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Decoupling of production activities and greenhouse gas (GHG) emissions, or a decline in GHG intensity, is a key metric for gauging GHG mitigation performances. In this study, we explore the determinants of GHG intensity in Canadian industries to understand its key drivers. This study is relevant, because Canada is a developed country characterized by high energy and GHG intensities. Canada has also introduced a series of policy measures to mitigate GHG emissions, including a carbon tax and investments in renewable electricity. The most significant factor for GHG intensity is energy intensity. However, fuel mix, policy trends, and sectoral shifts are essential. After conducting stationarity and cointegration tests, we estimated the relationship between GHG intensity and these determinants using panel error correction, dynamic fixed effects, and dynamic OLS methods to determine the long-run relationships. Besides the strong effect of energy intensity, we found that industrial production mix that indicates sectoral shifts, fuel mix, and the time-fixed effects that capture factors such as the introduction of a carbon tax and technology standards have statistically significant impacts on GHG intensity. We found that industries that rely more on fuel sources other than electricity are characterized by higher GHG intensity. The policy implication is that energy efficiency and fuel switching are essential for reducing GHG intensity, but the role of factors such as sectoral shifts should not be ignored. [ABSTRACT FROM AUTHOR]

Activities to reduce net greenhouse gas emissions by biological soil or forest carbon sequestration predominantly utilize currently known, readily implementable technologies. Many other greenhouse gas emission reduction options require future technological development or must wait for turnover of capital stock. Carbon sequestration options in soils and forests, while ready to go now, generally have a finite life, allowing use until other strategies are developed. This paper reports on an investigation of the competitiveness of biological carbon sequestration from a dynamic and multiple strategy viewpoint. Key factors affecting the competitiveness of terrestrial mitigation options are land availability and cost effectiveness relative to other options including CO2 capture and storage, energy efficiency improvements, fuel switching, and non-CO2 greenhouse gas emission reductions. The analysis results show that, at lower CO2 prices and in the near term, soil carbon and other agricultural/forestry options can be important bridges to the future, initially providing a substantial portion of attainable reductions in net greenhouse gas emissions, but with a limited role in later years. At higher CO2 prices, afforestation and biofuels are more dominant among terrestrial options to offset greenhouse gas emissions. But in the longer run, allowing for capital stock turnover, options to reduce greenhouse gas emissions from the energy system and biofuels provide an increasing share of potential reductions in total US greenhouse gas emissions. [ABSTRACT FROM AUTHOR]