Thank you, Mr. Chair.
Thank you so much for having me here today.
My name is Keith Stewart, and I'm a senior energy strategist with Greenpeace Canada. I've previously worked with World Wildlife Fund, the Toronto Environmental Alliance and some other environmental groups. I am also a part-time instructor at the University of Toronto, where I teach a course on Canadian energy and environmental policy.
I wanted to directly address the questions that the committee put forward, with regard to the three areas, and then add one more area, where I think Canada really could show some interesting international leadership.
First, with respect to climate finance, Greenpeace Canada is part of, and supports the recommendations of, the Green Budget Coalition. If you haven't seen them, they will definitely soon be appearing in all of your inboxes in English and French.
We have very detailed recommendations there, but these are the highlights.
Under the Paris Agreement, the industrialized countries agree to mobilize $100 billion a year in the 2020 to 2025 period for climate finance. A fair share of that has been calculated to be about $4 billion for Canada. Currently, we've committed $800 million for 2020. We see a gap there. We'd like to see Canada doing more.
The Green Budget Coalition proposes innovative sources of financing for this. In particular, a levy on bunker fuels for international shipping or international aviation would be one way to raise this money, as could a financial transaction tax. There's a variety of ways to do it. It could help Canada deliver on that commitment.
We would also add that the details of finance are really important, as always. The funding needs to be new and additional, not just redirecting existing aid funding by sort of renaming it without increasing the overall size of that pie.
We think there needs to be a balance between adaptation and mitigation: money being spent to reduce greenhouse gas emissions versus money helping poor countries adapt to those changes, which can't be avoided at this point. It should be in the form of grants, not loans.
The second is with respect to internationally transferred mitigation outcomes, which is basically buying greenhouse gas reduction credits for other countries. This originally came out within the international system around the Kyoto Protocol in 1997, when some countries had emissions reduction obligations and some did not. You had annex I and annex II countries.
We now have every country in the world undertaking emissions reduction obligations. Much of the intellectual argument in favour of offset systems, where you're funding stuff that wouldn't have happened otherwise, I think a lot of that no longer exists or is not particularly compelling. Every country in the world has basically agreed that they have these commitments to reduce.
There's a moral and reputational risk involved in these types of credits. It's very difficult to ascertain that these ITMOs are real and additional, and that these are reductions that wouldn't have happened in the absence of this money being found. That has been one of the major criticisms. There have been a few cases of some scams that have been run. Even though those are a tiny percentage of the overall system, it can actually throw the entire thing into disrepute. I think we all know that these things sometimes get blown up.
When it comes to meeting our international obligations, meeting the Paris targets, we should aim to achieve all of the reductions we have committed to, in terms of the 30% now and any additional amount that we commit to under the ratcheting up principle. Existing commitments by national governments are not sufficient to achieve the objectives of limiting global warming under the Paris Agreement.
We should try to achieve all of the reductions that we commit to under our nationally determined commitment in Canada. Internationally traded credits should be really viewed as icing on the cake, going further to help things go faster.
With the exception of the WCI system, because that's in existence right now, Quebec is still a part of that market. I'm encouraging the Ontario government to rejoin that system, but I don't think I'll be successful. I think the credits are fairly well monitored and well policed. Given that we've already entered into agreements there, I'm not necessarily saying that we should back out of that, but I don't see ITMOs as a primary plank of climate policy going forward.
Third, on trade and climate policy, Greenpeace, along with many other environmental groups, has put forward eight full planks in terms of what would make for a good trade agreement from the perspective of the environment. I can share that with the committee. The basic test for any trade agreement should be, does it support, and not undermine, a more stable climate? Does it contribute to clean air and water and to healthy communities? Does it respect the rights obligations to indigenous peoples and to reconciliation, etc.? Does it create good jobs?
When you look at the USMCA—or whatever we're calling it, NAFTA 2.0—there is a positive element there, which is the elimination of the chapter 11 investor-state dispute system. It has been used to attack or challenge environmental regulations in Canada on numerous bases, arguing that companies should get compensation for lost profits, which has had a chilling effect on broader environmental policy. If you're worried that it's not going to pass this test, you won't do it. The fact that it is no longer in the agreement is actually a good thing.
On the counter side, I think the environmental chapter is in the category of “It would be nice if these things happened” and not “These things must happen.” For trade agreements, I think that we need to actually have climate change put front and centre and actually have enforcement teeth that are as strong on the environment side as they are on the trade and corporate protection side.
Overall, those are the kinds of things that we aim for.
One of the questions from the committee was, how do we minimize carbon leakage? I would say that the path forward there should be to simply apply carbon tariffs at the border that are equivalent to a carbon price charged in the domestic market, so that no one can gain an advantage by relocating manufacturing to an area or a jurisdiction without strong climate protection and then exporting into the Canadian market where we do have that. A carbon tariff would be a way to solve that problem.
In terms of the way the government can encourage pension funds and other institutional investors to play a greater role in supporting green finance initiatives, here I point to the work of Mark Carney and Michael Bloomberg. I don't think it's particularly common for Greenpeace to side with the titans of finance, but when you look at the work of the task force on climate-related financial disclosures.... The recommendations the task force put forward were proposed as voluntary measures, because that's the mandate they were given. If Canada were to make those mandatory—and we've had extensive discussions in Ontario with security regulators here—it would actually go a long way toward achieving your objective there.
Having greater disclosure of climate risk and opportunities, and making that mandatory, would also include requiring companies to disclose whether their business strategy is aligned with achieving the Paris Agreement climate targets. If not, what would they have to do to bring it into alignment? Is what you're doing consistent with a safe climate future? If not, what would you have to do differently? You have to tell your investors that, so they have that information and they know whether or not you're at a risk of stranded assets. It's these types of measures.
Now I'll turn to something that wasn't on your agenda, but I think it could be. There's an opportunity for leadership for Canada in terms of acting to restrict the supply of fossil fuels. Canada is one of the largest exporters of fossil fuels in the world. You can look to countries like New Zealand, which has said that it is going to prohibit new exploration for oil and gas and new expansion. We need to stop expanding fossil fuel infrastructure and start investing all of that money in those alternatives. We know that we won't phase out fossil fuels tomorrow, but we need to stop building new stuff today and develop a plan for a just transition off fossil fuels.
Thank you so much for your time. I'd be happy to answer any questions you may have.