Environment Committee on May 16th, 2007

[Alex Manson, Special Advisor, Climate Change Policy, Strategic Policy Branch, Department of the Environment]

Yes, Canada, under the Kyoto Protocol, will have access to CDM credits.

[David McGuinty, Liberal, Ottawa South, ON]

I understand, under Mr. Baird's plan, each and every LFE is only allowed to access or purchase 10% of its required reductions under this mechanism. Is that right?

[Cécile Cléroux]

Yes.

[David McGuinty, Liberal, Ottawa South, ON]

Okay.

Since CDMs are based on absolute emission reductions, when these credits are factored into each firm's required reporting, are they credited based on an intensity-based regime or as the plan dictates until 2015?

[Mike Beale]

The allocation of the CDM credit, the access to the CDM credit, would be based on the absolute emissions gap that any individual firm has after application of the intensity target. Remember, at the end of the day, a tonne is a tonne, whether that tonne results from an intensity target or from a—

[David McGuinty, Liberal, Ottawa South, ON]

I have a half a minute left.

Can you name another country that is participating in the CDM that is using intensity-based targets?

[Mike Beale]

No, I don't believe there are any other countries—

[David McGuinty, Liberal, Ottawa South, ON]

So Canada is the only country, to your knowledge, that is participating ostensibly under the Kyoto Protocol CDM mechanism but using intensity-based targets?

[Mike Beale]

That's right.

[David McGuinty, Liberal, Ottawa South, ON]

Thank you.

[The Chair, Conservative, Bob Mills]

Thank you.

Mr. Bigras.

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

Thank you very much, Mr. Chairman.

Thank you for coming to explain, in greater depth, the climate change action plan. Before discussing the actual plan, I would like to go back to the notice of intent you referred to on page 2. I would like to know what was the benchmark year used in this notice of intent that you submitted to us on October 21, 2006.

[The Chair, Conservative, Bob Mills]

The microphones come on automatically.

[Cécile Cléroux]

So don't touch them. Okay.

No benchmark year was mentioned in the notice of intent published on October 21, 2006.

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

And the year 2003, which was supposed to be a benchmark year, wasn't it one?

[Cécile Cléroux]

We referred to a target reduction on anywhere from 45% to 65% from 2003 levels, but only for 2050. No mention was made of the benchmark year in the notice of intent for the regulations to come.

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

Why did you indicate 2003 as the benchmark year for 2050, but when you talked about the reduction of emission intensity, you mentioned 2006?

[Cécile Cléroux]

Since the regulatory framework was published on April 26 last, all benchmark targets, including those for 2050, are based on the benchmark year of 2006. Further to consultations held between October and April, the new target for 2050 was adjusted. The target is now set at 60% to 70% of 2006 levels by 2050.

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

Do you feel that, by adopting 2006 as the benchmark year, we recognize past efforts made by business?

[Cécile Cléroux]

In order to recognize the past efforts made by business, there is a provision enabling these companies to get credit for early action. An envelope of 15 megatons will be available for those companies that exceeded objectives in this field. We have a process that will enable us to recognize all businesses that have achieved verifiable reductions, so that they can obtain credits. These credits will be tradeable.

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

If you want to recognize the past efforts made by businesses, why not set a cap of 15 megatons rather than recognize the total reduction of greenhouse gases? Does that mean that you do not want to acknowledge of the past efforts made? It's as if you are telling a citizen who has a waste recycling plan that one recycling box will count but another one will not.

[Cécile Cléroux]

The government weighted various arguments and felt that an envelope of 15 megatons was adequate recognition of past efforts.

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

What are these arguments?

[Cécile Cléroux]

Various groups and businesses submitted arguments and comments to the government. The government decided to set this envelope at 15 megatons.

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

What arguments convinced you to make this decision?