Kyoto: Six Months on, Government at Serious Risk of Falling Behind

Ottawa, October 13, 2005—Six months after releasing its plan to honour Canada's Kyoto commitment, the federal government urgently needs to implement four key actions to demonstrate Canada is on track to meet its international obligation to cut greenhouse gas emissions, according to the Pembina Institute, one of Canada's leading centres of expertise on climate change policy. The federal Kyoto plan was released on April 13, 2005.

"The government has made good progress in certain areas of its Kyoto plan—formally deciding to add greenhouse gases to the Canadian Environmental Protection Act, for example. But if loopholes and emerging delays in other areas of the plan are not remedied by the end of 2005, Canada will be seriously off-track in meeting its Kyoto emissions target," said Dr. Marlo Raynolds, Executive Director of the Pembina Institute.

According to the Pembina Institute's analysis, the government must take the following actions to strengthen the implementation of the four largest planks of its Kyoto plan:

1. Change the proposed rules for granting "offset" credits to Canadian emission reduction projects to ensure that "business as usual" projects cannot receive credits. If this change is not made, a considerable portion of the government's new Climate Fund—which will be purchasing the credits—will likely be squandered on projects that would have been implemented anyway, without the fund's support.

2. Make a supplementary budget allocation to the plan's Partnership Fund sufficient to allow agreements to be reached, by the end of this year, to implement specific federal-provincial emission reduction initiatives that account for at least one-half of the reductions assigned to the fund. If these initiatives do not begin within a few months, they will not be implemented in time for Canada to begin complying with its Kyoto target in 2008. The fund's current $50 million per year budget is only a fraction of the amount needed for the fund to meet its objectives.

3. Publicly announce and begin implementing a revised package of Climate Change Programs by year's end, using unused Kyoto funds from past Budgets, rather than waiting for the end of the fiscal year. The priority must be given to regulations, such as appliance standards, and major financial incentives, such as environmental tax shifting and "feebates" to encourage more efficient vehicles, as proposed in Budget 2005.

4. Clarify that regulated emission targets for new oilsands facilities—Canada's largest source of rising emissions—will be set significantly below those facilities' planned emission levels. In the plan's Large Final Emitter System, these targets are to be set at "best available technology" levels, but industry would like this to be interpreted as the technology it is actually implementing. Canada's largest source of rising emissions would, as a result, be exempted from any meaningful contribution to Canada's Kyoto effort—unless the government makes a much more stringent interpretation of "best available technology."

"It's critically important that Canada be able to exert international leadership when it chairs the UN climate change negotiations in Montreal in December," said Dr. Matthew Bramley, Director, Climate Change at the Pembina Institute. "That's going to be difficult unless the government takes these actions to significantly strengthen the credibility of its implementation of the Kyoto Protocol."

Under the federal Kyoto plan, Canada's average annual greenhouse gas emissions during 2008-2012 must be reduced by 270 megatonnes (Mt) below business-as-usual levels. The plan assigns 75-115 Mt of reductions to the Climate Fund, 55-85 Mt to the Partnership Fund, 40 Mt to Climate Change Programs, and 36 Mt to the Large Final Emitter System. The Pembina Institute's six-month assessment of the government's progress in implementing its Kyoto plan is based on the Institute's summary and analysis of the plan, which includes a set of timelines for its credible implementation. This background document is available here.

The annual UN climate change negotiations will take place in Montreal between November 28 and December 9. In Montreal, governments will be required to initiate formal discussions on greenhouse gas targets for the period after 2012, when the first round of Kyoto targets expire.

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