Evidence of meeting #128 for Environment and Sustainable Development in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was tax.
A recording is available from Parliament.
Consultant, Drexhage Consulting, As an Individual
It really is all of them. I think we need to have a much more nuanced and mature discussion around that, frankly, in this country.
Deputy Director, International Environmental Law, Centre for International Governance Innovation
I would just add one thing.
If you look at the Paris Agreement, article 6 deals with ITMOs. That's one article. There is an expectation, I think, that every country will put in its suite of activities and its nationally determined contribution, and that those will be varied and include regulatory provisions governing different aspects of how emissions are generated in those various countries. In that sense, I think you have to look at both areas.
Frankly, for pricing, I'm not an economist. I'm a lawyer, so I understand the regulations better.
Liberal
Mike Bossio Liberal Hastings—Lennox and Addington, ON
Silvia, you also talked about the subsidies on green technology. There are many different examples that are effective and are being utilized by different countries around the world. Can you give us some examples of what would be the most efficient and effective subsidy mechanisms that could be used to increase the use of green technology?
Deputy Director, International Environmental Law, Centre for International Governance Innovation
Coming back to the point that I'm a lawyer and not an economist, I'm not sure that I can give you examples of the most effective ones. I can give you some guidelines on some of the things that you shouldn't do when you're designing a subsidy.
One of those is not to add local content requirements onto it. If you add a requirement that we have to use domestic equipment or hire domestic employees, that is likely to bring a challenge on that particular subsidy. It would be very difficult, without a revision in the subsidies agreement, to include local content requirement—
Mr. John Aldag (Cloverdale—Langley City, Lib.)
I'm sorry to cut you off there.
Mr. Lake, we'll go to you.
Edmonton—Wetaskiwin, CPC
A couple of meetings ago, we had the Pembina Institute and Greenpeace here. We asked if we are on track to meet our Paris Agreement targets. Right now, as it stands, is Canada on track to meet its Paris Agreement targets? The Pembina Institute talked about a 66-megatonne gap and Greenpeace said that the gap is actually larger than that right now.
I'd like each of you to weigh in on that, and then Joël is going to take the rest of the time.
Deputy Director, International Environmental Law, Centre for International Governance Innovation
I would indicate that my expertise is not in that. I've been reading the media and looking at the charts as well. It doesn't look like we're on track, but our commitment under the Paris Agreement is for 2030. A lot can happen in 12 years. I would not be ready to say that we're not going to meet those targets.
Edmonton—Wetaskiwin, CPC
That's one of the reasons why I phrased it as “are we on track to meet the targets?”, not whether or not will we meet them. Right now, are we on track?
Deputy Director, International Environmental Law, Centre for International Governance Innovation
I think it depends on when the impacts of some of those regulations kick in. I'm not sure we can totally predict that at this time.
As an Individual
My understanding is that we're definitely not on track. If this is the status quo from now until 2030, we miss the target. We would join I think virtually every other signatory to the Paris Agreement in that.
I think that gets to the complexity of the problem and the fact that the kinds of steps we would need to take to be on track today are simply not ready to go politically—and sometimes technologically—but we also don't get any closer to those targets unless we start moving as fast we can right now. I think that's the thing to keep.... The fact that we are not on target is not a reason to not continue to push in that direction.
Consultant, Drexhage Consulting, As an Individual
My only comment would be that it's sort of difficult to determine what part of the plan you want to include in making that estimation of being “on track”.
Let me give you the example of what Chris was referring to. Where we have a huge advantage is our electricity grid. Again, it was under our previous environment minister.... I'm sorry, but his names escapes me. He had an unfortunate airplane accident.
Consultant, Drexhage Consulting, As an Individual
Yes, it was Jim Prentice. He was the first one to actually pose the challenge of 90% renewable by 2030. That's a bipartisan, bi-party commitment. The current environment minister has made the same commitment. If we show a recommitment towards that, to the electricity grid of 90%, I think we'll be making a very strong indication that we're getting ourselves more on track than we ever have in the past.
Conservative
Joël Godin Conservative Portneuf—Jacques-Cartier, QC
I'll take over from here.
I want to thank you for being here and for your patience and understanding.
As I said earlier regarding the motion, I'm here to make a difference for the environment and for Canadians. According to the information that I have on hand, Canada's Ecofiscal Commission estimates that approximately 5% of the Canadian economy would be exposed to competitive pressures if the price were $30 to $60 per tonne of carbon equivalent. This constitutes a loss of about 7%. This is called carbon leakage.
I made a rule of three. At $30, we would lose 5%, and at $60, we would lose 7%. At $100, we would lose 11.66%, and at $200, we would lose about 25%. Lastly, at $350, we would lose over 40%. Experts say that an effective carbon tax must be very high, in other words, between $300 and $350. We're currently implementing mechanisms to control climate change and reduce greenhouse gas emissions. However, don't we risk losing up to 40% of our investors and businesses? I'm convinced that there are other ways, and I've heard you say the same thing in your comments.
Is my view realistic? My question is for you three.
Consultant, Drexhage Consulting, As an Individual
I'll take it first.
Yes, you're giving a reasonable explanation. Those are typically the costs and prices that are bandied about. I guess what I'd hasten to add is that you have to start somewhere. By beginning to put in a price and designing it correctly, hopefully things can get ramped up and it will give enough of the signals.
Part of our problem is that we want to solve everything right from the get-go, before actually taking some meaningful first steps to begin to get us on our way.
You mentioned before how Germany had looked at it for 30 years. I was actually the pen—I was a civil servant at the time—of Canada's first national action program in 1994. The fact is that we have not really come a heck of a lot further in terms of actual implementation since then. I would just like to really see some constructive first steps to take us on our way, instead of trying to provide an overall, comprehensive solution right off the bat in order to make anything happen.
Thank you.
Mr. John Aldag (Cloverdale—Langley City, Lib.)
We're going to jump over to Mr. Peschisolido. We should get our last two in.
Joe Peschisolido Steveston—Richmond East, Lib.
That would be nice.
Thank you, Mr. Chair. Thank you to our guests.
Mr. Turner, I haven't read your books yet, but I look forward to them. However, I was re-reading The Ecology of Commerce by Paul Hawken, which I first read about 12 years ago. What struck me is that he talked about both the ecology of commerce but also the commerce of ecology, and the whole notion that you have to develop a system that is environmentally friendly but also plays into the desires and the needs of people. You have to tie in capitalism to an environmental movement, basically transitioning from one to the other and using the mechanisms in capitalism for an environmentalism.
Can you comment a bit on that? Taking Mr. Fast's approach in terms of focusing on the topic at hand—international leadership—can you comment on how Canada as a country has dealt with those things, combining the market and environmental stewardship?
Mr. Drexhage and Ms. Maciunas could comment as well.
As an Individual
Given that the topic at hand is the pan-Canadian framework, one of the things I think is encouraging about it is that in addition to the price on carbon we've been discussing, it has all of these measures that are intended to do things like free up and encourage capital to flow towards businesses that are innovating in this sector. That's not just someone coming up with some wild new storage solution or an electric car or something like that. It's also through oil sands companies that need to cut their emissions anyway, which they are actively and strongly pursuing as we speak, that those technologies will have an opportunity to develop and reach international markets.
Some of the really good first steps are there. As I said in my opening comments, it is my understanding, from people who are much more well-informed than me on this, that where Canada tends to not do well on that kind of technology development is in getting.... You saw this with the dot-com boom and the information technology boom before it. We come up with amazing ideas and they get capitalized and turned into huge companies elsewhere. I think some of the stuff—certainly, for example, that my colleagues at the Smart Prosperity Institute talk about a lot—is the kind of mechanisms alongside the pan-Canadian framework and some of the stuff in it that could be brought in that would help to get these Canadian companies.
One that I know of, basically out of a personal connection, is a company called CarbonCure out of Halifax. What they do is reinject CO2 back into the concrete production process. They just got a pile of money from Bill Gates' venture capital firm. They've gotten some money from the federal government. This is exactly the kind of company—I don't want to go down the road of picking winners and losers—that the pan-Canadian framework is trying to make a globally competitive company in a whole new marketplace that barely exists yet. I would say that's the piece of it that we're still figuring out.
Steveston—Richmond East, Lib.
Mr. Turner, thank you.
Do you have anything to add?
Deputy Director, International Environmental Law, Centre for International Governance Innovation
I would come back quickly to the topic I was discussing earlier, which is that when we're looking at solutions for climate change we also have to look at the international rules that govern what we do. If we're talking about international leadership, there are other areas we can also get engaged in internationally. I think we have to a certain extent, like in reducing HFCs under the Montreal protocol, like working with the people who are doing short-lived climate pollutants. I think people have estimated there's half a degree to be saved if we could get some sort of agreement there that would work.
I think we have to look broadly at the kinds of things we could do that are consistent with the kinds of approaches we take as Canada.
Consultant, Drexhage Consulting, As an Individual
I just wanted to offer a personal observation.
What I'm doing with the World Bank is actually looking at scenarios for the low-carbon global future and what it will mean for the minerals and metals commodities markets. Nobody has stopped to think what wind turbines and solar energy storage batteries and all these electricity systems are actually made out of. There are very significant opportunities in the commodities market in copper, in zinc, in silver, in nickel, in rare earth, where these things are going to explode in demand over the next 10 to 15 years.
There is another perfect niche for the Canadian economy preparing itself to supply those technologies. That's just to give you an example.
Steveston—Richmond East, Lib.
Mr. Turner, you mentioned briefly electric cars. About a year or so ago I made an announcement for a company on Annacis Island, in Richmond that has a prototype for a charging station for electrical buses. I think that's the type of thing we have to push forward in order to transition from our economy today into a new, more sustainable economy.
Are there other policy initiatives like this that look at a systemic change to how we function in our economy?
As an Individual
I would defer to my much more experienced colleagues. Smart Prosperity Institute in particular has issued piles of reports looking specifically at the strengths of the Canadian economy and how they fit with what we believe to be some key components of this emerging global clean-tech economy, and how to pair those up.
It is finding that it may not be manufacturing Teslas. It maybe building components for charging stations. There's a B.C. company that's building the batteries for electric ferries, for example. They signed a huge contract with Norway recently.
I think some of that work has been done. It's not my specific area of expertise.