Mr. Speaker, I am very pleased to have the opportunity to contribute to this important debate on greenhouse gases and climate change.
I am one who believes that greenhouse gases are a threat to our planet. The balance of probabilities indicates that we should be taking action. The risk of inaction is just too great. We really cannot put this problem off into the future. We have to deal with it now.
The questions for me are how we improve our environmental performance with respect to greenhouse gases, at what pace we proceed, and how we implement these policies without negatively impacting our industries and our competitive position.
Reducing greenhouse gases is a very complex global issue. It involves matters of public policy. It involves matters of scientific and technical research. It is a very politically charged issue as well.
As with most issues of public policy we would generally ask the following questions. If we make a public policy change who loses and who wins? Are there winners and losers? Is it a win-win or is it a lose-lose situation?
If we look at the question of climate change and greenhouse gases we clearly cannot measure all the benefits. Nor should we try. We cannot really deal adequately with the benefits of a climate that is more stable, that minimizes the frequency and the severity of natural disasters, and that avoids the severe impacts on agriculture and other negative consequences of dislocation which climate change can cause.
These are some of the benefits of addressing climate change but there are other benefits as well. One that has been brought to the attention of our natural resource committee relates to insurance costs. Insurance premiums that cover natural disasters are getting to be totally out of hand and quite unaffordable. If we do not deal with greenhouse gases insurance premiums will become astronomically high and force our businesses and taxpayers generally to deal with a very difficult problem.
There are benefits such as that but some have argued there are other benefits. If we deal with climate change we will create a large movement in technology development.
The argument which has been repeated in the House goes something like this. If we set aggressive targets for greenhouse gases new technologies will help us reach our goals. The argument continues with the thought that as these technologies develop in Canada new industries and new export possibilities will be created. We will be able to sell and license these environmental technologies abroad.
I have oversimplified the argument but basically that is the essence of it. I hope it comes true. I am sure a lot of this will happen.
We should also ask ourselves what happens if these technologies do not materialize What happens if they do not meet the test of being commercially viable? We need to contemplate these possibilities as we negotiate greenhouse gas emissions. We need to have a fallback position. We should only bet on those technologies that are proven today and have been demonstrated to have commercial viability.
At the same time we can do a better job of removing obstacles and creating the right policy and tax environment, favouring the development and commercialization of environmental technologies. The agreements we reach in Kyoto must be achievable. We know from the Rio experience that targets must be realistic and achievable. To do this in Canada we need to do a few things.
First, we need to agree on realistic targets. Second, we need to obtain the commitment of all stakeholders, and that includes all Canadians, to achieve these goals. Third, we need to provide and refine economic instruments to create the right incentives and the right market signals to industry to improve our greenhouse gas reduction performance.
The economic instruments referred to are generally classified in two broad areas, non-tax instruments and tax instruments. In the area of non-tax instruments we have heard a lot about tradable permits for emissions trading.
Although it is a complex issue it boils down to a very simple scenario if we assume we have a certain jurisdiction, oversimplify it and make it hypothetical. There are two plants, two factories, and to reach certain greenhouse gas targets those plants together are allowed, say, 1,000 units of emissions. One plant is allocated 500 units and the other plant another 500 units of emissions. One plant is able to achieve the target, in fact exceed it and perhaps reduce it to 300 units of emissions. The other plant is having difficulty with achieving the 500 units and will be over by 200 units.
What happens is that the plant that will be over buys the surplus capacity the other plant will not utilize to meet the reduction targets. There is a consideration. One plant pays the other to buy its unused emissions target. This places a market value or opportunity cost on the cost of not being able to comply with the emissions targets.
It has some interesting possibilities. Although it is not a long term solution it provides some phasing of the problem. It allows companies and other creators of greenhouse gases some opportunities to step up to the issue.
We do not have much experience with tradable permits. The United States has some. We really do not have a lot of experience to draw on. It is something we should be looking at and seriously considering. Whether we could apply emissions trading on a global context is more of a challenge.
I am not sure it is workable in the short run, but it is something that perhaps is a target to look at. I mention that as one non-tax instrument. There are others. There are voluntary measures.
I am not sure over the last number of years that voluntary measures, unfortunately, have really done the job. I say unfortunately because I know there are many companies that have worked very hard at improving their environmental performance with greenhouse gases.
I can think, for example, of the industry that I came from, the forest industry, the pulp and paper industry. If we look at the greenhouse gas emissions in 1995 for the Canadian pulp and paper industry, they have been reduced by 20% from 1990. That is at a time when the production increased by a similar amount, 20%. Those were through voluntary measures.
I can look at my own riding of Etobicoke North where I have Bayer, the pharmaceutical company, BASF Canada and Parker Amchem, large chemical and pharmaceutical manufacturers which have really put a great effort into voluntary measures and have achieved some significant reductions in their emissions.
I would hope that voluntary measures will be part of the solution because there are some sectors and some companies that are working very hard to reduce their emissions.
If we look at other non-tax instruments, there are concepts like user charges for water supply, disposal charges or deposit refund schemes. There is a myriad of non-tax instruments that could be embellished and expanded.
If we look at tax instruments, we could look at accelerating depreciation allowances for environmental investments, for example, waste heat recovery. We waste a lot of heat.
There are a number of other tax instruments, but to reduce greenhouse gas emissions in Canada, we must recognize some important facts. Twenty-seven per cent of greenhouse gases originate in the transportation sector.
Secondly, if we adopt a policy of business as usual with respect to greenhouse gases, greenhouse gases will increase by 36.1% over 1990 levels by the year 2020.
We have seen this debate pitched as an Alberta oil patch issue versus the rest of Canada. In fact, that is not the case. The greenhouse gas producers in the next number of years will be British Columbia, Ontario and other provinces like Quebec, the Atlantic region and Saskatchewan.
To reach our goal, all Canadians will have to contribute. The end result will be worth it but it will involve a huge commitment by all Canadians. I think the goal will be worth it. I look forward to continuing discussion on this important topic.