There is a Canadian industry that has reduced greenhouse gas (GHG) emissions by 40 percent while increasing workload by 80 percent. Long known as an efficient, safe, and environmentally friendly mode of transportation, this industry is well placed to support Canada’s economic objectives while helping it meet its emission-reduction targets. It is our national railway system.

Railways: a vital spur of the Canadian economy

According to the Railway Association of Canada (RAC), which represents freight and passenger railway companies, close to 82 million passengers and more than $280 billion worth of goods move by rail in Canada annually. Twenty-four hundred locomotives transport goods and people across more than 44,000 kilometres of track spanning nine provinces and one territory.

“We live in a geographically diverse country with a resource-based, export-focused economy that can compete internationally because of a safe, competitive, efficient, and environmentally friendly railway network” says Michael Gullo, RAC’s Director of Policy, Economic and Environmental Affairs. “Canada’s natural resource industry is poised for long-term success, and the railways are a big part of that story.”

Transporting climate change policy into the future

Whether through a taxation-based system or a market-based cap-and-trade approach, carbon pricing aspires to reduce emissions at the lowest possible cost to Canadians. Under all systems, railways are subject to compliance costs as fuel users, which typically translates into increased expenses for them and higher prices for their customers.
While the objectives of these frameworks are to limit the harmful effects of climate change, questions remain as to whether current pricing levels will lead to substantive emissions reductions in the transportation sector, which produces approximately 30 percent of Canada’s GHGs.

As an energy-efficient and low-emitting mode of transportation, Canada’s railway industry believes it can help Canada meet its GHG reduction goals. For example, a modal shift to freight rail from long-haul trucking offers a near-term solution to reducing GHG emissions while simultaneously supporting economic growth and prosperity. In Canada, rail can move one tonne of freight more than 200 kilometres on a single litre of fuel. A 100-car freight train carrying 10,000 tonnes of goods could remove more than 300 trucks from our congested road and highway network.
“A 10 percent shift of truck traffic to rail would translate to a 3.7-megatonne reduction in CO2 equivalent, while 15 percent would result in a 5.6-megatonne reduction,” says Gullo. “Both of those figures surpass the potential reductions that are going to be achieved by BC’s carbon tax, which is envisioning only a 3-megatonne reduction by the year 2030.”

How railways are part of Canada’s climate change solution 

Looking forward, Gullo believes policymakers should consider the approach undertaken in Quebec. Its PREGTI program aims to reduce freight transportation emissions by creating intermodal projects that promote the use of rail and marine transportation. Recent projects sponsored by the government include investments into railway track, transload facilities, and reload centres for prospective railway customers. “The government of Quebec has set a precedent in terms of using rail as part of their climate change solution by allocating money from their carbon pricing strategy into infrastructure for companies looking to make the switch from road to rail.”

In Quebec, revenues generated from its cap-and-trade system are directed towards programs such as PREGTI, an initiative that facilitates improved fuel efficiency and emissions levels. From 2011 to 2015, the government awarded $30.4 million to rail and intermodal infrastructure projects, resulting in reductions of approximately 210,000 tonnes of CO2 equivalent.

“At CN, we are successfully leveraging the Quebec programs to incentivize companies to switch to rail,” says Chantale Després, Director of Sustainability, CN. “We are also advocating for a similar national program in discussions with the federal government.”

Carrying the load together

Canada’s railway industry has a long history of working with the federal government, through a series of multi-year memorandum of understanding agreements, to reduce emissions produced by locomotives. In addition, Canadian rail companies are active participants in the internationally recognized Carbon Disclosure Project (CDP), with CN and CP both awarded a position on the Canada Climate Disclosure Leadership Index in 2015, in recognition of their efforts.

More work remains, according to CN’s Després, who says “the fact Canadians are not yet aware how fuel-efficient railroads are in moving heavy freight over long distances means we still need to be communicating the message to people and governments that moving goods by rail can be part of the climate change solution.”

Staying on track to a cleaner future

The recent development of a pan-Canadian carbon framework provides an opportunity for Canada to reconsider how transportation emissions are regulated and what governments can do with revenues collected from their respective carbon pricing strategies.The GHG advantage that rail maintains over other modes of transportation provides serious food for thought for policymakers across all levels of government as they contemplate reinvesting their carbon revenues.

“Positioning railways as part of the climate change solution makes a lot of sense,” says the RAC’s Gullo. “Moving goods and people by rail is far more efficient than other modes of transportation, which can help the government meet its climate change objectives.”