Globe editorial | Targets set without a plan, and costs that are perilous

Globe editorial | Targets set without a plan, and costs that are perilous

Climate Action Day 20091024

A protester holds up a sign during a climate-change demonstration on Parliament Hill in Ottawa on Saturday, Oct 24, 2009. The Canadian Press

A comprehensive climate-change analysis for Canada released today sharpens the focus on a question the federal government has been loath to answer. What is its plan?

From Thursday’s Globe and Mail Published on Wednesday, Oct. 28, 2009 11:36PM EDT Last updated on Friday, Oct. 30, 2009 3:12AM EDT

A comprehensive climate-change analysis for Canada released today attempts to fill a vacuum of inaction. It is the wrong approach; its all-out attack on the oil and gas sector is politically and economically unacceptable, and would euthanize a vital Canadian industry. But it sharpens the focus on a question the federal government has been loath to answer. What is its plan? Does it have alternatives that are achievable, and that can demonstrably meet its greenhouse gas emission targets? If not, it is time for the government to come out and say so.

The Pembina Institute and the David Suzuki Foundation study, sponsored by TD Bank, outlines policies that would reduce Canada’s greenhouse gas emissions by 20 per cent from 2006 levels as of 2020 (this is the federal government’s target), and reduce emissions by 25 per cent from 1990 levels in 2020 (the United Nations-sanctioned target requested of all developed countries to keep the growth in world temperatures to 2 degrees Celsius). Remarkably, the economic consequences of a deeper emissions cut (2.1-per-cent annual GDP growth) are just a shade under the consequences of a smaller cut (2.2 per cent), and not far from GDP growth if there is no new policy (2.4 per cent). This is good news, to the extent that economic growth years hence can be predicted at all. But the gulf is elsewhere, in the transformative changes the study says are needed to meet the government’s target.

The recommendations are radical: capturing methane emissions from almost all landfills; effectively banning new nuclear power construction; California-level fuel efficiency standards for vehicles; and, to meet the UN emissions reduction target, the study says carbon capture and storage, an unproven technology, ought to be made mandatory for new oil and gas developments.

Not that there would be many. The study assumes a price on carbon emissions, through either a carbon tax or a cap-and-trade system, something the government acknowledges will be necessary. But it sets that price at $40 per tonne in 2011, rising to $100 per tonne in 2020. This is far above the estimated $15-$26 (U.S.) target price until 2020 emerging from a major U.S. congressional proposal, the Waxman-Markey bill.

And what is the estimated impact on the oil patch, from this and other changes? A 16- to 26-per-cent reduction in gas extraction, and an 18- to 19-per-cent reduction in petroleum refining in 2020, compared with 2005. Albertans and Alberta companies would pay $15- to $24-billion annually in 2020. The industry would be devastated, and so too would Alberta’s economy (and, to a lesser extent, Saskatchewan’s). This is unacceptable.

There are echoes of Stéphane Dion’s Green Shift, as the analysis proposes to return almost half of the carbon revenues through income tax reductions, and direct energy rebates to households, especially in Alberta and Saskatchewan. These measures would lessen the regional pain, but the study acknowledges that what is proposed is no less than an economic upheaval: “There is a migration of capital and labour out of carbon and trade exposed sectors (e.g., fossil fuels) to sectors that are less carbon and trade exposed (e.g., manufacturing, services and renewable electricity).”

Canada cannot take its national unity for granted and must not, in the service of international obligations, allow itself to be immolated by a government policy of such wrenching dislocation.

There’s one other idea of limited palatability. The purchase of emissions credits overseas accounts for around one-fifth of the reductions under the analysis, on the premise that a reduction in greenhouse gas anywhere in the world is desirable. (Climate-change legislation currently before the U.S. Congress involves a similar scheme.) But there has been little political ground laid for this transfer of wealth from Canada to poorer countries.

The gauntlet has been thrown down. No politician who wants a chance to govern Canada would dare pick it up. So where does that leave us? The federal government clings to its “20 per cent by 2020” target, but has been reluctant to release any updated plan on how to get there. Certainly, it has failed to release the kind of extensive costing and number-crunching that was done by the Pembina Institute and David Suzuki Foundation and ought to stand as the minimum level of policy engagement on such a complicated question. In this respect, its behaviour is alarmingly similar to that of the federal Liberals, whose inaction on Kyoto it understandably derides to this day.

The federal government pledges co-ordinated action with the United States, but it has yet to respond to the many American moves in recent months. The Environmental Protection Agency has issued rules requiring 14,000 large emitters to get operating permits and prove that they have the best available anti-emission technologies. Two major climate-change bills that would establish a cap-and-trade system are now before the U.S. House and Senate. A national low-carbon fuel standard for automobiles that could disqualify products from the Canadian oil sands may be in the offing.

There may still be some low-hanging fruit, in energy efficiency and clean technology, to help Canada reduce greenhouse gas emissions. Canadians may be ready, if reluctantly, to feel some pain in the move to a lower carbon future. But there is no silver bullet; voters rejected the Green Shift in the last federal election, and the Pembina Institute/David Suzuki Foundation analysis is unsaleable and dangerous.

With the Copenhagen climate-change conference less than six weeks away, we stand at a critical juncture. There are two paths.

The federal government must present a policy package that will show, and not just tell, how Canada will meet its stated and international obligations to mitigate the effects of climate change.

Or the target may be unreachable without unacceptable damage to Canada’s economy and national unity. In which case, it is time for new targets, and new policies.


~ by Cory Morningstar on October 30, 2009.

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