Ottawa to cut emissions 20 per cent by 2020

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John Baird unveils his green plan
Ottawa to cut emissions 18 per cent by 2010

Oil sands startups get break under climate plan
Green plan highlights
Oil sands hit by climate change politics
Canada to ban traditional light bulbs
The simple fax: Baird's remarks were leaked in error
Text of speech by Environment Minister John Baird

TORONTO — The federal Conservatives have reworked their much criticized environmental plan to significantly cut the time frame for reducing the gases linked to climate change.

The strategy unveiled Thursday by Environment Minister John Baird requires Canada to begin cutting the total emissions of the gases as early as 2010. A 20-per-cent reduction from today's levels is forecast by 2020.

COMMENT:
BC's 2007 Throne Speech: 33 per cent below current levels by 2020, placing British Columbia's greenhouse gas emissions at 10 per cent under 1990 levels by 2020.
Kyoto target: 5% below 1990 level by 2012.
California: 1900 level by 2020.
Europe: 8% below 1990 level by 2012.

That is much sooner than the dates set under the Clean Air Act introduced by the government last year. That legislation, which has essentially been shelved after it was eviscerated by environmentalists and opposition members, would not have stabilized those emissions for another 14 years.

But the new plan, which is estimated to cost the Canadian economy as much as $7 billion to $8 billion per year, does not address all of the complaints lobbed at its predecessor.

Environment Minister John Baird announces
Ottawa's plan for the environment during a news
conference in Toronto on Thurs., April 26, 2007.
(Adrian Wyld/CP)

It relies on the intensity-based targets that allow industries to increase their greenhouse gas outputs as they increase production. Those types on controls have been repeatedly panned by environmental experts who have demanded absolute reductions.

Under Mr. Baird's strategy, Canada would not meet its targets under the Kyoto Protocol on greenhouse gas until 2025 — 13 years late.

And, while the major industrial emitters account for half of the country's output of greenhouse gas, they will be required to find just 40 per cent of the expected reductions. The rest will come from better fuel efficiency standards for cars and trucks, other federal initiatives such as the program that will help Canadians retrofit their homes, and provincial efforts to increase energy efficiency.

On the other hand, industry is likely to be unhappy with the new plan because those companies that do not meet stringent reduction targets will have to pay their excess emissions. While there will be flexibility in the way those payments can be made, critics will characterize the penalties as a carbon tax.

"The prices for consumer products like vehicles, natural gas, electricity and household appliances could go up. But it's a small price to pay to ensure a lasting environmental legacy for future generations," Mr. Baird told a press conference yesterday afternoon.

"Our plan strikes a plan between the perfection that some environmentalists may be seeking and the status quo that some in the industry seek to protect."

The new plan also takes aim at air pollution, setting fixed caps on the emission of four gases that cause smog and acid rain. And it promises to regulate products and commercial activities that reduce the quality of indoor air.

The environment was not one of the original five priorities of the Conservatives government, and it wasn't long ago that Prime Minister Stephen Harper was rejecting the notion of manmade climate change. But, as the issue became a concern for mainstream Canada and as the Liberals threatened to make political gains by raising the spectre of climate change, the Conservatives have revised their position.

After years of angrily rejecting Liberal plans to write greenhouse gases into the Canadian Environmental Act — effectively declaring that greenhouse gases are pollutants — Mr. Harper's government has done just that.

Mr. Baird, who repeatedly blamed the previous Liberal government for inaction on the environmental file, recently estimated that meeting Kyoto targets would cost the Canadian economy $51 billion annually — an amount rejected as inflated by many environmentalists.

His plan will give industry a much longer window to make the changes necessary to cut their emissions.

Companies not in existence today will have three years to meet greenhouse gas targets. The grace period has been instituted because the government says it takes a few years to get a plant running efficiently.

All other industries will have to begin reducing their greenhouse gas emissions by 18 per cent, per unit of production, by 2010 and then by an additional 2 per cent in each subsequent year. Terms from today's levels by 150 megatonnes per year by 2020 — climbing substantially and then falling in the intervening years.

Of that 150-tonne drop, industry is expected to account for 60 megatonnes, fuel efficiency for cars and trucks is expected to account for 40 megatonnes, improvements in home fuel efficiency and other measures for 10 megatonnes, and the provinces will be responsible for eliminating the final 40 megatonnes.

Companies that have already made strikes to reduce greenhouse gases will be given a credit for their efforts. Those that don't meet the targets by 2010 will be penalized, but they will be given will be given several options for payment.

They will be permitted to buy carbon credits from other Canadians companies that exceed their targets or invest in other measures that will reduce greenhouse gas emissions.

Mr. Baird says they will be able to trade certain credits through the Kyoto Protocol's Clean Development Mechanism even though the accord stipulates that countries that do not meet Kyoto targets cannot participate.

Or they will be able to invest in a technology fund that will finance investments in technology that could lead to reductions in greenhouse gas.

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SHAWN MCCARTHY
Globe and Mail Update
April 26, 2007

TORONTO — The Conservative government has signalled that it won't let its climate change plan derail aggressive oil sands expansion, exempting new projects from greenhouse gas emission targets until they are up and running.

Under regulations announced Thursday by Environment Minister John Baird, large industrial emitters will have to reduce their emissions per unit of production at existing facilities by 18 per cent in the first three years, and then a further 2 per cent per year.

However, companies that can't meet those so-called intensity targets will be able to purchase credits from more efficient ones or contribute to a technology fund, at an initial cost of $15 a tonne, rising to $20 in 2013.

Companies that build new plants will have to pass an environmental assessment process, which includes climate change impacts, and will then have three years before they must begin reducing their emissions.

Calgary-based petroleum companies had worried that Prime Minister Stephen Harper was prepared to get tough on the oil sands, the fastest growing component of Canada's greenhouse gas emissions.

Mr. Baird said the new plan seeks to balance the environmental goals with the needs of a growing economy. The industrial targets are “concrete, challenging, yet realistic,” he said.

He said the government felt it was necessary not to impose initial emission limits on new plants in order to allow for economic growth.

Mr. Baird also announced new air pollution regulations that will force companies to reduce their emissions of smog-causing sulphur dioxide, nitrous oxide, volatile organic chemicals and particulate matter.

Industry will have to reduce its air pollutants by 55 per cent by 2012.

Mr. Baird said the government is also working on new fuel efficiency measures for the automobile industry in an effort to reduce tailpipe emissions of carbon dioxide and other pollutants. The new regulations would take effect when a voluntary industry agreement expires in 2011.

The minister said the federal government is prepared to go it alone if the U.S. fails to adopt tougher fuel standards, but is hoping to harmonize standards with stricter U.S. regulations.

Environment Canada officials said the new plan will result in the stabilization of Canada's greenhouse gas emissions by as early as 2010, and reduce them by 20 per cent of 2006 levels by 2020, or a decrease of 150 megatonnes.

The Pembina Institute has forecast that the expansion of the oil sands – where production is expected to triple in the next 10 years – could increase greenhouse gas emissions by as much as 142 megatonnes by 2020.

And while the overall targets are tougher than the ones the Conservatives had first issued last fall, there are a number of measures that will ease the pain on the industry.

Companies will initially be able to meet 70 per cent of their target by paying into the technology fund, which will in turn finance research and development into new technologies, including the capture and underground storage of carbon dioxide.

By 2017, they would be able to meet only 10 per cent of their regulatory obligation through contributions to the fund.

The government also indicated that companies could buy and sell emission credits among themselves, though initially that market will be domestic only. Mr. Baird said the government will explore developing an emissions-credit trading market with the U.S. and Mexico.

Large industrial emitters include utilities oil producers, refineries, cement plants, and pulp and paper mills, and metals smelting. Those sectors account for 40 per cent of Canada's emissions. And they will be required to make 40 per cent of the cuts, when the financial compliance methods are included.

The government forecasts that its plan will shave 0.5 per cent of gross domestic product by 2020 – roughly $7-billion in today's economy – but says the impact on employment will be “negligible.”

The cost is “significant, it's real but we had to come up with a balanced approach,” he said. “The cost of doing nothing was no longer an option for Canada.”

Mr. Baird has claimed that Canada would lose 270,000 jobs if the country moved to meet its commitments under the Kyoto Protocol to reduce emissions to 6 per cent below 1990 levels by 2012. Environmentalists and opposition MPs dispute that figure, saying the dismal forecast does not take into account growth potential from green technologies.

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TORONTO — Highlights of the Conservative government's plan to reduce greenhouse gas emissions and air pollutants:

— Short-term emission reduction target of 18 per cent for existing industry by 2010, based on 2006 emission levels.

— A 26 per cent reduction target rate for industry by 2015.

— Canada's total emissions, including industry and other sources, reduced by 20 per cent by 2020.

— Industry can meet targets through reducing emissions, contributing to a technology fund, through domestic emissions trading and one-time credit for emission reduction action between 1992 and 2006.

— Plan predicts “real” but “manageable” price increases for cars, home appliances, electricity and fuel.

— National emission caps by 2012 for air pollutants such as nitrogen oxides, sulphur oxides, volatile organic compounds and particulate matter.

— Plan predicts $6.4 billion in annual health benefits by 2015 from reduced risk of death and illness.

— Mandatory fuel-efficiency standard for auto industry, yet to be determined, to take effect beginning with 2011 model year.

— Economy expected to a hit of $8 billion in “worst” year of plan.

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Alberta's oil producers are finding themselves squarely in the cross-hairs of the government's new climate change regulations, which aim to reduce greenhouse gas emissions by 20 per cent by 2020, even as industry plans to triple oil sands production.

Environment Minister John Baird is due to release targets for large industrial emitters today in Toronto, and the Conservative government is clearly pursuing a tougher line than it announced last fall.

The booming oil sands development represents the fastest growing source of greenhouse gas emissions, and industry analysts suggested the government will be hard-pressed to meet its targets without significant reductions in expected emissions there - either through a reduction in planned growth or through expensive technological solutions.

The Calgary-based Pembina Institute has calculated that greenhouse gas emissions from the oil sands amounted to 25 megatonnes in 2003, and forecasts that figure will jump to as much as 94 megatonnes in 2012, and 142 megatonnes in 2020 under a business-as-usual scenario.

Yesterday, Mr. Baird said the government plan would stabilize the country's greenhouse gas emissions by 2012, then reduce them by 20 per cent - or 150 megatonnes - by 2020.

One industry official said the Conservatives' emission target appears to be politically driven - aiming to be slightly tougher than the original Liberal plan, but not as aggressively as the one proposed by Liberal Leader Stephane Dion. "It is not clear that governments have reconciled their economic growth goals with their greenhouse gas emissions targets," the executive said.

EnCana Corp. chief executive Randy Eresman said he fears oil sands producers are facing several government actions that will spur higher costs, including a provincial royalty review, the phasing out of a federal tax break and the climate change regulations.

"The oil sands development, although they're very large in magnitude, the returns associated with them are very skinny," Mr. Eresman said.

He said EnCana is a low-cost producer and he doesn't see a threat to its projects. However, "if we add on all these burdens - and those burdens are significant - they could start shutting down [proposed] projects," he added.

Peter Tertzakian, energy economist with ARC Financial Corp., said it is difficult to quantify the impact of the government's targets on the oil sands, and that the various projects have dramatically different emissions per barrel of oil, and underlying economics.

"If you are a high-cost producer at the margin, you probably will be hurt," he said.

But the economist said the Conservatives' tougher stand on climate change is only part of a broader, societal dilemma - a tradeoff between access to secure and cheap energy and environmental sustainability.

Industry is expected to invest some $125-billion to expand oil sands production from just over one million barrels per day to 3.5 million barrels by 2015. That additional supply could be critical in keeping world oil prices from spiking higher, Mr. Tertzakian said.

Marlo Raynolds, executive director of the Pembina Institute, rejected the industry complaints. Industry could virtually eliminate oil sands greenhouse gas emissions at a reasonable cost if it embraced technologies to capture carbon dioxide emissions and store the gas underground, he said.

Mr. Raynolds slammed Ottawa's target, noting that it will leave Canada with emissions 11 per cent higher than 1990 levels, when the commitment under the Kyoto Protocol was to reduce them 6 per cent below 1990 levels by 2012.

"Now is the time to get it right and then let business do what it does best - it makes investments in the right places and faces challenges like this."

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OTTAWA -- Canada will be among the first countries in the world to ban the purchase of traditional light bulbs as part of the government's plan to reduce greenhouse-gas emissions.

The government's announcement yesterday follows the lead of Australia and Ontario and will take effect in 2012. Canadian retailers will be required to stock more efficient light bulbs such as compact fluorescents and halogen bulbs.

The new generation of light bulbs cost a bit more but last about seven years and use much less energy. The downside is that many of them contain mercury and need to be disposed of like paint and chemicals at special toxic-waste centres.

Natural Resources Minister Gary Lunn said the ban will get Canadians thinking more about the energy they use.

"This is more than just about light bulbs," he said. "The light bulb is only the gateway to broad public engagement on energy efficiency and action on climate change."

Opposition critics and environmentalists offered reluctant praise for the ban but condemned the government's overall plan for fighting climate change, which was outlined yesterday by Environment Minister John Baird.

Today, the Conservative government will provide details of an environmental plan for Canada's industrial heavyweights that will seek links with the United States rather than the European countries that champion the Kyoto accord, Mr. Baird said.

The plan will mark a clear separation from Liberal Leader Stéphane Dion, who has repeatedly claimed that Canadian firms could make "megatonnes of money" by taking part in Europe's market for trading carbon credits.

European countries have set up a cap and trade system, meaning countries dictate maximum levels of greenhouse-gas emissions for industry. To comply with the law, companies that are over the limit can buy credits from companies that are under the limit.

Mr. Baird said the Conservatives' plan will create a cap and trade system, but Canadian companies will be able to trade domestically only, or eventually with the United States and Mexico if the governments can reach an agreement.

"We have concerns about the European market," said Mr. Baird, repeating his claim that participation could allow Canadian firms to buy credits from Russia and other countries that do not reduce greenhouse gases.

Mr. Baird noted that Ontario has four coal-fired power stations, but receives pollution from 160 U.S. coal plants.

"If we want to reduce greenhouse gases and get the twin benefits of reducing air pollutants, we're better off to do it this side of the pond," he said.

Environmentalists express concern that the rejection of Europe in favour of the United States - which is not part of the Kyoto Protocol and has no national trading system - is another step away from Kyoto.

"I see it as an end-run around the United Nations system," Beatrice Olivastri of Friends of the Earth Canada said. "Anything that is a U.S.-related program is clearly outside of Kyoto, so that to me is very worrisome."

She also said Mr. Baird's announcement that Canada will still be above the Kyoto target eight years after the 2012 deadline shows a lack of urgency.

"It's putting a Band-Aid on cancer," she said.

Canada committed to reducing its emissions of heat-trapping greenhouse gas to 6 per cent below 1990 levels in the years 2008 to 2012. However, emissions are currently more than 30 per cent above 1990 levels.

Mr. Baird said the Conservative plan would stop the rise of emissions by 2012, and that by 2020 emissions would be 20 per cent below 2006 levels.

The Conservatives' decision not to base their plan on Kyoto targets follows last week's release of a government study warning of severe job losses and economic upheaval should Ottawa force the Kyoto targets on industry and consumers.

Although the government obtained independent verification of its dire forecast, a new survey by the Strategic Counsel shows that Canadians are not convinced.

Only 30 per cent of Canadians surveyed said the Kyoto commitments are unachievable and that a "made-in-Canada" plan is now required. Instead, 63 per cent said Canada should continue to try to achieve Kyoto targets and keep the commitments.

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How many light bulbs does it take to change the environment?

The government announced plans yesterday to cut greenhouse-gas emissions by more than 6 million tonnes per year. Here's how it could be achieved:

If each of the 12 million households across Canada were to replace 16 light bulbs (the 60-watt incandescent type), with 15-watt compact fluorescent lights...(That's 192-million light bulbs in total). we could cut the country's annual greenhouse-gas emissions by up to 6.3 million tonnes (The same as taking more than 1 million cars off the road).

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Kyoto and the crunch

Support for Kyoto commitments, April 21-24, 2007

Which one of these best represents your own view?

We should continue to try to achieve targets and keep our Kyoto commitments: 61%

Do not know: 7%

The goals are unachievable and we now need our own "made-in-Canada" plan: 32%

Do you find that keeping our Kyoto commitments would cost 275,000 jobs and take the country into a recession?

Not believable: 60%

Do not know: 4%

Believable: 36%

SOURCE: THE STRATEGIC COUNSEL

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OTTAWA -- It was supposed to be a dramatic conclusion of the government's environmental plot line, after months of cliffhanger-like buildup.

But the release of the Conservative government's revised plan to reduce greenhouse-gas emissions, scheduled for today, fell victim to anticlimax by way of a simple fax machine. Remarks that Environment Minister John Baird was supposed to deliver in advance of the announcement were mistakenly sent to the Opposition, forcing his office to publish them early.

The result was that a day before the big announcement, environmentalists and industry groups were already parsing Mr. Baird's words and picking apart a plan that was to be painstakingly rolled out with a series of briefings and a major news conference.

Mr. Baird passed off the fax as human error, and tried to explain why the inadvertent recipient -- Liberal MP David McGuinty -- was threatened with legal sanctions if he made Mr. Baird's remarks public.

"My staff did that, I think it was probably a good thing to do. It was just an abundance of caution," Mr. Baird told reporters.

He added: "Humans make mistakes. I'm the minister and I take responsibility for it. We're going to move forward; we have a great plan to reduce greenhouse gases."

Representatives from organizations such as the Sierra Club and the David Suzuki Foundation came out yesterday to criticize his plan to reduce Canada's emissions from last year's levels by 2020. That was a very loud admission, they said, that Canada has effectively abandoned its commitments under the Kyoto Protocol.

The stumble was just another in a series that have bedevilled the Conservatives on the file since they formed government in January of 2006.

Former minister Rona Ambrose was lambasted for her handling of the environmental file, leading Prime Minister Stephen Harper to replace her and to rework a previous plan that was severely ridiculed.

Still, the government is promising a plan for Canada's major industrial emitters that takes action against climate change while mitigating the impact on the economy.

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REMARKS
Regulatory Framework
Environment Minister John Baird, P.C. M.P.
April 25, 2007

Introduction

Good afternoon

Greenhouse gases are rising.

The climate is changing.

Winter is disappearing as we know it.

Air pollution is getting worse.

The air we breathe is dirtier than ever before.

We need to Turn the Corner.

After 13 years of inaction by the Liberal government, Canada is going in the wrong on the environment.

Since the Liberals promised to reduce greenhouse gases in 1997, they have only gone up.

They promised to meet Kyoto, but went in the opposite direction.

This is how we find ourselves today with one of the worst environmental records among industrialized countries.

Now, we need to turn things around.

We need to do a U-Turn.

On behalf of all Canadians, particular our youngest citizens, we need to find a better way.

Instead of greenhouse gases going up, we believe they should go down.

Instead of putting more carbon into the air, we believe we should put less.

Instead of our air getting dirtier, we think it should get cleaner.

Instead of childhood asthma rates rising, we think they should be declining.

Canada's New Government's Turning the Corner plan will stop the rise in greenhouse gases in 3-5 years.

The previous government was never able to put on the brakes. We will do that beginning today.

Once greenhouse gases have stopped rising, we will begin to reduce them, so that by 2020, Canada will have cut its greenhouse gas emissions by 150 million tonnes. This is 20% of our total emissions today.

If the Liberal government had instituted this plan in 1998 when they signed Kyoto, Canada would have achieved its emissions target.

Canada would be at Kyoto today.

Sadly, the real international commitments were only followed by empty rhetoric.

The same story is true for air pollution.

The Liberals did nothing to fight air pollution, but watch our air get dirtier.

We will impose stringent targets on industry so that air pollution is cut in half by 2015.

We will accomplish our goals with a concrete and realistic plan to regulate industrial air emissions.

Greenhouse Gas Emissions

Canadian industry is today served notice that it will have [to] become more efficient in order to reduce greenhouse gases and air pollution.

We will do this by mandating strict targets for industry.

Firms will have access to a few tools to meet their targets. They will be able to:

- make in-house reductions,

- take advantage of domestic emissions trading,

- purchase offsets,

- use the Clean Development Mechanism under the Kyoto Protocol, and,

- invest in a technology fund.

The design of this plan will give industry several tools to achieve real reductions.

We believe the market can help play a role. We will explore domestic trading as well as future linkages with emissions trading systems in the U.S., and possibly Mexico. Our one test for any emissions trading system will be that it is first and foremost in the best interest of Canada.

We want the Canadian industrial sector to be making real contributions here at home, now and in the future.

To achieve medium and long term reductions, industry will need to find some new solutions that don't exist today – such as a way to capture carbon and store it in the ground.

Our capped technology fund will help industry develop the solutions to produce deep reductions in greenhouse gases over time. This is true especially for electricity generation and oil sands development.

The fund is capped to ensure that it doesn't become a tax on industry and to ensure it isn't used by industry to pay its way out of achieving real reductions.

The development of new technologies will benefit the global effort to reduce greenhouse gas emissions. It will allow Canada to become a leader in new green technologies, with potential export markets around the world.

We will not allow good actors to go unrecognized. Companies who reduced their greenhouse gas emissions prior to 2006 will also be rewarded with a one-time credit for early action.

Our Turning the Corner plan will achieve real reductions in greenhouse gases, while helping make Canadian industry more efficient and more competitive on the global stage.

Air pollution

Air pollution is also a real concern for Canadians.

With our plan, we will begin to turn back the hands of time on a record of rising air pollution over the last 13 years.

Our plan sets overall national fixed emissions caps for industrial pollutants that cause smog and acid rain.

We will target:

- Nitrogen oxides (NOx),

- Sulphur oxides (SOx),

- Volatile organic compounds (VOCs), and

- Particulate matter (PM)

The plan will produce real results that Canadians will be able to see – a cut in half of air pollution by 2015.

We will also take action to help make common consumer and commercial products -- such as dishwashers, refrigerators and air conditioners – more energy more efficient.

Yesterday, along with Gary Lunn, the Minister of Natural Resources, our government announced the banning of inefficient light bulbs.

Improved energy efficiency, means less wasted energy and less air pollution.

With our real plan, we also recognize that Canadians spend 90 percent of their time indoors, where they are exposed to various pollutants..

Therefore, we will take action to improve the quality of the air we breathe indoors starting with the identification of the most harmful pollutants in our homes and our offices.

The benefits of this plan are real — cleaner communities, healthier children, fewer premature deaths, and more sustainable natural resources.

Significant health benefits linked to air improvement are expected to lead every year to:

- 920 less cases of chronic bronchitis;

- 1,260 fewer hospital admissions and emergency room visits;

- 5,600 fewer cases of child acute bronchitis;

- 170,000 fewer asthma incidences; and,

- 1,200 fewer premature deaths related to air pollution;

Our plan includes an aggressive strategy on air pollution because it is critical to the health of each and every Canadian. It's too important to ignore.

Maintaining our economic growth

This is an ambitious plan — one that will require resolve, and one that comes with some costs. Part of these costs will be paid by individual Canadians and their families. The costs are real but they are manageable.

When fully mature, by 2020, total costs will be in the range of $XX per Canadian in today's dollars. This could include price increases for consumer products like vehicles, natural gas, electricity, household appliances and even groceries. We need to be prepared for this extra responsibility if we are going to get the job done.

All Canadians have a key role to play — by taking action as consumers, as employees, as business people, as parents, and as responsible citizens, we will turn the corner.

Conclusion

Some people will be critical of our plan, saying that it doesn't go far enough, while others will say that we are going too far.

Some environmentalists may want perfection. Some in industry may want nothing.

Our government recognizes that we were going in the wrong direction and we need to correct course.

We will not spin the wheel so hard as to put the Canadian economy in the ditch to deliver environmental plan asked for in some quarters.

We will also not keep going in the same direction, as some others wish us to do.

We will turn the corner, with a balanced plan that recognizes the urgent need to act on the environment, while also respecting our responsibility to keep Canadian families working

Thank-you.

- END -

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