The new target is a requirement under the Net-Zero Emissions Accountability Act of Canada, in which the government has to establish a five-year national emission target 10 years in advance. The new target builds on the 40-45% target, set in 2030. 

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  The new 2035 emission reduction goal represents only a small increase from the existing 2030 goal. Critics like the Net-Zero Advisory Body have expressed concerns about this fact, mentioning it falls short of their recommendations of a 50%-55% reduction. 

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  Many co-benefits are anticipated to meet the new emissions reduction target, including greater investment in renewable energy projects, better air quality, improved public health outcomes, and job creation in growing sectors.

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  To meet this new goal, Canada will create a detailed Emissions Reduction Plan (ERP) for 2035 by 2025, which will include the precise steps and actions required to accomplish these objectives. The ERP will be developed with consultations from Canadians, investors and stakeholders.

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