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.
Conservative
Stephen Woodworth Conservative Kitchener Centre, ON
Do you think the 20% by 2020 cap is a reasonable compromise, based on all the factors involved down there?
November 24th, 2009 / 12:20 p.m.
Senior Fellow, Associate with the International Institute for Sustainable Development, World Resources Institute
I do.
Conservative
Stephen Woodworth Conservative Kitchener Centre, ON
Have you studied the Canadian 2007 climate change plan, Turning the Corner, which requires a 20% target or cap by 2020--that is, 20% of 2006?
Senior Fellow, Associate with the International Institute for Sustainable Development, World Resources Institute
I have not.
Conservative
Stephen Woodworth Conservative Kitchener Centre, ON
Are you aware that the bill we're studying here today in committee, Bill C-311, contains targets that are significantly more strenuous than that?
Senior Fellow, Associate with the International Institute for Sustainable Development, World Resources Institute
Yes, I am.
Conservative
Stephen Woodworth Conservative Kitchener Centre, ON
Do you think there's a possibility the American and Canadian governments can collaborate in harmonizing the caps and regulations that are currently going through the American legislative process?
Senior Fellow, Associate with the International Institute for Sustainable Development, World Resources Institute
I doubt that. The American legislative process is on its own track. I can't envision a negotiation between the State Department and the Ministry of Foreign Affairs to bring back caps into the U.S. legislative process. I don't know how it would work in Canada. I just don't understand how that could happen.
Conservative
Stephen Woodworth Conservative Kitchener Centre, ON
Is there any reason you could give me why the 20% of 2005 by 2020 target in the U.S. would not be a suitable kind of compromise for Canada to achieve at this time?
Senior Fellow, Associate with the International Institute for Sustainable Development, World Resources Institute
I think you ought to bear in mind what I just said about the fact that our estimate is that you would get something approximating 30% reduction by 2020 with the U.S. bill. That's something you might want to look at.
Conservative
The Chair Conservative James Bezan
Mr. Woodworth, your time has expired.
Monsieur Ouellet, vous avez cinq minutes.
Bloc
Christian Ouellet Bloc Brome—Missisquoi, QC
Thank you, Mr. Chair. I want to thank our witnesses for taking the time to meet with us. Your testimony is extremely interesting.
My question is for all three witnesses. To date, you have talked about harmonizing targets. You have implied that it would be difficult for you to imagine these targets being lower in Canada than in the United States, but the fact that they might be higher would not be a problem for you. In other words, if Canadian targets were much higher, what would happen?
Quebec has much higher targets than Canada. This does not stop it from functioning. If it had much lower targets, this might perhaps undermine Canadian policies. If Canada had much higher targets than the States did, would this cause a major management problem? I understand that this might be important when it comes to the regulations. In your opinion, what would the problems be if Canada had much higher targets than the United States did?
Director, Policy Analysis, Environment Northeast
I'll go.
I think it mostly will get down to price. If the allowance prices are significantly different between two countries, I think there will be political hurdles to initiate in trading. One system would essentially significantly reduce the price of another. If you had a situation whereby Canada's targets were significantly more aggressive and importantly all the other design elements led to a much higher carbon price, I think there would be some barriers to trade. You have to look at the final outcome and what people anticipate the overall program design will look like and what the overall price might be.
Thank you.
Vice-President, Markets and Business Strategy, Pew Center on Global Climate Change
I completely agree. The issue of price and linkage is really important. If the Canadian price were significantly higher, then what we would see here in the U.S., if buyers would be buying U.S. allowances and significantly bringing up U.S. prices, that would not be politically acceptable on the U.S. side. In the same vein, a huge outflow of Canadian investment into the U.S. to buy these allowances would also not be politically acceptable on the Canadian side. I'm just guessing, but that would be my take on that. I don't think two significantly different prices would be politically acceptable for either country.
Senior Fellow, Associate with the International Institute for Sustainable Development, World Resources Institute
I don't really have anything to add. I think a lot would depend on how comprehensive the programs were and how they were implemented.
Bloc
Christian Ouellet Bloc Brome—Missisquoi, QC
I would like to come back to the issue of the difference between the two. You are only attacking one thing: the price per tonne of carbon. However, you have not mentioned the possibility that, with Europe, the rules of the game could be fair. In other words, must we also align ourselves with what is being done in Europe, given that taxes may be imposed there—and it is quite possible that they will be—on products manufactured in countries without the same greenhouse gas emissions reductions targets?
Senior Fellow, Associate with the International Institute for Sustainable Development, World Resources Institute
As you probably know, Europe has put forth two targets. One is a 20% reduction and one is a 30% reduction that is contingent on what the actions of other countries are doing. I don't know the calculus they will use to determine whether they go to 20% or 30%, but I do know that they are looking at the U.S. and whether they are comfortable with the range of efforts that would be made, particularly from today. They are a little less concerned about the historical emissions, or what hasn't happened since 1990, but they would like to be sure that going forward, we're all marching forward together. I think they will also be looking at Japan and Korea and the actions put on the table by China.
It's a calculus that I can't really describe for you, but I do know that's the way they're approaching it.
Conservative
Blaine Calkins Conservative Wetaskiwin, AB
Thank you, Mr. Chair.
Thank you very much to the witnesses for being here today.
We've heard a lot of talk from the witnesses here in regard to the fact that the American process and system are quite a bit different. Right now Congress is looking at these bills. There's the House of Representatives bill and there's the Senate bill. We talked at length about the size of these bills. Could you give us any indication of just how large these pieces of legislation are?
Vice-President, Markets and Business Strategy, Pew Center on Global Climate Change
This is Janet Peace.
I can tell you that the Waxman-Markey bill is over 1,400 pages, and that doesn't include the provisions of the Clean Air Act that are used by reference.
Conservative
Blaine Calkins Conservative Wetaskiwin, AB
That's quite interesting, because when I had the chance to read Bill C-311, which is the bill we're currently debating, I actually read it twice in the time it took me to drink a coffee. It's about 13 clauses long, I believe.
Parliament is going through the debate about this bill and trying to set Canada's target levels. We've heard from the European Commission. We've heard from various other outside agencies and NGOs, environmental non-governmental organizations, that have brought testimony here criticizing the Government of Canada's current position, which is to be 20% below 2006 levels by the year 2020, with significantly higher targets for 2050, yet all we have is this exercise of setting targets with no real plan. It sounds as though the United States obviously has some intentions there in the legislative process for a plan.
Maybe somebody would like to help me out with this. If we're going to go as a North American unit, and we've established that we are each other's largest trading partners, and we see what's happening in the European Union, does it make any sense to have different levels of targets for Canada and the United States at a time when the European Union--and Mr. Tirpak has just said this--is looking at what the rest of the world is doing when it decides its own target levels? Would it make any sense at all for Canada to have a go-it-alone approach with Bill C-311, when the American administration is shooting for a target similar to what we announced years before President Obama was elected to office?
Director, Policy Analysis, Environment Northeast
May I address the question of the scale of the bills? There's a downside to including all the detail in legislation, a significant downside. The arguments that go on endlessly over small paragraphs, which really should be resolved in a regulatory process, are pretty astounding. There's some appeal to leaving more to regulation, which I think you all should consider. I think the challenges in terms of getting a bill of that scope through the U.S. Congress are very significant, and a regulatory process is a lot more appealing in many ways.