Wake up, Alberta – Obama's going for the hard cap on emissions

JEFFREY SIMPSON
Globe and Mail
February 23, 2009

On Thursday, President Barack Obama will present his 2010 – yes, 2010 – budgetary proposals. Albertans in particular and Canadians in general might get a shock.

Heads firmly in the sand, such as those in the Alberta cabinet, might miss what will be proposed, but no one else will. Mr. Obama will propose what he's always promised: emissions caps for greenhouse-gas emissions that cause global warming. He will create a market for permits to be purchased from the government, then traded among emitters. These permits might bring the U.S. government $300-billion in a decade or so.

Nothing like this has been proposed by the Harper government. It has preferred useless policies such as tax credits for public transit and expensive subsidies for corn-based ethanol that waste taxpayers' money. The centrepiece of the Harper approach has been that companies will have to reduce the intensity of their energy use and emissions and, if not, pay into a technology fund that might some day come up with ways of lowering emissions.

This intensity approach is quite different from Mr. Obama's hard cap. But we are now in the Orwellian world of Ottawa's climate-change policy. The Prime Minister and his spokesmen have been saying the two systems – intensity and hard caps – amount to the same thing, when, in fact, they do not. It's the same weird disconnect that had Mr. Harper blaming George Bush for the failures of Canada's own climate-change policies.

The disconnect in Ottawa, however, is not as wide as the one in Alberta, the major per capita source in Canada of emissions, where the provincial government steadfastly refuses to see the way the world is changing.

The day Mr. Obama was in Ottawa, Premier Ed Stelmach appeared on television saying how pleased he was that the President and the Prime Minister had agreed with Alberta's approach that emissions would best be reduced by technology, especially burying carbon through so-called sequestration projects.

Someone has got to shake Mr. Stelmach awake, or else Alberta is going to get a nasty shock. A cap-and-trade system is coming in the U.S. with hard limits. Canada is going to try to join that system. A wise premier would be starting to prepare his province for what lies ahead, not issuing new policy documents such as the one on tar sands that merely reconfirm existing and inadequate approaches.

Now would be a perfect time to take a deep breath in Edmonton, study what's coming from Washington, and change direction, because the recession has put on hold so many tar sands projects. Alberta has a perfect opportunity to change course without upsetting much ongoing work, because there is so much less of that work now going on.

It is illusory to the point of hallucination to insist, as Alberta has, that the province might create its own cap-and-trade system. Think about that: an Alberta-only scheme, instead of one involving the rest of North America. Who does Alberta think it's kidding? Every oil company in Alberta will want to trade in the larger system, not the tiny provincial one.

Last week, the Alberta government introduced legislation to provide the authority to administer the $2-billion in provincial funding for sequestration projects. There's nothing wrong with funding research and projects for sequestration, and the government deserves credit for spending the money even in recessionary times.

Many countries, including the U.S., are making the same investments. Studies make it clear that large-scale sequestration projects are long-term, technically demanding bets. Even if some commercial sequestration arrives within a decade, Alberta's tar sands emissions will keep growing, as its recent document admitted. The government believes sequestration might capture five million tonnes of carbon by 2015 (wishful thinking); from 1990 to 2006, Alberta's total emissions rose by 62 million tonnes.

The Harper government has remained mute on the Alberta approach. In fact, the subtext of its pitch to the Obama administration for an energy and climate-change pact – a pitch that went nowhere – was to protect the tar sands from any adverse U.S. policies.

The Harper government has told the world that Canada will reduce emissions by 20 per cent by 2020 from 2006 levels. This cannot be done if Alberta's emissions rise by 20 per cent in that time frame, as the province's policy allows.

Happily for Canada, the Obama administration is prepared to lead within North America, and we will have no choice but to follow. The sooner heads-in-the-sand politicians understand this new reality, and prepare for what's coming, the better.