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Fallout from Kyoto

January 1, 1998







Last month in Kyoto, the federal government appeared to make good on its commitment to make Canada a leader in dealing with the threat of global climate change. But ambitious targets and high-minded rhetoric will not produce a sound action plan in the absence of a true national consensus on what needs to be done. And by giving Canada one of the more ambitious reduction targets, the government will ask Canadians to pay a significant price without any assurance of a sustainable, long-term solution to the issue.


Simply put, the commitment to reduce our emissions to six percent below the levels of 1990 by the period 2008/2012 is unrealistic and could only be achieved by a considerable economic slowdown. Since 1990, a recession year in Canada, we have enjoyed robust levels of economic growth, record levels of exports and a population increasing at the rate of almost one percent a year — all of which result in increasing energy use and higher emissions. In fact, as the accompanying table illustrates, current projections put Canada almost 19 percent above 1990 levels by 2010. Accordingly, the Kyoto agreement really means for Canada a reduction in excess of 20 percent.


The Kyoto Protocol does not establish any targets whatsoever for developing countries, even though these countries will contribute the majority of global emissions by early in the next century. Even within the developed world, a disproportionate burden will fall on just three countries — Canada, the United States and Japan. Because they interpret their commitment as a collective one, members of the European Union will benefit from the reductions already achieved in Germany and the United Kingdom as a result of economic restructuring. And Australia and Norway achieved recognition in Kyoto for their special circumstances and will be permitted to increase emissions from the 1990 base.


But most importantly, Canadians are woefully uninformed about the complex dimensions of this issue and the impact which attempts to reduce energy use will have on their daily lives and standard of living. As the costs of the Kyoto decision become more apparent to Canadians — in terms of higher prices, lost jobs and unbalanced regional impacts — maintaining public support for the measures required will be increasingly difficult.


If the federal government intends to develop a sensible national strategy on climate change, it must address the following priorities:


First, it will need to repair the damage done by the decision to abandon the consensus reached with provincial ministers just a few weeks prior to Kyoto. The government must immediately state its commitment to building a genuine national consensus on an appropriate strategy and devise a process to build support from all key stakeholders.


Second, the federal government should not ratify the Kyoto Protocol unless an agreed strategy is in place and until our key trading partner, the United States, has indicated its intention to ratify.

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Third, industry in Canada has long recognized that improvements in energy efficiency are good for competitiveness and good for the bottom line. Building on the success of the climate change voluntary challenge, a broader array of Canadian society must be enrolled in enhanced voluntary actions to reduce emissions.


Fourth, the federal government should move quickly to allow Canadian firms to take advantage of market-based instruments, which can achieve environmental goals at lower cost. Tradable emissions permits and joint implementation are permitted by the Kyoto Protocol and Canada should urge the timely development of rules for their operation.


Fifth, the federal government should review current technology policy to ensure that it can better support investments in energy efficiency and the development and adoption of lower emission technologies.


And finally, a serious plan to address climate change requires the involvement of all Canadians. Individuals will have to do much more to conserve energy at home and on the road. And governments should engage in a broader public dialogue on the issue, both to assist Canadians in understanding the risks, uncertainties and opportunities posed by climate change and to ensure support for the tough choices which will have to be made.


The challenge for the federal government after Kyoto will be to convince Canadians that it can follow ambitious goals with sensible action. This requires a realistic and credible plan to devise a responsible Canadian contribution to an international solution, while also protecting our key strategic interests. It undoubtedly is a careful balancing act and one about which all Canadians should be vitally concerned.