THE KYOTO ACCORD
Atmospheric concentrations of greenhouse gases (GHGs) are rising rapidly as a result of human activities, mainly the burning of fossil fuels. Almost all leading climate scientists agree that a profound transformation of the global environment is likely to occur this century if this trend continues. Heeding the scientific advice, the world's governments agreed more than 10 years ago on the need to stabilize GHG concentrations. They formalized this objective in the United Nations Framework Convention on Climate Change, which has been ratified by virtually every nation in the world (Canada and the U.S. included).
Carbon cycle modelling shows clearly that stabilizing GHG concentrations will require global GHG emissions to be reduced by more than half from today's levels. This is a very considerable challenge, but it is one that we collectively need to surmount within just a few decades if the most damaging of the expected impacts are to be avoided. Yet GHG emissions are currently growing almost everywhere in the world. This creates a real urgency in beginning the job of slowing and then reversing that growth.
The world's governments quickly recognized that meeting the objective of the Framework Convention would require legally binding limits on GHG emissions. In 1997, as a first step in that direction, they negotiated the Kyoto Protocol, which sets emissions targets for industrialized countries for the period 2008-2012. In most cases, these represent modest reductions in emissions below 1990 levels - a six-per-cent reduction in the case of Canada. The vast majority of cumulative GHG emissions from human activities to date originated in industrialized countries. If the latter are not willing to take the small first step represented by Kyoto, developing countries - which have vastly inferior resources on a per-capita basis - will simply refuse to take on their own emissions constraints in the subsequent steps needed to cut global emissions in half.
Most industrialized countries have already ratified the Kyoto Protocol, and only Russia's ratification (expected within a few months) is now needed for the protocol to have legal force. Only the U.S. has refused outright to ratify. Canadians generally believe strongly in participating in multilateral, cooperative efforts to solve major global problems, which explains why polls show large majorities in favour ratifying the Kyoto Protocol. Canada has the second highest per-capita level of GHG emissions in the world - over twice as high as Western Europe or Japan. If Canada does not ratify the protocol, the international community will see it - as the U.S. is already seen - as selfishly resisting a reasonable solution to a problem to which it is a leading contributor.
So why are some influential voices in Canada opposing Kyoto? Most stress the potential effect of the protocol on the economy. But the most credible and detailed economic modelling by federal and provincial governments, taking account of U.S. non-participation, shows that the most likely macroeconomic effect would be to change Canada's projected GDP growth between 2000 and 2012 from 31 per cent growth to somewhere between 30 per cent and 31.5 per cent. For sure, economic modelling is an uncertain art, but no studies suggest anything worse than a slight slowing of strong underlying economic growth.
The real economic issue is not the overall impact, but how any impact will be shared out. Alberta, with the highest per-capita emissions in Canada, and the oil industry, often viewed as the main culprit, understandably feel vulnerable in this regard.
It is therefore important to recall federal and provincial governments' repeated joint affirmations that no region or sector should bear an unreasonable burden as a result of the Kyoto Protocol. Governments have powerful policy tools at their disposal to ensure that that is the case - notably, flexibility in the way emissions permits are allocated under the domestic emissions trading system that is expected to be at the centre of Canada's Kyoto implementation plan.
The Pembina Institute believes in fair sharing of responsibility to reduce emissions between regions and economic sectors. But Canada's Kyoto implementation plan must also initiate a shift in the economy away from the most GHG-intensive resources, like oilsands and coal, towards less GHG-intensive ones like natural gas, renewable energy, and the enormous "resource" that is energy efficiency. This is a shift that Alberta can lead and benefit from if it so chooses.
Opponents of Kyoto often focus on risks to our competitiveness if Canada ratifies while the U.S. does not. But several studies indicate that the U.S. withdrawal has actually lowered the protocol's cost in Canada by reducing the expected price of international emissions credits. This is a result of the protocol's flexibility in allowing countries to meet their emissions targets partly by purchasing such credits. The Pembina Institute wants Canada to maximize the amount of domestic emissions reductions, and reap the associated benefits (mentioned later in this article), but the safety valve of international emissions trading refutes Kyoto opponents' claim that our target is a strait-jacket.
Emissions trades occurring today are confirming the low price of credits. It is also important to understand that governments in the U.S. have taken far more significant action to date to reduce GHG emissions than governments in Canada - as detailed in a recent Pembina Institute report. By implementing Kyoto, Canada will initially be catching up with the U.S., not getting ahead.
Perhaps what most undermines Kyoto opponents' forecasts of economic damage is the fact that major Canadian GHG emitters such as Suncor and TransAlta have voluntarily taken on Kyoto-level targets for their net corporate emissions. They would hardly have done so if they believed the protocol would seriously harm their economic prospects. BP's CEO recently described how his company had met its global 10 per cent GHG reduction target seven years ahead of schedule and "at no net economic cost."
Indeed, implementing the Kyoto Protocol will have several important benefits for Canada. It will result in a more energy-efficient economy and create major new business opportunities in low-GHG technologies, benefiting rapidly growing, innovative Canadian companies like Vision Quest (windpower), Ballard (fuel cells), Iogen (ethanol fuel) and many others. Far from harming our economic competitiveness, these things will enhance it and position Canada advantageously for the future and inevitable tightening of international restrictions on GHGs. A reduction in fossil fuel use will mean a reduction in the several thousand premature deaths that the medical community estimates occur annually in Canada as a result of urban air pollution.
Last but not least, concerted international action to reduce GHG emissions will make a start towards avoiding the enormously costly storms, droughts, coastal flooding and other impacts that climate models tell us to expect if emissions continue to rise unchecked.
If these benefits are there for the taking, why not pursue them with a "made in Canada" plan instead of tying ourselves to Kyoto? The answer is that despite the good initiatives of a few far-sighted companies, formidable vested interests and inertia prevent Canada from controlling its GHG emissions in the absence of strong government leadership in the form of regulations and economic instruments. During the 1990s, when governments relied instead on voluntary and educational initiatives, Canada's GHG emissions rose by 20 per cent, a gross violation of our commitment, enshrined in the Framework Convention on Climate Change, to bring our emissions back to the 1990 level by 2000.
The problem was that this commitment was not legally binding, and so governments failed to muster the political will to implement the policies needed to meet it. This situation will certainly continue if Canada pursues a unilateral approach to climate change. By ratifying Kyoto, on the other hand, we will be held to our emissions target by the international community and face sanctions in case of non-compliance. That is essential to create the political will to implement the strong policies that Canada needs to reduce our emissions.
The notion that the federal government has no idea how to implement the Kyoto Protocol, or, alternatively, that the government has a plan but has not consulted industry and the provinces about it, is nonsense. The two-year National Climate Change Process, established in 1998, entailed exhaustive consultations with industry associations, provinces and environmental groups and identified more than 300 individual measures that governments could implement to reduce GHG emissions. The federal government then put forward four different packages of such measures in a May 2002 discussion paper that was subject to further nationwide consultations.
The government will publish its chosen Kyoto implementation plan prior to putting Kyoto ratification to a vote in Parliament before the end of this year. Canadians' true interests demand that our elected representatives choose the cooperative, international approach to addressing this major global challenge, rather than a path of isolation and inaction that shirks our global responsibilities.
Matt McCulloch, P.Eng., is with the Calgary office of the Pembina Institute for Appropriate Development, in a lead technical role in the institute's Eco-Solutions Group.
Dr. Matt Bramley is the Pembina Institute's director of climate change.