I'm almost finished here.
What I would say, with respect to the G8 discussion and the previous speaker and other discussions, is that what I'm hearing is that this is a first in the sense of having the United States and other major countries agree that we need a global agreement and that all countries need to be involved. This is not a first. I've been around this for two decades, and in the 1990s we had.... I'd need to go back to look at the records of G7 and G8 meetings, but I am quite convinced that we had governments standing up as a whole in G7 and G8 saying we needed global targets and efforts from greenhouse gas reductions. But I'll drop that.
If I'm to think of how countries—the G8, whoever—are setting targets and then ask, with the area of my expertise, which is how they would achieve those targets, I would point out to your committee, to you, that when you're designing policies to achieve your targets, the atmosphere must have a value. There are three reasons why. One is that fossil fuels are still, and in many cases will remain, a relatively low-cost energy source--and that's likely for at least a century--compared to renewables and nuclear. Second, it's cheaper to use fossil fuels without capturing the carbon dioxide. Therefore, thirdly, in a free market economy, innovations and new products and services will look to burn these fuels and use the atmosphere as a repository for the CO2 unless you have policies that explicitly prevent that. The policies to prevent that have to put a charge or a regulated cap on emissions into the atmosphere.
So the second part is a policy lesson when you're trying to hit these targets—G8 or otherwise—and that is that subsidies are not nearly as effective as they appear. It looks like you're giving someone $50 for an efficient fridge and that therefore energy use from fridges will fall in that particular household. The evidence that we now know from two decades of analysis contradicts that. It says that we measure efficiency by per cubic metre of the fridge, for example, and yet fridges are getting larger. The service of refrigeration involves the innovation of new products such as desktop fridges, wine coolers, water coolers, a basement fridge, and so on. So these kinds of subsidy policies without a price on the atmosphere cannot get you there.
The only final point I want to make is that I work in this area and have worked here for two decades. The world energy assessment, which is developed by the International Energy Agency, the World Energy Council, and various programs of the United Nations, came out in the year 2000 with a significant section on policy. The new global energy assessment will come out in 2010. In the last year I was appointed as the head person for policy analysis in that process, and so I'm assembling a team of the top people internationally on policy design. Quite frankly, the message I just gave you about policy use and policy failures is held universally by these leading independent experts. These are academics who advise governments or leading industry people who are in the research end of this.
So what I did just recently—and I'll close now—is simulate the policies in Canada to see if they would achieve the targets we were looking at, and the results are there for anyone to see. I did not find that they did.
So I'll complete my comments there and stand open for questions.