Environment Committee on Feb. 4th, 2008

[The Chair, Conservative, Bob Mills]

I would like to call the meeting to order and welcome our guests. Thank you very much for appearing.

I would like to remind members that this is an environmental panel and that we're looking at the scope of the bill, greenhouse gas reductions and targets, and that should be the main emphasis of our questioning and of our presentations to deal with the environmental aspects of Bill C-377.

I would like to welcome you. We'll go in the order that you appear on our agenda. I would ask you to take approximately 10 minutes and then we will have the maximum time for our MPs to ask questions.

I would like to report to the members as well that we have had acceptance from Mr. Johnson and Mr. Morton to appear on February 27 for our other look at Bali. Ms. Simon is in Finland and Ms. Dowdeswell is in Vienna, so they would not be available on that date. My suggestion is that we go ahead. We have two people, and I think we're going to constantly have date problems. With your permission, we will send a letter confirming that with them, and we'll ask them to appear on February 27.

We'll start with Mr. Marshall for 10 minutes.

[Dale Marshall, Analyst, Climate Change Policy, David Suzuki Foundation]

Thank you, Mr. Chair, and thank you to the committee for inviting me. My name is Dale Marshall. I'm with the David Suzuki Foundation.

First of all, again, thank you for inviting me to speak to you today. I'm here to express my support for Bill C-377. This important bill seeks to write into law the science-based targets that are needed to ensure that Canada takes full responsibility for avoiding dangerous climate change.

If you will, allow me to go back to 1992. Canada and the world signed the UN Framework Convention on Climate Change. The ultimate objective of that convention was to avoid dangerous climate change. Of course, that begs the question, what does “dangerous” mean?

Over a decade ago the EU set two degrees as a threshold for dangerous climate change, two degrees Celsius of average global warming compared to pre-industrial levels. This limit now has widespread support from countries and scientists, including most recently the Bali Climate Declaration by Scientists.

Canada seems to be coming around on the issue of two degrees after, frankly, having ignored it for a long time. A document released by Foreign Affairs Canada concluded that setting the two-degree limit has been beneficial to the EU because it's allowed its 27 member states to, and I quote here, “focus policy development”. In the House of Commons in December 2007, Canada's environment minister, John Baird, stated that a rise of two degrees Celsius is unacceptable.

So the logical extension of the minister's opinion on this is that Canada now needs to set limits to ensure that greenhouse gas emissions don't rise to a level that would allow two degrees Celsius and for Canada to do its fair share in keeping the planet within that limit of warming. That's what this bill does.

The Intergovernmental Panel on Climate Change has found that to have a reasonable chance of limiting warming to two degrees, developed countries would have to reduce their greenhouse gas emissions by 25% to 40% below 1990 levels by 2020 and by 80% to 95% below 1990 levels by 2050. I'll note that the targets that are set in Bill C-377 are in those ranges but are at the lowest end of those ranges.

Those targets are also the ones that were proposed by the David Suzuki Foundation and the Pembina Institute in our report from two years ago, “The Case for Deep Reductions”, based on what the science was saying about two degrees and based on Canada doing its fair share with respect to avoiding that limit.

Of course, these targets would also put Canada in line with the UN process and the international community. The IPCC target range of 25% to 40% is also one that Kyoto parties, including Canada and about 160 other countries, agreed to consider, both in Vienna and then again in Bali.

So there seems to be convergence, both in Canada and internationally, on the measures in this bill, both the two-degree limit and the greenhouse gas targets.

The next question becomes how Canada reaches those targets, and there's every reason to believe that Canada can meet these with very little or no economic disruption. The economic modelling work done by the National Round Table on the Environment and the Economy shows that Canada can reduce its emissions by 65% in the next 43 years by foregoing about one year of economic growth. So even with existing technology, we could spend one year of our future growth in the next 43 in order to reach the government's targets.

Now, the government's targets aren't the targets in this bill. The NRTEE's work did not consider 80% and did not use the 1990 baseline. It used the targets that the government set. But the report did state that further emission reductions are possible at slightly higher economic costs, and again, referring back to the IPCC, found that globally we could stay within two degrees Celsius with approximately two years of foregone economic growth in the next half century.

The David Suzuki Foundation has also commissioned some economic modelling to look at the medium-term target of 2020. Unfortunately, that report has not been released. It will be released three weeks from today. But let me share with you some of the findings.

It showed that Canada could get 80% of the way to the 2020 target that is laid out in the bill merely by applying a sufficiently high carbon price through either a tax or a cap and trade system. This, of course, does not include additional measures that could be taken, like regulations on energy efficiency for equipment and appliances, regulations on vehicle fuel efficiency, and stronger building codes for energy efficiency.

So what would be the macroeconomic price of this? Canada would forego 1% of GDP—about half a year's growth—between now and 2020 and join the global fight against climate change. In other words, between now and 2020, the Canadian economy would grow by 26% instead of 27%, while reducing our greenhouse gas emissions to well below what the government has laid out in its 2020 target.

By the way, all these findings are very consistent with international studies that have shown that where emission reductions have happened, they've happened at very low economic cost and they're consistent with economic projections for future emission reductions. Jurisdictions like Norway, the U.K., and California have all modelled the kinds of emission reductions that are found in this: 80% reductions. Norway has a target of 100% emission reductions by 2030. In other words, Norway is planning on being carbon neutral within a generation. Norway presents an interesting example because it is a country that has the same characteristics as our country, and those characteristics are supposedly barriers to Canada getting really serious on climate change. Norway, like Canada, is a northern country. It has a very small population compared to its land base. It's an oil and gas exporter, yet it is planning on being carbon neutral by 2030.

My point is that the costs of tackling climate change head-on are important, obviously, but so are the costs of not acting, or not acting fast enough, to limit warming to two degrees Celsius or below. The global costs of passing the two degrees threshold are unacceptably high--for people, our economies, and for the natural ecosystems we depend upon.

The most comprehensive economic report on climate change, the Stern review, found that the impacts of climate change, if we don't act, will be five to twenty times greater than if we do. Stern calls serious action on climate change the “pro-growth strategy” for the future. So the world must act on climate change, and Canada has to do its fair share. This act is an important step in ensuring that Canada does exactly that.

Thank you for your attention. Merci bien.

[The Chair, Conservative, Bob Mills]

Thank you very much, Mr. Marshall.

Mr. Ogilvie, please.

[Kenneth Ogilvie, Executive Director, Pollution Probe]

I'll try not to repeat and will focus a little more on the solutions, but not in any great depth.

Dale pretty well said what I would want to say about the fact that the threat of global climate change is real and the cost of inaction is great. We have good references for all of these. I did make a submission and I've provided references, so I don't really want to get into detail on that.

The reason we need to think about supporting a bill such as Bill C-377 is that Canada has failed to take aggressive policy measures to control greenhouse gases in line with some of the leaders around the world. We all know the European Union is setting aggressive targets. We know that some states like California are moving, as are some provinces in Canada. We need to be with the leaders on this, in my opinion.

Also, industry has been calling for stable policy direction. Different numbers occur in different people's minds, but we're talking about the Canadian Council of Chief Executives, or, internationally, something called the three-C group, Combat Climate Change. It has four Canadian multinational companies represented on it. They're saying that we need to set targets.

The three-C group, in particular, endorsed the 80% by 2050 target. They're less resolute about exactly what can be accomplished by 2020 or 2030, but they believe we have to go with the science, set the long-term targets, and then set some short-term goals to get there. So industry is calling for stable policy direction.

And the public is concerned. We've seen various polls and so on about where the public is at.

I think the argument for a bill that requires us to move forward is pretty clear, because in the absence of it, we're not going to move forward. We're going to just keep fighting over what we can't do as opposed to what we can. I think the rationale is strong.

The question then, of course, is this. How do we get there and what do we do? We do have lots of studies showing the different ways in which we might get there. I know it's been a question more of equity and more of fairness as to how one gets there, as opposed to the fact that there are technologies and ways to get there.

I'd like to segment things very simply into infrastructure, technology, and prices, which I think are the three huge drivers of progress. If we don't invest in infrastructure, and the right infrastructure, it lasts a long time. We have to do that. If we don't push technologies to be consistent with climate change goals and with that infrastructure, then we're going to be locking in the wrong technologies. Of course, we all know that prices, especially in a market economy, are what move both individuals and companies.

On infrastructure, it's very clear that we have to think very, very large-scale about roads, rail, air, public transit, water and sewage, electricity, pipelines. These are infrastructure. A lot of that is paid for by public money, one way or the other, so politicians have a great deal of influence through planning processes, budget processes, and so on to shape the way that goes. We need a vision of where that has to be in 2050, and that vision has to tie into some notion of the hard numbers we have to achieve.

On the technology side, again, governments have a great deal of influence, both through the infrastructure that's put in place and the technology that has to match to it, but also in terms of regulations and other incentives. Industry is very largely a technology developer and has to feed into something that provides a return on investment and so on. We need the technology. It has to be very much a society-wide effort, with industry fully involved to develop the technologies we need, and we need prices that help make all of that fit together.

All three of these things interrelate, so as the national round table put it, without an economy-wide price signal, we're going to have trouble convincing consumers to be part of the solution. Without signals through either emissions trading or taxes and other mechanisms, we're going to have a hard time making the business case for business.

I think it's all a package and can't be seen as one or the other. I don't think we get there just simply by putting a price on the system. I don't think we get there simply by incenting technologies and hoping they'll get applied. I don't think we get there just by building one form of infrastructure and letting the rest of the system fall in place.

All of that requires a great deal of vision--ideally, a great deal of cooperation. That would be the best way to get forward, particularly in a country like Canada with its various economies and different circumstances. We need to look toward the leaders in the world as to how far and how fast they're going, and how far and how fast they're committed to go.

We do need a national vision.

I was reading in the Globe and Mail about the carbon capture storage report that's just come out. It's asking for $2 billion for initial work on carbon capture and storage. The second part of the bill wasn't even disclosed, but it could be quite a bit more. So why don't we have something of that scale and more on energy efficiency in renewables? We need that scale and much more on urban form and infrastructure, and recapitalizing the electricity grid to tap into the two technologies that will get us to the 80% reductions.

Why aren't we retooling our auto sector so that it's more vibrant and building the right kinds of efficient vehicles, rather than a sector that's trying to hold onto building the wrong kinds of vehicles that will eventually go the way of the dinosaur, taking our economy with it if we're not careful?

In closing, I think we need a bill that makes it very clear to industry, the public, and everybody that we have a long-term target and we are going to require plans to get there. We need a vision of what we're going to do with these big policy levers of infrastructure, technology, and prices in a whole pile of areas. We need investment across the board in a kind of recapitalization of the Canadian economy and social structures so that we have the kind of future that I think is totally there for us. There are tremendous hurdles along the way, but I think it's there if we set out to do it. I encourage you to consider that in your deliberations.

Thank you.

[The Chair, Conservative, Bob Mills]

Good. Thank you very much, Mr. Ogilvie.

Ms. Langer, please.

[Julia Langer, Director, Global Threats, Conservation, World Wildlife Fund Canada]

Thank you, Mr. Chair and committee members. Thank you for the invitation.

My name is Julia Langer. I'm director of the climate change program at World Wildlife Fund Canada.

World Wildlife Fund's mission is to build a future in which humans can live in harmony with nature. We work at conserving the world's biological diversity, ensuring that renewable resources are used sustainably, and promoting the reduction of pollution and wasteful consumption. But our 40 years of work in Canada to protect and manage and restore biodiversity could well be for naught if we don't avert the über-threat posed by global warming and climate chaos. It is with this perspective in mind that WWF is speaking in favour of Bill C-377.

We feel that Bill C-377 reflects the science, and the science calls for immediate action to achieve deep reductions. The reduction targets outlined by the Intergovernmental Panel on Climate Change are not arbitrary; they reflect the work of thousands of scientists over many, many years. They tell us we must reduce global warming pollution by at least 25% by 2020 and 80% by mid-century against the internationally referenced baseline of 1990. I am repeating and endorsing what Mr. Marshall has said. That is our reference point. There is no other way to look at this picture. I would also note that it means “at least”, because these are the bottom end of targets that are considered appropriate for industrialized countries like Canada.

Calling global warming a “hypothesis”, as the Prime Minister did less than four years ago, is now considered irrational. Governments of all political stripes around the world, including ours, are starting to reflect climate change science in policy. But accepting the science is only the first step. It is absolutely necessary and appropriate at this stage of the game to entrench targets and implementation requirements in law, because the current government's approach is a public relations ploy. It has to be brought into a management system.

I say it's a ploy because it's out of line with the science by virtue of having moved the baseline. It is ineffective because emissions will continue to explode--with more pronouncements than actions so far--and it's provoking some federal-provincial battles, which are not helpful toward getting on with the solution.

By way of looking at some of the targets we need, I want to focus on the tar sands as a prime example of how the government's proposed greenhouse gas rules for large final emitters would give a free pass to pollute and perpetuate the biggest source of emission contributions in Canada.

An important point to focus on when we're setting targets is what it is going to affect. Consider that emissions from the major emitters constitute 47% of the national total. The proposed targets call for greenhouse gas emissions to be reduced 23% against a unit of production basis by 2020, with a 6% exemption for fixed process emissions. This might sound like reduction, but it's not.

I'm not going to do a PowerPoint presentation, but maybe you can follow those charts. That graph is NEB's projections of tar sands growth, which has unmitigated emissions on a very steep climb. That's the blue line. Industry has already said it would continue to reduce emissions per barrel, and in fact it has set some targets for that. That dampens growth, but it doesn't reduce it overall. That's the green line. The proposed large final emitter rules, which is the red line, more or less matches these existing commitments and technically feasible mitigation options. This is a free pass. Further, more aggressive improvements have been targeted by some companies. That's the purple line.

The gap there, this excess reduction, can be turned into credits and sold within the LFE emission trading system. When you multiply that by $15 a tonne, that will generate millions in profit for an already profitable industry. The real bottom line is that emissions will double or triple by 2020. This elephant in the room cannot be ignored, and it has to be factored into our target setting.

It would be impossible to act in keeping with the science and with the proposed purpose of Bill C-377, or to deliver expected reductions as set out in the bill, without addressing the exploding emissions from tar sands operations. Uncontrolled, they will undermine action by other jurisdictions and other sectors and Canada's international reputation. How is Alberta's 14% reduction from 2005 levels by 2050 consistent or justified?

Parliament needs to set extremely clear rules that will work in the real world of the Canadian federation. So-called equivalency agreements, without a firm national cap, which needs to be set in this bill, will further undermine the objective.

With many, many provinces starting to make commitments and moving ahead, we need to ensure that the efforts of leading provinces are not cancelled out. Requiring the minister to demonstrate measures taken to meet the targets, including cooperation or agreements with some national governments, may not be clear or an ample enough mandate to allocate and distribute expected reductions among regions or sectors.

To help with this dilemma--I'm not suggesting this is an easy one to tackle--lessons can be taken from Europe for achieving fairness in a national climate action plan. As a federation, the EU's approach is to set the clear, binding targets, to divide up the responsibility on a transparent basis--they call it burden sharing, and it's not easy but it has to be done--and they create regulatory, market-based, and fiscal tools for implementation. And they require accountability--for instance, the ability to approve or reject plans, with repercussions for non-compliance.

There is a lot of moaning about the difficulties Canada faces. No one can really pretend that we have an easy road to hoe. But as numerous analysts have highlighted, there are significant costs of inaction. Canada is falling further and further behind on energy productivity and will suffer under high fossil fuel costs. With oil pushing $100 and more and government's refusal to go ahead on sustainable energy, our economy, our businesses, and consumers will be left exposed, not to mention the risks associated with extreme weather and warming itself.

Europe, on the other hand, is leaping ahead with a low carbon economy as a centre point. Last week the EU adopted a new package of climate and energy measures, including a 20% target. They said they would go to 30% if other countries came on board. What a bonus it would be if we set a target commensurate with the 25% or 30%. I think that would motivate Europe to go even further.

Renewable electricity and biofuels commitment is in their bill, as well as a new emissions trading system and very, very aggressive efficiency requirements, as Ken has put forward.

People like to complain about China and India, but they are very noteworthy because they are growing in an energy-constrained world that is forcing them to be super efficient, a claim that Canada cannot make, as we have the highest per capita energy consumption and the second-highest energy consumption per GDP.

In closing, WWF urges Parliament to get on with meeting the climate change challenge. It is essential to have a national law that entrenches the science, that positions Canada as a good-faith international player, and that reflects public expectations for avoiding dangerous climate change. The government has accepted the science and is a party to UN climate agreements, yet targets and proposed measures are inadequate. Emissions will continue to burgeon without appropriate binding targets and requirement for implementation.

As we enter Kyoto's first period and look to the next phase of multilateral collaboration, clear direction and expectations are essential. Bill C-377 fits the bill, and that's why we're supporting it. We urge all the parties to endorse the greenhouse gas reduction targets and timelines, and the government's obligations, as set out in the bill, in the spirit of creating a low-carbon society. We can't afford any other excuses and delay. Let's just get on with it.

Thank you.

[The Chair, Conservative, Bob Mills]

Good. Thank you very much.

We'll go directly to the first round of ten minutes.

Mr. McGuinty, please.

[David McGuinty, Liberal, Ottawa South, ON]

Thanks, Mr. Chair.

May I go back to basics, for the benefit of Canadians who are listening to or reading this. Very quickly, Ms. Langer, how many members does WWF have across Canada?

[Julia Langer]

World Wildlife Fund has approximately 80,000 Canadians as members, and internationally we have approximately five million members.

[David McGuinty, Liberal, Ottawa South, ON]

How many staff do you have in Canada?

[Julia Langer]

We have probably 120 staff in Canada.

[David McGuinty, Liberal, Ottawa South, ON]

Were you consulted by the government when it formulated its climate change plan?

[Julia Langer]

Well, about a year ago we specifically put out a notice regarding Bill C-288, which was probably before this very committee. I didn't appear. We did outreach on that, and 12,000 people signed a petition in favour of having targets entrenched in law.

[David McGuinty, Liberal, Ottawa South, ON]

Do you support the government's climate change plan?

[Julia Langer]

We have really serious concerns with the government's climate change plan as formulated, mainly for some of the reasons I expressed here. It does not reflect the science as set out by the IPCC.

When we've done the calculations and case studies, one of which I presented regarding the tar sands, it appears to us that the measures proposed will not meet even the target proposed. So we have a disconnect between science, action, and even action and targets.

[David McGuinty, Liberal, Ottawa South, ON]

Can you name a single independent group in Canada that warrants the government's numbers and the fact that they claim they're going to achieve a 20% reduction by 2020? Can you name a single group in Canada, as a third-party validation, that will support the government's plan?

[Julia Langer]

I don't know, but I haven't canvassed everybody.

[David McGuinty, Liberal, Ottawa South, ON]

Mr. Ogilvie, how many members do you have at Pollution Probe?

[Kenneth Ogilvie]

About 7,500.

[David McGuinty, Liberal, Ottawa South, ON]

Were you involved in helping to formulate the government's climate change plan?

[Kenneth Ogilvie]

Not as a plan itself, no. We've had selective consultations on pieces of policy, but not on the plan itself, no.

[David McGuinty, Liberal, Ottawa South, ON]

Does Pollution Probe believe that the government's climate change plan is the art of the possible in today's world?

[Kenneth Ogilvie]

Oh, the plan is possible, but I think we can go much further.

[David McGuinty, Liberal, Ottawa South, ON]

Can you name a single group in Canada that has reviewed the government's plan and warrants its numbers or supports its analysis? For that matter, have you seen any analysis to substantiate the government's claims?

[Kenneth Ogilvie]

Not that I'm aware of, no.