Evidence of meeting #40 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
Mark Warawa Conservative Langley, BC
Both of you touched on the cost to Canadians of moving ahead on Bill C-311.
Professor Dissou, you said the choices would be painful.
Professor Plourde, you asked, are Canadians ready? Do they “appreciate the magnitude of the task underlying the emissions reductions commitments?”
Could you, starting with Professor Plourde, be a little more specific? What kinds of costs would Canada be looking at?
Professor, Department of Economics, University of Alberta, As an Individual
There have been all kinds of estimates for costs for measures of this kind. As you know, the national round table has looked at this. More recently, the Pembina Institute and the Suzuki Foundation have looked at this and come up with different types of cost estimates.
The point I'd like to make, which doesn't come out very often in this debate, is that the cost of acting depends on the measures you choose to do the action. So pick a target, any target. You can generate all kinds of cost estimates. If you do silly things to try to reduce emissions, it's going to be very costly because you're not going to be getting a lot of bang for your buck.
It seems to me we're really focused on this one-to-one relationship: here's a target, here's the cost. I would say to you there's an intermediate step. The choice of mechanisms or the policy instruments you're going to use to achieve the target are really important in determining the cost. We don't have that discussion often enough.
Associate Professor, Department of Economics, University of Ottawa, As an Individual
I will argue in the same direction. As I said in my speaking points, assessing the costs of any greenhouse gas reduction policy is something that is difficult to do without knowing what exact policy instruments you have. Usually I receive the question: what is the cost of doing this, what is the cost of doing that? I can't provide any answer if I don't have some additional information about what the policy instruments are that are going to be used and the costs related to the policy instruments. Especially, how do you recycle the revenue?
In terms of the cost per se, usually when you look at it from a GDP perspective, this is something that might seem relatively low. The reason is because our GDP, for example, is more than 60% of the service sector, and the service sector is not the one that is emissions-intensive.
As I said in my speaking points, we do have heterogeneity among the sectors. There are some sectors that will be affected more than others, so we shouldn't look at the GDP aggregate impact alone, but also we should take into consideration the sector impact, which will have some implications for jobs, regions, and so forth. This is what the modelling results all tell us.
Liberal
Justin Trudeau Liberal Papineau, QC
Thank you very much, Chair.
One of the things that has been an underlying statement and theme running through this testimony is that without being able to quantify it, we are aware that the cost of doing nothing will be extremely high. Now, how high it will be and what it will look like, obviously, is something we need to watch unfold, but there is an awareness that if we don't do anything, the economic impacts will be huge.
This is why I take a little bit of issue with Mr. Calkins' presentation and question around the perils of capital flight versus the perils of not reducing global emissions. That's because the emissions we are going to be seeing as a cause for the melting of Arctic sea ice, the climate extremes we're going to be facing, the various consequences of a two degrees or more increase in global temperatures means that the priority needs not to be keeping business as usual for as long as we possibly can, but addressing this grand issue and this grand challenge in a way that is going to lead to maximal economic prosperity for, in our case, Canada. That's what we're talking about trying to get.
I think balance needs to be brought back in. We have to look at reducing emissions on a global level. The emissions that come from China, the emissions that come from Russia will affect us here, and therefore we have to be open to reducing the emissions in the most efficient way possible.
I like very much one of the things you've said, that targets are all well and good, but it's the intermediate steps and how we get there that we need to start talking about and looking at.
The discussion we're having around Bill C-311 is very much looking at 25% below 1990 levels. We've heard testimony that the 20% reduction from 2006 levels is in line with returning--more or less, give or take 3%--to 1990 levels.
So my question is--even given the modest targets that the Conservative government has put forward for returning to 1990 levels of C02 emissions over the past four years--have C02 emissions in Canada decreased or increased?
Associate Professor, Department of Economics, University of Ottawa, As an Individual
From the last information from the Government of Canada website, there was a slight decrease between 2003 and 2007. But there was a peak of emissions recently. We are still waiting for the latest emissions data.
We would expect that because of this recession—the recession itself is emissions reducing—we will probably have a reduction in emissions.
Liberal
Justin Trudeau Liberal Papineau, QC
Thank you.
Are the measures this government has brought in, concordant to the targets they've proposed over the past four years and the measures to be brought in within the next few years, in your opinion, going to get us on a path towards decreasing successfully to 1990 levels in ten years? You were looking at the cost of decreasing below 1990 levels by 20% and 25%. Are we on track to decrease our emissions to 1990 levels, according to their projections?
Monsieur Plourde.
Professor, Department of Economics, University of Alberta, As an Individual
The work that I've seen since the Kyoto Protocol was signed suggests that none of the plans put forward by any of the governments would get us there. This is true about this plan, as it was true about previous plans. I think we're not understanding what level of effort is required to get us to emissions reductions.
If the question specifically is whether we are on track to return to 1990 emissions, given the policy instruments in place now it's hard to make a case that we are.
Liberal
Justin Trudeau Liberal Papineau, QC
One of the things that disturbs me a little is that we've spent an awful lot of time talking about this private member's motion that has ambitious targets that are very much in line with some of what science is telling us, but so much political capital is based on negotiating whose targets are better, more realizable, and how we're bringing it together that unfortunately we're not talking nearly enough about that intermediate step of how we're going to get things done. Is that, to your mind, a fair assessment?
Professor, Department of Economics, University of Alberta, As an Individual
I think it's a fair assessment. However, I do think that in the establishment of a target you have to know where you're going before you start putting a lot of measures in place. That's why I see this as a necessary step. Where do we want to get to and in what kind of timeframe? What's needed to get us there cheaply? I'm a cheap guy. You have to understand that as an economist, I'm trained to be cheap.
Conservative
Conservative
Jeff Watson Conservative Essex, ON
Thank you very much, Mr. Chair.
Thank you to our witnesses. I'm getting a little chuckle out of your last comment, Mr. Plourde.
I'll ask a consistent question with respect to the bill. What is the cost of implementing C-311? I think the answer is that it can't be costed because there hasn't been a specific policy pathway chosen. Would that be a fair assessment?
So this is a bill about a target. You have said, Mr. Plourde, that settling on the target is the proper starting point--
Conservative
Stephen Woodworth Conservative Kitchener Centre, ON
On a point of order, if I may—I apologize to Mr. Watson for interrupting—I saw the witness shaking his head yes, in answer to Mr. Watson's comments. I think it would be good to get his answer on the record.
Conservative
Stephen Woodworth Conservative Kitchener Centre, ON
The question, as I understood it, Mr. Chair, was that the bill we're talking about can't be costed because it doesn't contain any pathway of domestic emission measures whatsoever. I think the witness was shaking his head yes.
Conservative
The Chair Conservative James Bezan
Mr. Watson, that's a point well taken. We'd appreciate the answer on that for the record.
Professor, Department of Economics, University of Alberta, As an Individual
As I said before, without identifying how you're going to get there, it's very hard to put a definite number on this. We could design alternative ways of getting there and cost each one of them, but you can't do this right now.
Conservative
Jeff Watson Conservative Essex, ON
In other words, to the question that you can't cost C-311 because it doesn't have a specific policy pathway, the answer is yes. Is that correct?
November 26th, 2009 / 12:35 p.m.
Professor, Department of Economics, University of Alberta, As an Individual
Yes.
Conservative
Jeff Watson Conservative Essex, ON
So this is a bill about a target. It's a target that I think you alluded in your testimony is not credible; it may not necessarily be achievable. It's certainly not one that's aligned with the United States.
The Government of Canada's target roughly translates to about minus 3%, 1990; and the target for Bill C-311 is minus 25%, 1990. As I understand from speaking with some people last night, the U.S.'s 17% to 20% below 2005 translates into something just less than 10%, or minus 10%, 1990.
When we're looking at alignment with the United States and a credible target, this bill doesn't put us in the realm of credibility from the starting point. Is that correct? Is there some agreement on that?
Professor, Department of Economics, University of Alberta, As an Individual
My answer to that would be that based on the level of effort that we've done over the last 12 years, this is something that requires a fundamental change in the way we think of climate policy in Canada to get there.
Is that a fair answer to your question?
Conservative
Jeff Watson Conservative Essex, ON
You've established credibility both in terms of reachability, first of all, and, second, in terms of alignment with the United States. Those are some of the parameters you've laid down in your testimony today. In that respect the target we're talking about in Bill C-311 is neither credible nor aligned with the United States.
Professor, Department of Economics, University of Alberta, As an Individual
In 2020 the target in Bill C-311 is more ambitious than in the U.S., but in 2050 the differences are minor.