Thank you very much, Mr. Chairman.
I think it's entirely appropriate that we follow the order that we did.
I originally hail from Edmonton, Alberta. I worked on issues relating to climate change and sustainable natural resource development for over 25 years with a wide range of interests. To mention a few, I worked with the Government of Canada, the International Institute for Sustainable Development and the International Council on Mining and Metals. I currently work with the World Bank and the Canadian Council on Renewable Electricity.
I consider myself a progressive pragmatist who has been characterized by environmentalists as crossing the aisle and suspected by many parties in the extractives industry of concealed intentions. So be it.
In this intervention, I will focus on the issue of internationally transferred mitigation outcomes, ITMOs, and Canada’s implementation of this key provision in the Paris Agreement. In that capacity, I represent no one but the person who sits before you here.
“ITMOs” represents the latest buzz phrase for internationally based carbon market mechanisms, the idea being that entities, whether they are governments, business or civil society, have the option to meet greenhouse gas emission targets, and by the way also help to promote clean technologies, by investing in reductions overseas.
One would think that Canada would have taken advantage of such an option, given the nature of its resource-based economy and the challenges therein to meet our climate commitments, but such is not the case.
Why? In my view, the most significant barrier is conceptual and/or cognitive. There is a history of misperceptions around the issue of international emissions trading in Canada, and this has been the case for over 20 years. Many in the environmental constituency perceive international purchases as lacking in environmental integrity and as burdening entities outside of Canada with emission reductions when the onus should lie on the large polluters at home.
On the industry side, there are concerns that public funds will go towards purchasing so-called emission credits to meet international commitments rather than use those funds towards supporting greenhouse gas reduction technologies and practices at home. This is also a concern shared by many provincial governments that ITMOs should not represent the competitor or drawer on funds that might otherwise support domestic actions and policies to address climate change. What is lost in these objections is that this flexibility will always be key for Canada to be able to meet whatever greenhouse gas reduction targets it may take on.
Norway is instructive in that regard. Its economy is even more reliant on fossil fuel exports than Canada's, yet it takes on and implements much stronger climate actions and targets both at home and abroad. A key part of that is their willingness to invest in strong, credible greenhouse gas reduction and sequestration projects beyond its national borders, helping them to reach their targets and to share expertise and know-how abroad, thereby helping their burgeoning clean energy industry and building capacity in other countries to do so.
Simply put, ITMOs can be developed and implemented in such a way that they work to support and complement the domestic development of green technologies, policies and practices in becoming a central feature of Canada’s economic and development future.
Specific criteria to develop an ITMOs regime in Canada would include the following. It clearly avoids any potential for double counting of greenhouse gas reduction credits or allowances. It promotes Canadian expertise and technologies in the green export market. At the very least, it effectively addresses any potential conflicts with UN sustainable development goals, and preferably, demonstrates ways in which it promotes sustainable development goals in host countries. It should be developed in close collaboration with the provinces. The decision in that respect of the CCME and the pan-Canadian framework to address article 6 together, not as a federal initiative but clearly and truly as a federal-provincial initiative, is a very positive step in that regard.
Implementing ITMOs at home would provide tangible benefits. It provides Canada a means to ensure that it meets this country’s Paris commitment. This is a critical issue, as Canada has not met its international climate change commitments on four previous occasions, and I hasten to add that those targets were established under both Conservative and Liberal governments. Even more importantly, it provides an opportunity for the export of relevant Canadian technologies, practices and expertise that will further strengthen the development of a green economy model throughout Canada and globally.
I already spoke to you about Norway. I would like to bring in another example. One need only look to Japan and the model they have developed under the joint crediting mechanism. Working closely with industry, they have successfully invested in greenhouse gas reduction opportunities that also work to promote real economic opportunities.
There are some who argue that ITMOs be applied in future years of the pan-Canadian framework and that its first focus should be towards greenhouse gas emission reductions within Canada. Yes, that may be one option, but in my view it smacks of desperation, and as such would almost certainly become politically contentious: We've tried everything else, so let's try this one last saver called ITMOs. Much more preferable is an approach as laid out above—a strategic investment that is developed in support of and complementary to domestic actions, which will also help the federal government to close its emissions gap.
Finally, it should be noted that Canada has been a leader in the negotiations around article 6 of the Paris Agreement and ITMOs. In that respect, once a comprehensive elaboration has been agreed to internationally—hopefully at the next upcoming talk in Poland—it is incumbent that credible and robust systems are put in place. Canada has a unique opportunity to show leadership in this area by demonstrating that international actions to address climate change that also work to help countries meet their emission commitments are a critical way forward, as countries look for ways to accelerate commitments to reduce greenhouse gas emissions globally. When it come to domestic actions and international credits, it is not one or the other. It is one and the other.
I also have thoughts around what a Canadian ITMOs architecture might look like, and if the committee is interested, I could send those in a separate submission.
Chair, thank you for your time.