Evidence of meeting #39 for Environment and Sustainable Development in the 40th Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was targets.
A recording is available from Parliament.
12:05 p.m.
Conservative
The Chair Conservative James Bezan
Okay, thank you very much.
To wrap this up with a seven-minute round, Mr. Warawa, you have the floor.
12:05 p.m.
Conservative
Mark Warawa Conservative Langley, BC
Thank you, Chair.
My thanks to the witnesses for being here. I also want to thank you for the briefing materials. We find them very helpful. Often we don't get them until we come into the meeting. I got them yesterday and was able to read through them last night.
Mr. Tirpak, in your presentation you highlighted the consequences of climate change all over the world. In the third paragraph of your presentation you referred to the first paragraph of the statement from the Toronto Conference on the Changing Atmosphere, held in 1988. You said:
The conference went on to set a target of 20 per cent reduction in carbon dioxide emissions below 1998 levels by 2005. Those were heady days in the climate change field. Today, we appreciate much more how easy it is to call for ambitious targets and how difficult it is to achieve them.
That was part of the 1993 Liberal red book, a commitment to reduce greenhouse gas emissions. We know that Canada then signed the Kyoto commitment. Of course, we know what happened. The result was that nothing happened on climate change under the previous government.
I would like a comment from each of you on the importance of having a harmonized continental approach as we set targets, as we create a plan to fight climate change. At our last meeting we had witnesses from the EU and the U.K. They have 27 different countries setting a continental target, with the U.K. being one of those 27. It only makes sense to have all the countries on the continent working together to set a common target. This was shared and agreed to by the witnesses at the last meeting.
I am sure you are all aware of the clean energy dialogue that has been taking place since President Obama came and met with our prime minister. There has been ongoing dialogue on climate change and how to have a harmonized approach. Canada has committed to a 20% reduction from 2006 levels by 2020, and similar targets are coming out of the United States.
There is still a lot of work required to get the legislation, but would you agree that because of our interlinked economies we could best approach climate change from a harmonized continental position?
12:10 p.m.
Senior Fellow, Associate with the International Institute for Sustainable Development, World Resources Institute
I think it would be helpful to have a harmonized approach. But as we're witnessing, it would be extremely challenging to get our legislative processes moving in harmony. Short of that, if both countries adopted a cap-and-trade bill, or if both adopted regulations and we moved into the implementation stage, a lot could be done to advance toward harmonization.
Mr. Murrow has outlined some of the challenges, particularly in the area of price cap, making sure that both our countries have the same level of stringency for offsets. These are obstacles that would have to be worked through in both countries.
12:10 p.m.
Director, Policy Analysis, Environment Northeast
Without a North American government, it would be hard to have exactly the same programs put in place. We strongly agree that there should be some linking. The economies of the U.S. and Canada are so interlinked that we should have some consistency in linking over time.
There will be challenges in aligning the legislative and regulatory processes, but we think that fairly consistent programs, with some technical adjustments, would allow for linking. In the end, we could probably get a political decision on whether or not to allow trading among countries.
12:10 p.m.
Vice-President, Markets and Business Strategy, Pew Center on Global Climate Change
Canada is the United States' largest trading partner, and as such I think it's really essential that there be linkage between the two programs. However, just to echo what you've just heard, I think it will be difficult for U.S. policy-makers to factor in a harmonization goal at the same time that they're trying to get something through the Senate and the House.
I think there are so many obstacles here at home that they're focusing exclusively on getting it through our process. Hopefully, at the end of the day we have two programs, a Canadian program and a U.S. program, that can be linked. I think there are only a few elements that actually would keep programs from linking.
Mr. Murrow has identified many of those. I think program rigour is a key issue, if the two programs are not similarly rigorous, having a similar scope of coverage, similar elements, including the price controls and offsets, I think that would make it difficult to link.
I do hope at the end of the day that they can be linked and I think there are ways to do that even with elements that are not exactly alike, through discounting, for example, exchange rate kinds of linkage elements.
12:10 p.m.
Conservative
Mark Warawa Conservative Langley, BC
Very quickly, Dr. Murrow and Mr. Tirpak, there seems to be a contradiction in your presentations regarding the price of energy. Mr. Tirpak is saying China has it right by raising gasoline prices four times this year and a tax on gas guzzlers. Mr. Murrow, you seem to be talking about dropping prices of energy as you get efficiencies.
Maybe you can answer that through one of the other questions from one of the other people, because I'm out of time, I believe.
12:10 p.m.
Conservative
The Chair Conservative James Bezan
You are, Mr. Warawa. Thank you very much.
Let's go to our five-minute round. Again, I'd just remind witnesses to please keep your responses very brief and succinct.
Mr. Scarpaleggia, please.
12:10 p.m.
Liberal
Francis Scarpaleggia Liberal Lac-Saint-Louis, QC
Thank you, Mr. Chair.
It's a very interesting session today. By getting the U.S. perspective on this issue, I think it helps us in our study of this bill and our understanding of the Canadian situation relative to our biggest neighbour.
My question is addressed to Dr. Peace.
How long do you think it would take to create a cap-and-trade system that would be functioning, that would be up and running, in the most optimistic legislative scenario in the United States? Are we talking about one year from today, two years from today, three years from today? Assuming that everything goes smoothly, the two bills in the Senate are reconciled and they're adopted and in the mid-term elections the American people send representatives to the House and to the Senate who are keen on doing something about climate change, how long would it take to get this cap-and-trade system up and running?
12:15 p.m.
Vice-President, Markets and Business Strategy, Pew Center on Global Climate Change
It's a very good question. I believe there are a number of steps to getting it up and running. The offset portion, for example, will take a bit of time.
I know for certain that much effort is actually ongoing currently. For example, the EPA is looking at offset methodologies, looking at the CDM Executive Board, what's come through there, what's coming out of Canada in terms of.... I believe Alberta has an offset program. So they're looking at what's out there, trying to figure out what works, what doesn't work, in a U.S. context. So people are working on it today.
As to when it actually could be up and running, I believe the earliest that people are suggesting is 2012, and maybe 2013 might be more likely. That's just a best guess, though. I'm sorry I can't give you more specifics.
12:15 p.m.
Liberal
Francis Scarpaleggia Liberal Lac-Saint-Louis, QC
That's a good answer. Thank you very much.
My second question is a bit of a follow-up on that, and it's to Mr. Tirpak.
You mentioned in your opening remarks that it was very important for countries like the United States and Canada to have fixed and absolute targets. Am I correct?
12:15 p.m.
Senior Fellow, Associate with the International Institute for Sustainable Development, World Resources Institute
Yes.
12:15 p.m.
Liberal
Francis Scarpaleggia Liberal Lac-Saint-Louis, QC
In Canada, the present government has been promoting the idea of intensity targets for quite a while. This goes to a point you were making, Dr. Peace, about how the two cap-and-trade systems would have to have the same degree of rigour.
Would it be possible to link two cap-and-trade systems, a U.S. and a Canadian cap-and-trade system, if one has fixed targets and the other has intensity targets, like the present government here in Canada is proposing?
12:15 p.m.
Senior Fellow, Associate with the International Institute for Sustainable Development, World Resources Institute
I think it is possible but very difficult, because obviously an intensity target involves.... The denominator is the GNP, and that is very hard to predict. But I think analysts have looked at it. There are ways to do it, but I think it would be very difficult.
12:15 p.m.
Liberal
Francis Scarpaleggia Liberal Lac-Saint-Louis, QC
The point I'm getting at, Mr. Tirpak and Dr. Peace, is that you said a moment ago, Dr. Peace, that in one of the most optimistic scenarios, it wouldn't be until 2012 or 2013 that the U.S. could get a cap-and-trade system up and running. Then, Mr. Tirpak, you're saying that connecting this cap-and-trade system with the Canadian system based on intensity targets would require even more effort. So on this North American system that the government is touting constantly as the magic bullet for the problem of climate change, we could be looking at something in Canada, or on the North American scale, that wouldn't really be functioning for quite a few years.
12:15 p.m.
Senior Fellow, Associate with the International Institute for Sustainable Development, World Resources Institute
It's probably even more complicated than that, to the extent that almost all other countries in the world are moving in the direction of fixed targets. So if you consider trading with the European Union, you consider linking with Australia, and even possibly Japan in the future, most of those countries are moving in the direction of fixed targets. You really want to promote ultimately a global carbon market, not just a North American carbon market, and I think that needs to be kept in mind.
12:15 p.m.
Conservative
The Chair Conservative James Bezan
Thank you very much. Time has expired.
Mr. Woodworth, you have the floor.
12:15 p.m.
Conservative
Stephen Woodworth Conservative Kitchener Centre, ON
Thank you very much.
I'd like to just ask you, Mr. Tirpak, the ACESA plan, the American Clean Energy and Security Act, the Obama plan, do you think that's on the right track?
12:15 p.m.
Senior Fellow, Associate with the International Institute for Sustainable Development, World Resources Institute
Well, let's separate the two. I think that the President is intent on doing as much as he can with the current authorities that he has. That will, as we say, not be ideal. If we don't get legislation, it will be a piecemeal approach. It will be more complicated for industry to comply. We would have presumably three regional trading systems, perhaps more. I think that the administration will do the best it can under those circumstances. I don't have an estimate on what the emission reductions would be under that scenario.
Personally, my institution is also party to what was U.S. CAP, as Janet was alluding to. There was a very complicated process with industry. It is not what all the environmentalists would want to have in that bill, nor is it what all the industrial companies would want to have. So there was a great deal of compromise that went into the position of U.S. CAP and ultimately found its way into the ACESA bill. It's not perfect.
12:20 p.m.
Conservative
Stephen Woodworth Conservative Kitchener Centre, ON
I understand that. We have a similar problem in Canada, in that we have a federal-provincial system, which requires us to negotiate and to compromise among regions. As I understand it, the targets that the bill set are 20% below 2005 by 2020. Is that correct as the preliminary target?
12:20 p.m.
Senior Fellow, Associate with the International Institute for Sustainable Development, World Resources Institute
It's 17% under ACESA and 20% out of the committee, but that is under the cap. My organization has estimated that with the other provisions that are not capped, you would get between 27% and 32% reductions by 2020. So the capped portion would get you 17%. Those sources that are not capped but yet subject to regulations of one type or another could actually lead to emission reductions between 27% and 32%.
12:20 p.m.
Conservative
Stephen Woodworth Conservative Kitchener Centre, ON
How challenging will that be to hit that 17% or 20% cap?
12:20 p.m.
Senior Fellow, Associate with the International Institute for Sustainable Development, World Resources Institute
I actually don't think it is going to be that challenging, partially because of the use of offsets and it depends on how many offsets come into our system internationally. There is some concern I've heard expressed by the utility companies that there may not be enough offsets in the time period between 2015 and 2020. But overall the cap is, I think, quite doable.