Environment Committee on Nov. 28th, 2006

[Bernard Bigras, Bloc, Rosemont—La Petite-Patrie, QC]

On page 2 of your document, you say that:

Canadian industries are currently developing new technologies and fuel sources, but in most cases, it will not be feasible to have them in place by 2012.

If it is not feasible by 2012, when? I have been with the House of Commons since 1997, and we have been talking about climate change since then. We were told that it was not feasible in the short term, and you're saying that it still will not be feasible by 2012, and that we must have short-, medium- and long-term measures.

Do you think that it will be only feasible by 2050?

[Nancy Hughes Anthony]

Not at all, Mr. Bigras. Of course, there has been a lot of progress. I can quote many examples. Let's think of the major challenges. Carbon capture and storage or hybrid vehicles are two things which will have an extraordinary impact on the world situation, and not only in Canada. However, the technology does not exist yet. Can it be encouraged by increasing investment? I say yes, absolutely. However, it is unrealistic to think that this will happen today just because we want it. Even if we want it, some technologies have not yet been developed. They are very promising, but we must be realistic. That's what I wanted to say in my presentation.

[Bernard Bigras, Bloc, Rosemont—La Petite-Patrie, QC]

Mr. Bramley.

[Matthew Bramley]

As far as carbon capture and storage is concerned, the technology is already available. The cost is evaluated at over $30 per tonne of CO2. This means that if the government wanted to immediately begin implementing a regulated system of targets with an emission right trading system for about $30 per tonne of emissions, carbon capture would happen on a wide scale, and all this would begin immediately. This technology is already being applied on a large scale in Norway, in Algeria and in various other places throughout the world. It's already there.

[Bernard Bigras, Bloc, Rosemont—La Petite-Patrie, QC]

Would it not be to the advantage of your industrial sectors to implement this type of system? Are there not industrial groups, such as your association at the Chamber of Commerce, who would have a clear interest in this type of carbon market in Canada?

[The Chair, Conservative, Bob Mills]

I think Mr. Dillon wants to get in too, Mr. Bigras.

[John Dillon]

Thank you, Mr. Bigras.

There are at least a couple of points. First of all, the technology that we're talking about related to carbon capture and storage is being done on a demonstration basis in a couple of places right now. One of the key challenges is not just the capture technology; it's actually building a pipeline that will supply. In the case of the Norwegian project, as I understand it, they have all of that capability within one facility. There are still major technological challenges to getting that up and running on a consistent basis and a widespread basis across Canada. Clearly, as Nancy has said, we need to think about the policies that will stimulate those kinds of technology developments so that it is, but it's not realistic to think all of that can be in place by 2012.

It's not because there's a great argument about not doing it; we've been doing a huge amount over the last few years. The reality is that most of the major energy-consuming things we're talking about, whether it's the consumer or a business, all have very long lives. Consumers don't change when they're making decisions today about building houses, about buying vehicles, about buying appliances. Those things change over 10 to 20 years from now. It's the same issue for industry--we're talking about long-lived capital stock that doesn't change over every year or every couple of years. So we've got to think about a policy that over the longer term will produce these huge reductions, rather than spend a lot of money on very marginal improvements in the short term.

[Bernard Bigras, Bloc, Rosemont—La Petite-Patrie, QC]

I have a final question. I had a question for the round table, but it is not here. The following thing has been mentioned twice, first by the Commissioner for the Environment, and then at the round table. In their opinion, a modern policy on energy and climate change should focus as much on energy use as on energy production. This is basically what Ms. Gélinas said when she pointed out that we cannot really fight climate change without also addressing how energy is produced, used and distributed.

Since energy use, production and distribution happen at the provincial level, don't you think that the best way of fighting climate change is to decentralize powers relating to energy to the provinces, ? Is it not time, while maintaining national greenhouse gas reduction objectives for which Canada certainly bears responsibility at the international level, to move towards greater decentralization, which would more effectively reduce greenhouse gases?

[The Chair, Conservative, Bob Mills]

Who wants to take that one on? It's a tough one.

[Louise Comeau]

Well, I'm not afraid to take it on.

It's difficult, when you've been working on this issue so long, to hear the same things that we've been saying for 15 years. How much capital stock turnover do you think we've had in the last 15 years? It's always portrayed as the future, the future, the future. We've had a huge amount of capital stock turn over, so I would argue that in fact we need to do two things. One is that we have to understand the cost of this issue to this country. That's why adaptation is actually a value. By understanding the cost to this country, we start to understand the social cost and we start to impose regulation that takes us up to that price.

I think if we want to follow a route that looks at the question of establishing caps at a provincial level—that's what we did on acid rain—set your caps and let the provinces go. Establish a national emissions trading system. That's an option for going forward. It may not be the only option, but it's an option.

All I can say is I've heard John's speech and Nancy's speech. I could pull out the previous speeches from 10 years ago or 12 years ago. We really simply need to move now. Capital is turning over every single day. Set your caps, put an emissions trading system in place, a real one, a cap and trade system with no price assurance mechanism, ensure we can link, for liquidity purposes, to other regimes around the world, and let's go.

[The Chair, Conservative, Bob Mills]

John, do you have a comment?

[John Dillon]

I hesitate to wade into the federal-provincial domain, but I don't think there's a simple answer to your question, Mr. Bigras. The reality is that in many respects we do need to decentralize the decision-making down to the individual consumer, as I said earlier, down to the individual municipality, because that's where real progress can be made.

Frankly, all this debate about the federal government responsibility to meet the Kyoto target has taken us away from real discussions about what we're going to do at individual levels, at community levels, and at the level of business.

I worry about a plan that says let's figure out how to divide it up on a provincial basis. That adds a whole layer of complexity and complication that may get us into a debate that's not very helpful either.

[The Chair, Conservative, Bob Mills]

Mr. Cullen.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Thank you, Mr. Chair.

I wish we had this particular panel for another meeting. I'm finding this quite engaging.

A question for Mr. Dillon.

In terms of the responsibilities, you said there's individual, municipal, provincial. I imagine there is corporate responsibility in there as well.

Do you have a policy on the Kyoto Protocol? Is your organization in favour of it? Do you suggest that your companies respect it, that Canada should continue on with it?

[John Dillon]

Since the protocol was negotiated in 1997, we have said that we have serious questions about the achievability of the target. That does not in any way suggest that we are not serious about addressing greenhouse gases. If you look at our policy papers over the years, we have been involved in trying to suggest far-sighted and more innovative ways to get at this issue.

One of the reasons we have always questioned the Kyoto target, as I said earlier, is because we've never really engaged Canadians on what they need to do, what the overall impacts are going to be, what the costs are going to be, and how we're going to meet this ambitious target.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

So looking at reports like the Stern review, there comes a time when we can focus on the costs of achieving something like our Kyoto targets. There's also this unknown cost of potential damage and impacts. And we can walk through the insurance industry, or the forestry sector, the mining sector right now, huge, huge parts of our Canadian economy that are telling us at this committee, and other places in this Parliament, that climate change is affecting their bottom lines in a negative way, substantially so.

I guess my question to you is, is it possible to grow our economy and not grow our greenhouse gas emissions?

[John Dillon]

Yes, I believe it is, over the longer term. Not very easily in the short term, but over the longer term, absolutely. That's what a number of our companies, both here in Canada and internationally, are trying to do.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

So the dynamic that gets presented that our emissions have gone up, but, lo and behold, our economy has grown as well is a bit of a false presentation. The suggestion that if we grow our economy in a certain way, particularly our GDP, if you want to look at the growth in GDP, particularly with the increase in energy, particularly with that increase coming from the oil and gas sector, that is a certain choice of growth. Our government, if you'll allow me this, used every mechanism possible--not every, but most mechanisms possible--to grow the tar sands in Alberta. It was a choice by the federal, provincial, and private sectors to grow that industry from what was a nascent industry 15 years ago to what is an absolute behemoth now. Those were policy choices. Is that true?

[John Dillon]

Yes.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Is it not also possible, then, that using those same mechanisms, that same force of will from all those different levels of government and private sector, we can arrive at a place where our economy can both grow and our greenhouse gas emissions can in fact drop?

[John Dillon]

I think the question is whether we understand what those policy choices are today and whether government always make the right choice.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Have we seen other industrial nations, our competitors in fact, do that?

[John Dillon]

The reality is that our economy, to a significant extent, has been based on the resources we have. We could make choices. We could say we're not going to develop some of those resources, but we'd have to figure out what parts of the economy we are going to use to replace that revenue. As much as we've had policies to support, for instance, the oil sands, or the growth of oil and gas production in this country, those policies have brought enormous employment opportunities and government revenues that we would have to replace somehow.

Let's face it, if we decided not to expand our production of oil sands and not sell that to the United States, some other country, whether it's Algeria, Venezuela, Mexico, or Saudi Arabia will sell that oil and gas to the United States. You have to ask yourself whether the global environment will be better off for that. Canada's GHG emissions may go down, but will the world's GHG emissions go down?

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Ms. Anthony, you talked about the importance of investment and about facilitating broadly effective energy efficiency improvement programs.

Was the cutting of the EnerGuide an intelligent choice, from your organization's point of view?

[Nancy Hughes Anthony]

I can't really comment on how effective that program was, Mr. Cullen.

I think there is a need, though, when we are looking at any sensible plan, to make sure that the consumer understands what their contribution to this plan can and should be.