Environment Committee on Jan. 30th, 2019

[Joanna Kyriazis]

Yes, the Paris targets are absolute targets and the goal is to reduce our absolute emissions. Carbon pricing is an effective solution. It's not the only solution we need, so a package of policies similar to the package that the federal government is pursuing under the pan-Canadian framework and more, are necessary to meet our Paris climate target.

[Ed Fast]

Thank you for saying that a package of policies is required. I totally agree with you.

Our beef, of course, with the current government is that they have said that the one policy you have to have is a carbon tax, that all the other policies are optional and every province can come up with its own policies, but they have to have a carbon tax.

When I look at the experience in British Columbia, I see it's quite contrary to what you have suggested and it is in line with the fears that Mr. Myers suggested, that is, you bring in a tax and taxpayers are worried that tax is going to be ramped up and up, and of course the rules have changed and it's no longer revenue neutral.

I have a question now for you, Mr. Bergamini and Mr. Tauvette.

You suggested that fleet upgrades have been made to improve fuel efficiency to a point where you're now at diminishing returns. What drove these upgrades? Was it a carbon tax or was it something else?

[Massimo Bergamini]

It's simply a question of survival.

[Ed Fast]

Survival.

[Massimo Bergamini]

I mean, it is an—

[Ed Fast]

You didn't need a carbon tax to incent you to get this done.

[Massimo Bergamini]

No.

[Ed Fast]

All right.

I think I heard you mention two solutions and one was a carbon offset model. Tell me what that looks like.

[Massimo Bergamini]

That would look like.... In fact, we proposed that our industry be allowed to opt into the output based model that has been made available to stationary emitters, or some other model that would allow us to operate in a manner that is aligned with the international model and would allow us to contribute to real carbon reductions through offsets.

We want to do our part. We believe that carbon pricing from a societal perspective and a good corporate citizenship perspective is essential today. We're ready to do our part, but we're not ready to be dragged into a process that will damage our industry, will damage competitiveness, will lead to—

[Ed Fast]

I understand.

Could you provide our committee with a bit of a sketch—you don't have to do that now—

[Massimo Bergamini]

Yes.

[Ed Fast]

—supplementary to your appearance here today, with an idea of what those offsets might be, at least the ones that might work for your industry? It's not only your industry. We've heard from the refining industry. We know the cement industry is in deep. They've been provided with a bit of a different treatment than you have.

[Peter Boag]

Ninety-five per cent.

[Ed Fast]

There are other industries that are looking for a way of addressing their emissions that doesn't involve a carbon pricing model that undermines their competitiveness.

The final question for you is this. You also mentioned a low-carbon fuel future which is going to require technological advancement to get to those fuels. Could you expand a bit on that?

[Geoffrey Tauvette]

We need a fuel that's a drop in fuel, so it has to look like jet fuel, but what we're targeting is a lower-carbon fuel, obviously. That's a big part after our offsets. We need biojet to help us reduce our emissions. It's three times the cost, so we need some help to get there technologically and with policy.

[The Chair]

Thank you.

Mr. Bossio.

[Mike Bossio, Liberal, Hastings—Lennox and Addington, ON]

This is great discussion with our panellists. Thank you all so much for being here today and providing your expertise to this conversation.

I'd like to start by following up on Mr. Fast's comments just now on B.C.

You're familiar with Australia's experience with the price on pollution and pricing carbon. Australia put a price of $23 on pollution in 2012-13, $24.15 in 2013-14, and then they revoked it in 2014.

I have a graph here. I don't know if you can all see it. You'll see where this bar is here. This is when the price on pollution was actually in place. You can see, even with a relatively small price on pollution over a short period of time, the actual impact that price had on reductions of emissions in Australia. Then after revoking it, not only does it not stay on the curve that it was on prior to the price, but it actually overshoots that curve.

I point that out and, Ms. Kyriazis, you can help us here.

Is this really a good, clear indicator of what you were talking about earlier about the effectiveness of a price on pollution? It's a really great example of what can happen when you have it and what can happen and just how enormous the change can be when you revoke it.

[Joanna Kyriazis]

I'm familiar with that graph, and it is very effective.

To go back to the B.C. example, from 2012 to 2016 the carbon price was frozen. That also had an impact on whether emissions were rising.

A well-priced carbon price that increases predictably over time is going to be the most effective instrument in reducing emissions, as well as offering the policy and price certainty that businesses are looking for and consumers are looking for.

[Mike Bossio, Liberal, Hastings—Lennox and Addington, ON]

To follow up on that, we have tried regulatory measures. We've tried voluntary measures. We tried Kyoto. We've been talking about this for a generation now. None of those have worked, yet we show very clearly that this does work, but it's not enough in and of itself.

Would you agree that the balanced approach that we're taking of having a price and a rebate and having investments in transit, investments in innovation, investments in making our corporations and our society more productive overall, and regulations and emissions controls really provides a basket? We're taking more than 15 different measures to actually deal with climate change. That is the balanced approach to take, so that it's an evolution towards meeting our targets, not a revolution.

[Joanna Kyriazis]

Yes, carbon pricing is a key part of a policy package, as I've said, but some of the other policies that the federal government is pursuing: the clean fuel standard is a very important one; methane regulations that were introduced; the coal phase-out; and in addition, the large investments that are being made in grain infrastructure, transportation and clean technology.... It's important to approach this problem from multiple angles.

[Mike Bossio, Liberal, Hastings—Lennox and Addington, ON]

Also, looking at innovation, you're saying that a price on pollution can innovate.

One very interesting innovation that happened in B.C. is by a company called Carbon Engineering. They're taking carbon from the atmosphere to create fuel that can be burned in any vehicle, including aircraft, so it's a zero-carbon fuel. As far as innovation around the airline sector, would it not make sense that once again driving that innovation they could use carbon-neutral fuel?

[Joanna Kyriazis]

A carbon price, as well as the clean fuel standard, are both steps in the right direction in incentivizing lower carbon fuel alternatives, biofuels. What I'm hearing from my fellow witnesses here is that we need more solutions, more technology, more support for them in their emission reduction goals, so these policies are somewhat—

[Mike Bossio, Liberal, Hastings—Lennox and Addington, ON]

Sorry to cut you off, but finally, to deal with Mr. Sopuck's assertion that CO2 is not a pollutant, were you aware that the previous government ruled under CEPA 2012 that CO2 is a pollutant? I think if you refer to most scientists around the world, they would agree with that assertion.

[Joanna Kyriazis]

Yes, I was aware and I agree.

[Mike Bossio, Liberal, Hastings—Lennox and Addington, ON]

Thank you so much.