It is clause 10. I'm sharing the importance of having targets that are realistic and that are achievable. The difficulty we've had with Bill C-377 is that there are targets that haven't been costed.
We've asked Mr. Cullen if he would accept a motion, but we haven't made a motion. I was just testing the waters: would he accept having it costed, as recommended by the witnesses? The instructions he has from his leader now are not to have that, which is disappointing. The Commissioner of the Environment advised that there be an analysis. This is what we heard from every witness group. Of course, the NDP, after introducing the bill and recommending that it be costed, is now suggesting that they don't want Parliament to be making a decision based on facts; they want emotional targets.
We agree that we need to set the toughest targets in Canadian history, and we have done that. Our Turning the Corner plan does that. It builds on intensity targets, and within a very short period of time, by 2012, we have absolute reductions coming. By 2020 we'll have absolute reductions of 20%, again the toughest in Canadian history.
We heard from the witnesses previously that intensity isn't bad; what's important is how tough those intensity targets are. Of course, they are mandatory, concrete intensity targets that will result in absolute reductions, which is good news for Canada and good news for the world. The targets will also make a vital contribution to the government's commitment to reduce the national absolute greenhouse gases by 20% by 2020.
The government is introducing the toughest action in greenhouse gases ever proposed by a Canadian government. The government's emission intensity targets are 6% more stringent, at 18%, than the emission intensity targets proposed on July 16, 2005, at only 12%. Unlike the 2005 proposal, our Turning the Corner plan also requires annual improvements in emission intensity of 2%, meaning that by 2015, a 26% emission intensity improvement will be required under this plan. It's huge.
Short-term mandatory reductions in greenhouse gas emissions by sector are defined in terms of reductions in emission intensity from their emission intensity in 2006. That's the base year.
Each country has its own unique circumstances. Globally, everybody needs to reduce greenhouse gas emissions, as we all agree, hopefully; some may not. The reality is that everybody has to do their part globally or greenhouse gas emissions will continue to rise. We need to get all the major emitters, including the United States, India, and China, reducing their emissions too.
Greenhouse gas emissions per unit of production are capped under our plan. We don't hear any details in Bill C-377. It's unfortunately missing any details. We heard that from the witnesses. All they are, are targets, with no idea how they are going to be achieved. The NDP leader, Mr. Layton, equated it to building a railway, with no idea how he was going to do it, but he had a dream.
Our plan, the plan, which will be effective and is already being effective in reducing greenhouse gas emissions, has the units of production capped. The regulatory release limit for individual facilities within a given sector that will be needed to achieve this overall percentage reduction will be determined as part of the process to develop the detailed regulations.
The emission intensity approach ties targets to production. This means that firms will not be able to claim emission reduction credits by shutting down production for environmental reasons or obtain credits for moving production out of Canada. Rather, credits can only be earned through cleaner production. More importantly, these rigorous targets will yield absolute reductions, even as the economy grows. As the World Resources Institute noted in a 2006 report, “For environmental performance, what matters overall is that targets are set at reasonably stringent levels and subsequently are met. This may be achieved with absolute or intensity targets.”
Again, this is what we see missing in Bill C-377--no details, no direction, no substance on how their targets can be achieved, no costing, and no impact analysis.
The approach for determining the emission intensity targets for each sector in the Turning the Corner plan is based on an improvement of 6% each year from 2007 to 2010. This yields an initial required reduction of 18% from 2006 levels in 2010, the year the proposed greenhouse gas regulations would come into full force. Every year thereafter, a 2% continuous improvement on emission intensity would be required. By 2015, therefore, a reduction in emission intensity of 26% from 2006 levels would be mandated. This basic approach will be applied to existing facilities in each industrial sector.
The 18% emission intensity reduction calculation applies only to combustion and non-fixed-process emissions. Regulatory release limits per unit of output for existing facilities would reflect this.
Predefined fixed-process emissions would have a zero percent reduction in emission intensity from 2006 levels in 2010. Fixed-process emissions are emissions tied to production for which there is no alternative reduction technology. The only way to reduce these emissions is to reduce production. Processes that are currently considered fixed may not be considered fixed in the future if technologies or processes are developed that could reduce or capture and store the emissions. At the sectoral level, the share of total emissions that are fixed-process emissions varies. For each sector, the basic approach will be an 18% reduction from the 2006 levels in 2010, with continuous improvement in emission intensity thereafter.
Fixed-process emissions will have to be determined on the basis of the characteristics of firms and sectors. To provide sufficient time for the facilities to reach normal operating levels, new facilities will be granted a three-year grace period before they have to meet an emission intensity reduction target. After the third year, the initial greenhouse gas emission intensity target will be based on cleaner fuel standards. New facilities will also be required to improve their emission intensity by 2% each year, as do existing facilities. New facilities are defined as those whose first year of operation is 2004 or later.
The three-year grace period means that no improvements are expected in the first three years of operation, and no target will apply during these years. Targets begin to apply in the fourth year of operation, even if that year is before 2010. For example, a facility that began operation in 2005 will begin to face a target in 2008, based on its emission intensity performance in 2007 and on the application of the cleaner fuel standard. A flexible approach to implementation will be taken in those special cases where the equipment used in a plant facilitates carbon capture and storage or another technology offering significant potential for emission reductions.
The approach I've just described is the one that will be applicable across the full range of industrial sectors. Specific sectoral issues will be considered in developing the regulations, but all resulting emission reductions must be equivalent to those resulting from the general approach.
The continuous improvement of 2% in a sector's emission intensity would be applied through 2020. As I noted, there would be a review of the regulatory framework, including targets, every five years. The first review would take place in 2012. This is what's missing in--