This week the federal government released its long-awaited "Plan to Honour our Kyoto Commitment." On February 16, when the Kyoto Protocol became international law, that commitment became a legal obligation. But will the government's new Kyoto plan actually result in Canada meeting its Kyoto obligation to cut greenhouse gas emissions?
Canada's target is for emissions during 2008-12 to be cut to 6% below the level they were at in 1990. Years of inaction have now resulted in our emissions rising to 24% above the 1990 level. This makes reaching our target a major challenge. It can still be met, but only through the urgent implementation of adequate mandatory targets, strong financial incentives and major infrastructure investments.
The plan released this week fails dismally on the first of these benchmarks. Heavy industry — including oil and gas production, electricity generation and other energy-intensive operations — is responsible for close to 50% of Canada's emissions. But mandatory emission reductions by heavy industry make up just 13% of the plan. This places an unfair and likely unmanageable burden on the government to secure taxpayer-financed emission reductions elsewhere.
The weakness of the targets proposed for industry cannot be justified on economic grounds. The plan requires a total emissions reduction of 36 megatonnes from heavy industry. But even an industry research association, the Petroleum Technology Alliance Canada, believes there are 29 megatonnes of profitable emission reduction opportunities in Canada's oil and gas sector alone. The scaremongering about Kyoto's economic impacts is simply not based on facts.
Even if oil producers could make not reduce emissions profitably, industry sources acknowledge the maximum cost of meeting their targets by buying credits would be 25 cents per barrel. When oil is selling for over $US50 per barrel, this is an economically insignificant contribution to Canada's Kyoto effort.
The government's plan tries to make up for the inadequate industry targets with financial incentives, including two new multi-billion dollar funds, financed by taxpayers. The Climate Fund will "purchase" tonnes of emission reductions by financing projects both in Canada and internationally. If well implemented, this is a good mechanism. Contrary to the rhetoric about "hot air," investing in foreign projects is a legitimate part of Canada's Kyoto plan if the projects genuinely reduce emissions.
Unfortunately the plan provides few grounds for confidence that the Climate Fund will begin operating urgently enough. Projects have significant lead times and need to be initiated very soon to ensure they will be delivering emission reductions by 2008.
The plan's Partnership Fund will finance megaprojects undertaken jointly with provinces. It will also need to be used to persuade provincial governments to improve regulations in areas of provincial jurisdiction, like energy efficiency codes for buildings and mandates to produce green electricity. But the plan's description of the Fund lacks the timelines and detail to ensure that the promised emission reductions will be delivered on time.
The Government of Canada produced three climate change action plans between 1995 and 2002. Each one failed either because it relied on ineffective voluntary measures or because it was not implemented sufficiently. Given this track record, we can only approach this week's plan with a healthy dose of scepticism. The onus is on the government to convince us of the credibility of its new plan.
Unfortunately the plan's credibility is, in our view, stretched beyond breaking point through its desperately weak targets for industry, and its lack of implementation timelines and detail on where emission reductions will come from.
To restore its credibility on Kyoto to Canadians and to other signatories of the Kyoto Protocol, the government must, first and foremost, significantly strengthen the industry targets. It must also announce timelines and interim targets for each section of the plan, and establish accountability mechanisms that ensure progress can be continuously evaluated.
Finally, the government's credibility of Kyoto depends as much on the urgency with which it implements its plan as on the plan itself. Given that Canada's Kyoto target will begin to apply in less than three years' time, it is essential that major implementation steps be taken in all areas of the plan during 2005.
In seven months, governments from around the world will meet in Montreal for the first meeting of Parties to the Kyoto Protocol. Canada's performance in addressing climate change will be under a powerful international spotlight. To avoid facing a major embarrassment at that meeting, and to allow Canadians to take pride in our efforts to address this major global challenge, the government of Canada must fix the serious flaws in its Kyoto plan.
