Environment Committee on Nov. 27th, 2007

[Matthew Bramley]

Perhaps one thing to highlight would be the fact that close to 50% of our greenhouse gas emissions come from heavy industry in Canada.

We need a much more ambitious regulatory framework that would have far fewer loopholes and targets expressed in absolute terms, not in terms of intensity. A much tougher regulatory approach would mean that we deal with half of emissions in Canada. That approach would also be implemented much more quickly.

[The Vice-Chair, Liberal, Geoff Regan]

Thank you very much, Mr. Bramley.

Mr. Vellacott, please.

[Maurice Vellacott, Conservative, Saskatoon—Wanuskewin, SK]

Thank you, Mr. Chair.

Part of the previous government's plan, or the scheme, was to send these billions of dollars of hard-earned tax dollars overseas to purchase hot air credits, and we talked about that at previous meetings when some of you were present here, actually.

The intent, then, to meet the so-called Kyoto obligations by means of that, which really provided.... I think all of us were quite aware it was a bit of a shell game or a scam in that there was no environmental benefit to Canadians with that kind of a system.

I would like to ask Ms. Donnelly first, and then Mr. Drexhage as well, because of your areas of expertise in that: do you support emission credits abroad rather than investing those dollars here at home to improve the air Canadians breathe, as well as creating environmentally sustainable technologies? Then I have a follow-up question related to the big polluters like China and so on, if we have time at that point.

[Aldyen Donnelly]

In principle, I'm actually a strong supporter of international trade and environmental attributes, but this is a place where Canada can really take a lead. It's pretty straightforward. When we write a domestic set of regulations, if a project could be legally built in Canada and would receive credits if it was built in Canada, then the Canadian rule should issue Canadian credits to that same project if it's built offshore. It's a pretty straightforward test, and it is the kind of test that would lead to the true export of our higher standard to the developing world.

I went through, just before this meeting, the whole CDM and JI project list, and I could count in that whole project list projects worth about 12 million tonnes, over the Kyoto budget period, that might have the potential of meeting the test I just enunciated. So to meet what I think is the test we should apply, we would be developing a whole new and better class of international projects than is currently dominating the CDM and JI list.

[The Vice-Chair, Liberal, Geoff Regan]

Mr. Drexhage.

[John Drexhage]

Yes, like Aldyen, I have no issues whatsoever in using the marketplace, whether it's national or global, in supporting environmental attributes that are also commercially feasible. In fact, in my intervention, I made the point of just what's been happening on clean energy investment globally, and it's truly impressive. The CDM has not played an insignificant role in that. We've seen a rise from about 20 billion four years ago to over 100 billion today. That is a very impressive and very necessary trend that needs to happen.

One of the things the CDM helped to accomplish, notwithstanding some individual project issues, HFC-23 issues, etc.... We're all going to go through our growing pains. But what did it do? It engaged the international community--by that I mean in developing countries--in understanding that this thing, carbon, has a market value; therefore, you can do something with it, and it represents an incentive and not always a stick. I'm glad to see that the government has already begun to rethink this. They've included it for industry. Ten percent of its objective can be used towards the CDM. Frankly, I would wish that it look at this more creatively and ensure ways in which both the integrity and economic efficiency is gained.

[Maurice Vellacott, Conservative, Saskatoon—Wanuskewin, SK]

If I have a few more minutes, I have a graph before me. It was prepared by the Library of Parliament, and it goes back from 1971 through just a few years ago. At that point already, it showed that in terms of the megatonnes of carbon produced by, in this case, China compared to Canada, it was 25 or so times more than Canada's. This is going back to about 1971 through 2003.

And we know with all the major coal-fired plants that are coming on stream in China—there are quite a number being announced, some huge ones. My colleague here reminds me that in a few years we won't have enough paper to show the exponential growth in terms of carbon pollution in China in that period of time.

I think that reinforces the point of why we need these people onside. Whether a negotiating tactic or what, we need to actually push hard such that these people become involved, because yes, we can do our part and be an example and all those fine words, but we also need to have these people involved, because the air that I breathe, and my children and grandchildren breathe, is greatly affected by the streams coming from those parts of the world.

I'd just like quick responses on that. I think it's a decent starting point, in that without equivocation we need those people involved and we need to push them hard to that end.

[Aldyen Donnelly]

That leads me to one recommendation I would bring to the Bali negotiating team, if they're open to suggestions.

The aid budgets of the Japanese and three major European nations are tied to developing lower-cost and increasing offshore supplies of coal for them to burn in their own plants. Japan spends five times more money every year tying aid to long-term developing-nation coal supplies than their entire 2008-2012 budget to buy CDM/JI credits.

In a legitimate go-forward in Kyoto, every party should be required to prepare a greenhouse gas inventory for their aid portfolio and add that to their national inventory. While you're at it, all 13 UN agencies, the World Bank, and the ISC, should be required to publish greenhouse gas inventories for their aid portfolios.

You'll find that the $30 billion or so John rightly estimates as spending on clean projects is a rounding error compared to global aid spending on old-fashioned coal-burning stuff.

[The Vice-Chair, Liberal, Geoff Regan]

Thank you very much, Mr. Vellacott.

Mr. Scarpaleggia.

[Francis Scarpaleggia, Liberal, Lac-Saint-Louis, QC]

Thank you, Mr. Chair.

I've listened quite a bit to the comparisons between the Kyoto Protocol and the Montreal Protocol, but I seem to recall people saying, in the past anyway, that they were very different in many ways. I wonder if Ms. Donnelly could address those differences.

First of all, we were dealing with a discrete product. Right then and there the situation was completely different. It's simplified when you're dealing with one product. I'm told that about 80% of the production of that product was located within one multinational corporation. Perhaps she could address that.

I'm also told--and I'm not sure about this--that under the Montreal Protocol, developing nations had a responsibility to go first, or--

[John Godfrey, Liberal, Don Valley West, ON]

You mean developed nations.

[Francis Scarpaleggia, Liberal, Lac-Saint-Louis, QC]

Sorry, I mean developed countries. I'm being corrected by my colleague here.

But anyway, let's stick to the fact that most of it was produced within one multinational company. Wouldn't that make it easier?

[Aldyen Donnelly]

But the reality is that the treaty covered the operations of more than 17 corporations in the U.S. alone; seven separate corporations in India; four in South Korea; 11 in China; and five unrelated to the list I've already...in Japan; and four in the U.K.

[Francis Scarpaleggia, Liberal, Lac-Saint-Louis, QC]

But that's really nothing compared to the challenge--

[Aldyen Donnelly]

I'm talking about the model.

The other thing is that they sat down and said, “How do we convert this emissions challenge to a product list?” The actual products are broken into three categories, and there are hundreds of products on the list.

I'm not saying this is easy. I'm just saying it's easier than what we're trying to otherwise do in Kyoto.

The great accomplishment of the Montreal Protocol was that the developed nations went first, but they went first having reached an agreement with the developing nations on the dates the developing nations would go. So everybody had their dates in place before anyone went.

On the problem with Kyoto, nobody is wrong, but we're at the place where we're not sitting down and having that same kind of dialogue.

[Francis Scarpaleggia, Liberal, Lac-Saint-Louis, QC]

You said at the beginning that we should use this approach of banning the production of certain products.

[Aldyen Donnelly]

The key deal is saying, “I have a schedule that is long term and covers 70 years for phasing out the production of key--”

[Francis Scarpaleggia, Liberal, Lac-Saint-Louis, QC]

We're going to ban or phase out the production. There are so many products out there, so what products would you start with?

Wouldn't it be much more complicated to start creating schedules for the phase-out of greenhouse-gas-producing products over 70 years than getting rid of HCFCs?

[Aldyen Donnelly]

Ten product classes in greenhouse gases cover 85% of the global industry. It's a shorter list than the CFC list. If you break those 10 into subclasses, you have the 40.

[Francis Scarpaleggia, Liberal, Lac-Saint-Louis, QC]

I know, but a lot of it's related to energy.

Can you see us going to a country and saying, “We want you to stop producing these products”?

[Aldyen Donnelly]

We're not saying that. We're saying that if you sell cement here, if you sell aluminum here, if you sell iron and steel here, you account for your emissions, and they have to be below x per tonne.

We don't tell them to do anything. We say, “We don't buy from you unless you account and you meet a test”.

[Francis Scarpaleggia, Liberal, Lac-Saint-Louis, QC]

I think it's very complicated, and we're almost getting into command and control.

[Aldyen Donnelly]

By the way, I just described the AB 32, the California state legislation that was passed into law in December 2006. If you want to read how to do it, you can download the California state law.

[The Vice-Chair, Liberal, Geoff Regan]

Mr. Drexhage, do you wish to respond to that?

[John Drexhage]

Yes.

That's precisely the point. If it's going to be implemented domestically, it's a non-starter internationally.