Environment Committee on Feb. 6th, 2008

[Dr. Shahrzad Rahbar]

Thank you for your question, Mr. Bigras.

I will also revert to English. I apologize; my French isn't good enough.

The issue of credit for early action is a very important issue. Yes, I share the sentiments that a credit for early action should not be ignored. Frankly, again I go to the practical approach. I've watched us—meaning the large final emitters—and different governments hit our heads on the increasingly thick wall of finding a way out of credit for early action.

I've given you our record. Our industry, at least talking about my own sector, has taken action. I also look at our customer base, the six million we touch base with who have three-quarters of the emissions. My advice to my members is to forgo your credit for early action and let's get on with getting something in place. Yes, sure, we would like to have the credit for early action.

Did I misunderstand the question?

[The Chair, Conservative, Bob Mills]

Go ahead, Mr. Cullen.

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

Thank you, Mr. Chairman. Thank you to our guests for being here today.

Just to quickly establish some finer points on this, Mr. d'Aquino, I will assume that you believe in the science of climate change.

[Thomas d'Aquino]

I do.

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

Do you believe it is a serious threat to the economy and to the fabric of society?

[Thomas d'Aquino]

I do.

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

What assessment has your organization or any business organization in Canada done on the economic impacts to the Canadian economy of any degree rise in temperature due to climate change?

[Thomas d'Aquino]

To answer that question, Mr. Cullen, would mean looking at many initiatives we've taken—some of them internal, some of them external—and I think you probably know our position on this.

In the mid-1990s, I would say, although a majority or a core of the leaders of major enterprises concluded that the science was still not exact—as one could argue is the case today—there was a wholesale shift to what I would call a prudential approach. That prudential approach was based on assumptions that whether it was three, five, or eight degrees over whatever period of time we were talking about, we knew one thing for certain: the earth was going to get warmer, and on that there was no debate—

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

Let me stop you right there. Under those scenarios—three or four or five degrees—has there been any assessment? I'm looking for a figure. I'm looking for a dollar figure or a percentage of GDP, as was attempted under the Stern report. Has there been any assessment done by anybody in Canada—by the government or yourselves—to understand the percentage? You can say no if an assessment hasn't been done.

[Thomas d'Aquino]

I would just say, “No, but”. That is, given the complexity of this and given how it will affect different regions and different industries, what you have is really a collection of prognostications, but no single number.

The only thing I would add is that very early on, when it was enormously unpopular to think about or talk about the word “adaptation”, we recognized that with a warmer climate there would be transitional changes; we believed they would be quite profound, but we also believed there would be benefits as well as losses.

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

Although I have respect for the intelligence of the panel in appreciating the science and understanding the gravity of the situation facing us, I have to express some disappointment in not seeing the severity and the seriousness of this issue matched by the measures that need to be taken.

I get no sense from any of the panellists that there is a dispute about the science. Anyone can disagree about the science of climate change if they wish.

I would then ask if anyone disagrees with the notion of setting our national targets based upon that science—I'm seeing no disagreement—or do we choose to use another metric, another measure, by which we set national targets, a measure not based on science? I would love to hear a reason for us to use something other than science to do that.

[John Dillon]

I would simply say that the targets we're talking about are global targets. We don't deal with climate change successfully unless we meet global targets.

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

Is it possible to meet global targets without having domestic credibility of our own?

[John Dillon]

Well, that's absolutely correct. All that we've questioned is the continual focus on targets without actually putting the measures in place and without understanding what's going to--

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

Certainly. Let's talk about some of those measures.

I'm just curious. Mr. Sawyer, you did some speculation and prognostication. I'm reminded a bit of the old saying that economists have predicted ten out of the last five recessions.

On the use of carbon tax in your modelling or your projection, I looked through the bill again just to remind myself. Is carbon tax put forward as one of those mechanisms in Bill C-377?

[David Sawyer]

If you want cost-effective reductions, there are certain policy measures you have to implement. In the absence of any clear indication of what those are, I brought some ideas forward.

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

Great. The ideas are welcome.

I would take you to clause 10 and bring you to the four mechanisms that are actually offered in the bill, one of them being “market-based mechanisms such as emissions trading or offsets”.

A confusion I have.... I mean, the list is long, and many years have been spent on this. This issue was first raised by the NDP in 1984 in the House of Commons, for goodness' sake, and Canadians can be forgiven for yet another panel and another bill attempting to set some certainty.

Mr. d'Aquino, you talked about the policy of both this government and previous governments being in a state of chaos and you talked about how there was no overarching plan. You were calling for aggressive action on climate change, a national strategy. Is it that you just don't like the targets in this particular plan? I ask because it is exactly what you asked for: certainty for your business community.

[Thomas d'Aquino]

Mr. Cullen, when I referred to “policy chaos”, I was not saying that the policies of this government, or indeed certain elements of the policies that have been put forward by opposition parties or by provinces, were chaotic. What I was saying—and this is a very important distinction—is that no matter how good or constructive many of these policies are, if they're all going in different directions, you have policy chaos.

I visited the Commonwealth of Australia about four months ago and discovered that the states of Australia and the Commonwealth Government of Australia were all going in the same direction. It is a federation, just as we are; why we can't we do it? The Federal Republic of Germany has Länder and a central government all going in the same direction.

When I talk about chaos, it's not referring to any particular party policy or government policy as chaotic; it is saying we should have convergence, please, and I see very little indication, based on the last meeting of the Council of the Federation and the first meeting of the Council of the Federation, of that being the direction we're going. There's a price to pay for all that and all the uncertainty that goes with it.

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

Yes, of course, there's a price to pay, and I think we're paying it right now.

Ms. Rahbar, I have a question on the polluter-pay principle. Is the cost of pollution being captured right now in the energy sector in Canada?

[Dr. Shahrzad Rahbar]

That's a good question, Mr. Cullen.

If the question is whether, as an economy, we have put a price on using the atmosphere as a receptacle for waste, I'd have to say not adequately.

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

It's a rather rudimentary question, but as it is right now, the receptacle of waste, the atmosphere, is not being given any due course. Mr. Stern used the notion of the greatest market failure in history—our inability, as the free market is working right now, to capture the cost of the pollution we are creating through the generation of our economy.

No one has actually said it, but I get a sense that they don't like the targets in Bill C-377, yet the measurement and the management—the metric we need to use—is what any business must do. In every quarterly profit, they don't use the number of staplers they happen to own; they use profitability. If they are off those targets, then they have either compensation to pay to their stakeholders or a big problem within the board. The Government of Canada, as the board of directors setting the policy, must set targets based on the amount of emissions that we seek to have as a nation. To base any plan on any other metric seems to us to be foolhardy.

To suggest that the notions you've put forward are too ambitious...I just did a quick look and played some graphs and looked at what's happening in the U.S. Congress. They're right in line with the Lieberman-McCain bill, so if Mr. McCain needs to be accused of attempting to destroy the Canadian economy with his plan and his targets, then perhaps we can apply the same measure onto our own, and now Republicans and New Democrats are hanging out together and making the same economic models, which I suggest is not true.

If the cost of pollution is not captured as it is, it must be captured, and it is the government's responsibility to ensure that these externalized costs that we've been enjoying for so many years—and I'd suggest the energy sector in particular has been enjoying these externalizations of cost—must be captured.

I have a question on the baseline. Ms. Rahbar, you didn't like the 1990 baseline. You suggest it was going backwards in time to look at it. I would suggest to you that the market uses an index to measure whether the market is up or down. Picking a target in time is essentially what is required in order to have an ambition and a goal. Is that true?

[The Chair, Conservative, Bob Mills]

Mr. Cullen, could you also let Mr. Dillon answer, please?

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

Of course.

[Dr. Shahrzad Rahbar]

Mr. Cullen, my remarks were perhaps jaded by the fact that for the past too many years I had been party to what I would characterize as not exactly productive conversations around who was doing what, and when, in history. If we could do it and agree on it without having to spend another five years, I would suggest that, theoretically speaking, agreeing on a baseline and measuring is fine. I've just been tired over many years with the experience of seeing the difficulty that has occurred in doing that.

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

Of course, and I understand in this instance your consternation--