We'd just come off two large successes in the environmental field, particularly on acid rain. Through a very innovative emissions trading program out of the Environmental Protection Agency, costs were less than 10% of what was originally estimated. Secondly, there was the ozone treaty itself. It said that a clear guidance or cap—and this was the lesson from the sulphur dioxide emissions—would provide the appropriate policy environment for assigning value to that carbon. You would be able to put a price on the carbon and find the most cost-effective means of reaching your target.
What we had envisaged in Kyoto was bringing those lessons forward for carbon dioxide. It needs to be appreciated that the lead negotiator for ozone was Eileen Claussen, who under Vice-President Gore had become the lead negotiator in the State Department for carbon dioxide. So these kinds of lessons were much to the fore at that time.
The second thing that needs to be taken into account is that we were all very aware of the issue of capital stock turnover. It takes time. One of the ideas behind the emissions trading mechanisms was that it would be a bit of a bridge. Gordon Lambert, from Suncor, very eloquently explains that it's often sort of a timing mechanism that allows you to make the capital stock turnover while achieving significant emission reductions.
It was intended as a way to send out a signal for some significant targets. That was the only reason the United States and Canada agreed to targets of minus seven and minus six. We sent a signal that we were serious and intended to ramp this target up over time, but that we would meanwhile provide a cost-effective means of defraying these costs on the capital stock side during the transition.
The longer we wait in putting together a strong domestic plan and making reductions, the more we're going to have to rely on the international purchases. I would argue that this has become a bit distorted. I'm not sure if it's 20 billion, as Jay has said, but it's probably 10-billion-plus, in respect of the international credit of some purchases we would have to make to comply with Kyoto. Is that what was envisaged? To be absolutely honest, no. There was a balance there.
You raised a very interesting question about Holland. I'm first-generation Dutch. My parents, God rest their souls, both came from Holland. One thing I can tell you that the Dutch don't do is throw money away. Right off at Kyoto they made it clear that in achieving their targets, half would be through international investments and half through domestic ones. They realize that in participating in these carbon markets they are sending out a strong investment profile signal. We are looking into a century that will be, one way or another, carbon constrained. They think that this provides them a leading-edge opportunity to take advantage of that market.