The Kyoto climate protection agreement can be implemented without significant impacts on the Canadian economy. The federal government must now ratify the Kyoto agreement and define options that are effective in achieving long-term emission reductions, and are equitable.
The climate is changing. And without concerted international action to reduce greenhouse gas emissions, climate change will accelerate through the next century. To avoid catastrophic climate change, global emission reductions of over 50% are needed. The Kyoto Protocol is the first, albeit small, step in that direction. It commits the globe’s largest polluters to reduce their emissions of greenhouse gases.
Since the negotiation of the Protocol in 1997 Canadian governments and stakeholders have been debating whether the government should ratify the Protocol. This process culminated recently in the May 2002 federal government release of Canada’s Contribution to Addressing Climate Change (the “Federal Options Paper”), a discussion paper that outlines 4 options for implementing the Kyoto Protocol, and reports the results of economic modelling of two of those options. The economic modelling was guided
by the Analysis and Modelling Group (“AMG”) – a group of representing all provinces, including Alberta, and the federal government. Despite alarmist predictions from large polluters and the government of Alberta, this balanced economic analysis showed that there are realistic ways of implementing the Kyoto Protocol that will benefit the Canadian economy, with all provinces and sectors growing at close to business as usual rates. The options identified were:
- A system where Canadian emissions from fossil fuel combustion are capped, with permits toimport or produce fossil fuels auctioned by the federal government or purchased from the international market by fossil fuel producers. This emissions trading system is combined with targeted measures that help reduce emissions at low cost (e.g. energy efficiency standards).
- Reliance solely on targeted emission reduction measures.
- A system of emissions trading that only applies to large polluters, combined with some targeted measures. Under this system, emission permits are provided to polluters at no cost, depending on the polluter’s output.
- As in Option 3, but Canadian emissions are allowed to increase by 70 million tonnes based on so-called “Clean Energy Export Credits”. The basis for free allocation of permits and choosing targeted measures are also slightly different.
Subsequent to the release of the Federal Options Paper, the Alberta government released a proposal called Albertans and Climate Change: a Plan for Action (the “Alberta Plan”). The Alberta Plan rejects the Kyoto Protocol and instead proposes a program of negotiated agreements with industry, research, and government action to reduce emissions intensity by 2020.
This paper is a response to the Federal Options Paper and the Alberta Plan and makes a series of findings and recommendations in regard to how Canada should address climate change and implement the Kyoto Protocol.