Ottawa must avoid U.S. paralysis on climate change
The Canadian Press
Published Tuesday, January 25, 2011 2:10PM EST
OTTAWA - Canada won't even come close to meeting its climate-change targets if it waits for the United States to act, a key federal advisory body warns.
The National Round Table on the Environment and the Economy says it doesn't see anything wrong with harmonizing Canada's emission-reductions targets with American goals.
But to simply mimic U.S. measures -- especially when ideas for policy change are paralyzed by American politics -- will do Canada's economy and environment more harm than good, the Conservative-appointed roundtable says in a comprehensive policy analysis released Tuesday.
President Barack Obama has said he does not expect any major climate-change legislation to pass in the next two years.
"Canada faces some economic competitiveness risks in moving too far ahead of the U.S., but also faces both environmental and economic risks by simply waiting," the panel says in a 160-page report.
"Canada needs to strategically plan for harmonization."
The bare minimum Canada should do is to put a price on carbon so that there are market incentives for companies and consumers to scale back their emissions, the report says.
As a first step, it recommends setting up a national cap-and-trade market that would auction off carbon permits.
Cap-and-trade is an old idea that has never made much headway in Canada, mainly because of fears it would make Canadian businesses uncompetitive, especially in Alberta.
But this proposal comes with a unique twist: a ceiling on the price so that the cost of permits would never rise too far above the price of carbon in the United States.
Plus, the roundtable suggests that the money the government makes from selling permits should be "recycled" back to corporations so that no one sector is disadvantaged.
With such a system in place, Canadian firms will be encouraged to invest in environmentally friendly technology without losing their competitive edge, the roundtable says.
Coupled with a fund that would encourage new research and development, the approach would "walk a middle line" between harmonizing with the United States, limiting competitive risk, and making progress on environmental targets, the report says.
The report is packed with modeling and number crunching showing that current government policy -- measures such as regulations for vehicles and coal-fired electricity -- won't do what it takes. Those measures would only take Canada 13 per cent of the way to meeting its 2020 target.
If the United States does nothing, and Canada sets up a cap-and-trade system that sets the price of carbon at $30 per tonne of carbon, Canada would get two-thirds of the way there, without additional measures.
And if the United States sets a low price on carbon, and Canada sets its price $30 higher, Canada would have a good chance of achieving its target on time, the report says.
"The basic message is, we don't need to wait" for the United States to act, said Clare Demerse, a climate-change specialist at the Pembina Institute.
While the institute would rather see a quicker route to meeting Canada's targets than the one proposed by the roundtable, Demerse says the analysis is thorough, showing that targets can be met without undermining the economy or kowtowing to the United States.
"There is no valid reason to delay here."
But there is little evidence the Conservative government would be open to the proposals of the report, even though they were authored by experts named by the Conservative government, charges Liberal environment critic Gerard Kennedy.
The roundtable report shows that "it's safe and it's prudent and it's smart for us to get our own act together," Kennedy said in an interview. "You're just digging a hole by waiting."
He said it was telling that even business leaders and advisers named by the Conservative government are telling Prime Minister Stephen Harper ever so politely that his environmental policy was inadequate.
Their report adds to a growing pile of evidence that Canada can make its own way in addressing carbon emissions, Kennedy said.
"Garment by garment, the emperor is losing his clothes. I think Mr. Harper is down to his skivvies here," he added.