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.
Senior Fellow, Associate with the International Institute for Sustainable Development, World Resources Institute
I think there is a great deal of interest in Congress in ensuring that there's a level playing field among countries. It's coming about in the form of a border tax. There are a lot of ways that border tax provision might ultimately be implemented. It depends on how much discretion is given to the President. It will not be an easy thing to calculate from a technical standpoint, so there may be some obstacles there. But I think it is a serious effort by Congress to try to level the playing field.
Vice-President, Markets and Business Strategy, Pew Center on Global Climate Change
You're absolutely correct. The Waxman-Markey bill has a program for the international reserve allowances required for countries and parties that do not have comparable greenhouse gas regulation. In the Waxman-Markey bill there is no flexibility. It comes into force and is applied to sectors that are considered energy-intensive, trade-exposed. I think that has implications for countries that do not have serious climate legislation.
As Canada is the U.S.'s largest trading partner, it could have implications for Canada. But I have to tell you I fully expect that Canada will have climate legislation. Canada has laid a huge amount of foundation to get there. It has done a lot of work engaging with the public and industry. The national round table has significant recommendations, and many of your provinces are actively engaged in the western climate initiative, the midwest climate accord.
Regional initiatives help lay the ground for a national program, and I do expect Canada will have one. If it had a national program that was considered comparable it wouldn't be subject to this international reserve allowance program, or the border tax measures, as it's commonly referred to.
Bloc
Bernard Bigras Bloc Rosemont—La Petite-Patrie, QC
Ms. Peace, this leads me to my second question. For a number of years, the central administrations of the United States and Canada have not taken climate change action, although regional initiatives have been implemented in some American states and some Canadian provinces.
What do you think of these regional initiatives which could perhaps even lead to the implementation of an emissions exchange, a cap and trade system? Do you believe that this could be an interesting approach for the states and provinces that truly want to take action in response to climate change?
Vice-President, Markets and Business Strategy, Pew Center on Global Climate Change
I think it's an important foundational piece. I think it's not optimal. It's not optimal for industry to have a piecemeal approach. Now, if every regional program were absolutely consistent.... I have to tell you that the western climate initiative, the regional greenhouse gas initiative, and the midwest climate accord in the U.S. are talking and trying to come up with harmonized rules, because this harmonization is really essential for our cost-effective solution.
So if that's the best you can get, at least it gets you down the road and gets you started, but it is not optimal based on the fact that you have multiple states interacting and multiple sets of rules. It just makes it more difficult, but it doesn't make it impossible.
Bloc
Bernard Bigras Bloc Rosemont—La Petite-Patrie, QC
If I am not mistaken, a few years ago, the American administration adopted regulations or legislation to ban dirty oil from the oil sands. Its use by the public sector was banned.
Could you tell me whether these regulations are still in force and what is the future of this approach? I don't know whether you know about this, but these regulations were, I believe, adopted in June 2008.
Vice-President, Markets and Business Strategy, Pew Center on Global Climate Change
Is it low-carbon fuel standards?
Bloc
Bernard Bigras Bloc Rosemont—La Petite-Patrie, QC
Perhaps the Senate adopted regulations to ban the use of oil from the oil sands by the public sector. Are you aware of these regulations?
Conservative
The Chair Conservative James Bezan
Are any of the witnesses aware of these regulations?
Dr. Peace, are you aware of them?
Vice-President, Markets and Business Strategy, Pew Center on Global Climate Change
Yes, I am.
California actually has a low-carbon fuel standard that it put forward and finalized this past summer.
There was a letter that was sent by Congressman Waxman. His provision was included in another piece of legislation. I don't know if that has been fully implemented at this point.
I think of more direct concern would be the low-carbon fuel standard that California has put forward and which 17 other states have said they will try to implement as well.
NDP
Linda Duncan NDP Edmonton Strathcona, AB
First of all, I want to thank Mr. Murrow for his comment about the need to move on in setting the targets and then to get on with the details. Certainly my party has been pushing for that, to finalize and get this bill that we're reviewing and that you're speaking to today into the House, so that we can get on with the details. Thank you for that comment.
Thank you, all three of you, for participating. I wish we could have a lot more time with you, because of course we have a thousand questions about what's going on in the United States.
I have a question for Dr. Peace and Mr. Murrow. You both mention in your briefs your work on the economic impacts of climate change. The ENE brief talked about that quite a bit, but the Pew foundation also talked about the economic impacts of climate change. I wonder if each of you, starting with Dr. Peace, could talk in a little more detail about the work you've done in showing the pros and cons of acting early on climate change, and what the relative impacts are of business as usual versus timely action.
Vice-President, Markets and Business Strategy, Pew Center on Global Climate Change
We have done quite a bit of work in looking at the benefits of acting and the costs of inaction, if you will. We have not done a cost-benefit type of analysis. We've looked at those done by others.
We find that climate isn't the easiest to assess with a cost-benefit type of analysis, because the costs are easy, but the benefits are very difficult. They're long-term benefits and many of them are non-market in nature. It's very difficult to put a price tag on frogs, for example, or polar bears. It's harder, but that's not to say that they don't have value, because of course they do have value.
Our work shows that these costs of inaction far exceed the costs of taking action. You can look at any of the modelling of the bills, the Waxman-Markey bill or even the previous bills, and the assessments that I think have merit, the ones that take what I would call reasonable assumptions in their modelling, show that these costs are definitely manageable. That's not to say that there is a positive benefit of taking this action, but rather that the costs are small in comparison to the benefits, and the costs are definitely manageable over time.
It's a difficult proposition to look at with a cost-benefit type of framework. We have been spending some time with the integrated assessment models. Most of these do not factor in the risks of hitting a tipping point within the climate, so we think they undervalue the damage. It's a difficult proposition, but I definitely think that the benefits of taking action clearly outweigh the costs of doing so.
Director, Policy Analysis, Environment Northeast
Thank you. That was a nice summary.
Maybe I'd just highlight a couple of things.
As you get into the details of policy design it's important to recognize that there are some decisions you can make about the framework and also how you finance or invest in different technologies that can really help on the economic development side. I highlighted energy efficiency as one example of that, where you get significant benefits coming back to consumers as you bring the consumption of energy down at the same time as you're bringing CAP into place. There are other design elements that can be extremely helpful, such as offsets design, whether international investments are allowed, those kinds of things.
So there are significant ways to reduce costs. In fact, if you look at some of the U.S. modelling, in some cases you see allowance prices or the cost of carbon rising but GDP impacts going positive as you invest in new technologies and reduce your dependence on foreign sources of energy. So there are significant economic benefits to be achieved.
NDP
Linda Duncan NDP Edmonton Strathcona, AB
Thank you.
I have a question again for Dr. Peace. I noticed in your brief that you mentioned your work with the Business Environmental Leadership Council. I had the opportunity of going with the federal Minister of the Environment here to the world business summit on climate change, and they seemed to be very clearly onside, certainly in Europe and the United States.
The British High Commissioner appeared here as well and spoke about the close relationship they have with their business community, who seemed to be onside with early action so that they could get investment opportunities.
Can you elaborate a little bit more about the positions of your Business Environmental Leadership Council and what they're saying?
Vice-President, Markets and Business Strategy, Pew Center on Global Climate Change
The Pew Center works with 46 mostly Fortune 100 companies. For them to be part of our Business Environmental Leadership Council, or BELC, they have to agree to four core principles. One of those is mandatory climate legislation.
Within our BELC we don't have a framework that specifies what we think that legislation should look like. We work with the companies and we vet all our policy recommendations through the companies, because we want to learn what works in those sectors and what doesn't work. We don't always agree, but we always work with them to figure out what works best in terms of policy and in terms of economics.
Another business group that the Pew Center has been very actively engaged with is the U.S. Climate Action Partnership. That's 26 companies, five major environmental groups, and within this U.S. CAP, the climate action partnership, we have developed a blueprint for climate action. You can see a lot of that in title III of the Waxman-Markey bill. We're calling for a cap-and-trade program and then complementary measures to incentivize clean technology.
We also have recommendations on cost containment provisions, such as offsets, such as banking. Many of the provisions we've recommended in the blueprint are found in title III of the Waxman-Markey bill.
NDP
Linda Duncan NDP Edmonton Strathcona, AB
Under the U.S.-Canada clean energy dialogue, both countries undertake that they will engage their publics. Has the Pew Foundation been engaged by your government?
Vice-President, Markets and Business Strategy, Pew Center on Global Climate Change
There's the Pew Charitable Trusts, and we're the Pew Center on Global Climate Change. We're two separate groups.
Speaking as the Pew Center on Global Climate Change, we have talked to a number of Canadian representatives about linkage, about different design options, but as official dialogue, we have not.
Linda Duncan NDP Edmonton Strathcona, AB
Your own government either? I would also actually like World Resources Institute to answer that.
Conservative
The Chair Conservative James Bezan
Thank you, Ms. Duncan.
Let's have a very brief response, Mr. Tirpak.
Senior Fellow, Associate with the International Institute for Sustainable Development, World Resources Institute
We're also part of the U.S. CAP, along with Pew. I don't know the answer to your question. I'll have to get back to you. Thank you.