Proceedings of the Standing Senate Committee on
Energy, the
Environment and Natural Resources
Issue 6 - Evidence
OTTAWA, Tuesday, March 24, 1998
The Standing Senate Committee on Energy, the Environment and Natural Resources met this day at 9:40 a.m. to examine such issues as may arise from time to time relating to energy, the environment and natural resources generally in Canada (briefing on Kyoto agreement).
Senator Ron Ghitter (Chairman) in the Chair.
[English]
The Chairman: Good morning. In welcoming our witnesses this morning I wish to explain to them that a number of our members have been called upon to travel the country concerning a bill, and the election in Nova Scotia has taken one of our members away. So we are rather short-handed at the moment. However, we expect to be joined by other members of the committee in a few moments.
We are anxious to get on the record just where we are moving from a government point of view with respect to Kyoto, especially in the light of what we heard at the Globe 98 Conference in Vancouver last week. We found that very interesting.
So we welcome you both and we look forward to hearing from you and getting your evidence on record. I know that our absent members will certainly read today's proceedings with interest.
Please proceed.
Ms Sue Kirby, Director General, Energy Policy Branch, Energy Sector, Natural Resources Canada: I am Sue Kirby. I am the Director General of Energy Policy at Natural Resources Canada. My colleague is Anne-Marie Smart, Director General of the Climate Change Bureau at Environment Canada. We are proposing that I speak first.
Our two ministers are, as you know, jointly charged with managing the climate change file; so it seemed appropriate for us to be here together. In terms of their own division of responsibility, Minister Goodale has been asked to be the lead minister for domestic implementation and we are proposing that I start out with some remarks on the domestic implementation side; then Anne-Marie will talk about the international process, about science, about integration with other air issues and about public education.
I believe a document has been handed round, which you might find helpful in following our presentation.
In terms of the overview, which is basically a table of contents, we are proposing that I deal with the first three items: Climate Change Update; Federal and Federal-Provincial Domestic Implementation Processes; and Steps to Implement Kyoto Domestically. We propose to keep our remarks short so that we can have a good amount of time for questions and discussions.
Would you please turn to page 3 of the hand-out, Climate Change Update and the Year Ahead. Since Kyoto we have begun moving to look at the implications of it and to put together a national action plan; in particular, we are looking at a number of ministerial meetings that are coming up over the course of the next year that will provide some milestones for us.
Energy and environment ministers have been meeting jointly on the climate change issue for some years now and we expect the pace of those meetings to pick up. They normally have been meeting annually in the fall; however, our next meeting of energy and environment ministers, and that is federal, provincial and territorial, is scheduled for April 23 and 24 in Toronto. That will be their first post-Kyoto opportunity to look at where we are going and the way forward since Kyoto. We expect they will meet again in October.
Those dates are largely driven by the discussions that have occurred by first ministers. First ministers met in December on the issue of climate change, the day after Kyoto, and talked about how we would deal with this in Canada. As a consequence, they have charged the Ministers of Energy and the Environment with the responsibility of leading the country in the implementation. They have asked that a report be given to them in June; so we are looking at the April meeting of the energy and environment ministers as, among other things, an occasion for preparing that written report.
Another milestone in the year ahead on the international side is the fourth meeting of the Conference of the Parties in Buenos Aires, Argentina in November. That will be key in terms of the international negotiations and, as I mentioned, Anne-Marie will speak in more detail about the international side. We find that international negotiating and domestic implementation are inextricably linked and we want them to inform each other, so we do see that as being a key milestone over the year.
Turning to page 4, we talk about a couple of areas that we see as being key domestic actions as we move to implementation in this period. We have called these "foundation building" and "early action." You will have even reference to those in the recent federal budget. By "foundation building" we mean doing much of the analytical homework that is needed; we mean engaging people, reaching out to Canadians, preparing them for the kinds of changes that we think will be necessary for building some consensus with those who must take action in order to implement. That is largely what we mean by "foundation building."
By "early action," we mean some of the key things that we can get on with right away. We have already done a number of things in the past on climate change, many of them focused on energy efficiency. As we look forward to the post-Kyoto period and the new challenges that brings, we expect to see early actions, and just one area that I will mention, because it is one my department is heavily involved in, is technology. As we look for the solutions to climate change, we think that many of them will be in the technological area, dealing with the ways that we produce, distribute and use energy, and we have reoriented much of our R&D activities, programs and partnerships to deal more with climate change. When we look at some of the early post-Kyoto actions we expect that that will be one area where we will see some results.
In terms of government objectives, the charge from the first ministers asked us to look at this over roughly a two-year time period; so by the end of 1999 we have a target to have a national implementation strategy on climate change in light of the Kyoto commitments. We see that as being an all-inclusive strategy. The first ministers emphasized the tremendous importance of having the provinces and the federal government working hand in hand, so we see it as a truly national strategy, not just a federal strategy.
Our first objective is to have the strategy in place by the end of 1999, but we will not wait until then to put actions in place. It may take that long to have the full strategy, but we think we need to generate early actions as quickly as possible, and that is our second objective.
You will have seen the press announcement on a federal climate change secretariat. That has now been established and has been in place for close to two months. It is headed by David Oulton, who is an assistant deputy minister. Mr. Oulton was with Agriculture Canada and some of you may know him in that context since you mentioned that many of your members are also on the Agriculture Committee. The secretariat will probably consist of 10 to 15 people who will be coordinating matters within the federal family and doing much of the outreach work with the provinces and stakeholders. There is still some question whether it will be a federal secretariat only or whether it will evolve into a national secretariat. At the moment it has been announced as a federal secretariat, but clearly the national process needs more than a federal secretariat behind it.
In terms of the federal family, as we call it, dealing with a number of departments, we have moved to engage a broader set of federal departments than in the past. At this stage, the two lead ministers are the Minister of Natural Resources and the Minister of Environment Canada. However, there are a number of other federal departments that are clearly essential to our moving forward on the file. We have regular meetings at the ADM and DM level to engage all of the necessary federal departments. For instance, Finance Canada, Foreign Affairs, Industry Canada and Transport Canada are just a few of the federal departments that are working with us, and if you have questions about others we can come back to that.
On page 5 we look at the federal-provincial climate change process. Parallel to what we have going within the federal system, where we have quite a lengthy list of tasks that we feel we need to accomplish over the next two years, we are also engaging the provinces and stakeholders in trying to move beyond what had been started as soon as we got back from Kyoto, from our sense of what we needed to do federally to something that truly involves the rest of the nation in terms of outlining the tasks, agreeing on the kind of information, and agreeing on the kind of actions. Sectoral groups and other stakeholders will be asked to participate with us and to provide both analysis and advice.
We are then looking at federal and provincial governments proposing the path forward through the joint meeting of the Ministers of Energy and the Environment, which we now think will be probably twice a year and, ultimately, through the first ministers. That will form the foundation of the strategy that we are trying to put in place over the next two years.
On page 6 we talk a little more about "foundation building" and "early action." Over the next couple of years we will be focusing on "foundation building" as an essential element that we need to get in place early so that people can develop common views about it and arrive at a common understanding of the challenge that is before us and the scope of the problem, as well as the opportunities it presents and so on. A large component of our efforts will be concentrated on public education and outreach to the general public and to stakeholders.
In addition to that foundation building activity, which we see growing over the course of the next couple of years, we see quick-start initiatives. I have mentioned one area in which those may take place. We will obviously be looking at as many others as we can. The federal budget announced $150 million over three years as a demonstration of federal commitment to getting the strategy in place and getting some early actions as part of it. We need to be sure that the provinces and stakeholders and the general public come along with us in terms of what needs to be done to build consensus for that.
At page 7, after developing the initial strategy, we need to look at further actions. We need a substantial discussion on possible additional measures. Those are likely to be more intrusive than what we are examining at the moment. They are likely to take more consensus-building, more support and groundwork. Those are somewhat further down the road, but there are earlier actions that can take place. Part of the objective of our foundation building is to start preparing the analysis and the agreement for those later measures.
The eighth slide, or page, is labelled "Beyond Kyoto." It is our belief within the federal government that climate change will remain a priority issue. It is not likely to just fall off the public agenda. Kyoto was a significant turning point and it is likely to remain a priority in part driven by international pressures.
We have talked a little about the upcoming negotiations in Buenos Aires. The preparatory session for those talks will take place in June. The status of the issue, the complexity of it, the potential impact, both on the environment and on economy, trade and technology, will ensure that it maintains its high profile for some period of time.
In looking at moving forward in our efforts on climate change, maintaining credibility is absolutely essential to the whole exercise. There is a period of rebuilding of trust which needs to go on with the provinces. In terms of the international negotiations with the other countries with whom we are dealing in advancing the protocol, and also domestically, credibility is absolutely the key to success.
Overall, this issue is likely to lead to a very broad redirection of government actions, efforts, priorities and initiatives.
Ms Anne-Marie Smart, Director General, Climate Change Bureau, Environment Canada: Honourable senators, since Kyoto, we have been active in three key areas: International; Overall environmental policy, which includes science; and Public education and outreach. I will try to give you a sense of the work ongoing on those three fronts.
Page 10 refers to the international front. A lot of activity is already happening to prepare for the Buenos Aires meeting in November. Negotiations for Buenos Aires have already started and a number of meetings have already taken place.
Right after Kyoto, in early January, the minister and departmental officials went to Washington to meet with some of the key U.S. people to talk about Buenos Aires and what we needed to do to get ready for it. The atmosphere was very receptive. There was a keen willingness to collaborate on issues such as international emissions trading and on coordinating efforts to engage developing countries. Because developing countries were not part of the Kyoto protocol, we felt there was a need to bring those countries on board in Buenos Aires. Also, in the area of public education and outreach, we recognized that there was much that both of our countries could do together.
On those three fronts we have immediately begun moving forward in Canada. Last week, in Vancouver, a bi-national forum was held between Canada and the U.S. to look at the issue of international emissions trading. We invited 70 people and 150 showed up. There was a broad representation from the business community, from industry, from environmental groups, and from the financial sector. They came from both Canada and the U.S., with some international representatives as well.
From that forum emerged a sense that everyone is at the same stage when it comes to international emissions trading. It is in the protocol. No one is really sure exactly how it will unfold. There was much interest in exploring it and learning more about how to trade credits among developed countries.
The proceedings and a summary of that forum will be available within the next week. I would be pleased to forward a copy of that to you should you wish to have it. It was a day-long forum. From that will emerge a lot of collaborative work between Canada and the U.S. to figure out the system over the next months. Also, a lot of work will happen within Canada, because there is a strong need to link this work with our domestic implementation strategy as it unfolds.
During the forum a number of groups or businesses touched on the issue of credit for early action. Firms would like to start now to reduce their greenhouse gas emissions and there is keen interest in how they might obtain credit for doing so. Between ourselves and Natural Resources, we are exploring that, and that work will continue over the next months leading up to Buenos Aires and beyond, to the domestic implementation policy.
The minister was also in China in mid-January. There is very strong interest among Chinese officials about the importance of taking action to limit emissions. In those meetings, and in subsequent meetings in Budapest and again in Washington in the last few weeks, international emissions trading was examined, as were two other items contained in the protocol -- the clean development mechanism and joint implementation. Canada wanted to have this package of flexibility mechanism included in the protocol so we could meet our commitment. We have keen interest in working with developing countries on defining the clean development mechanism, to ensure agreement and to find ways of putting this in place for Buenos Aires in November.
The negotiations will continue over the coming months. There is a key meeting in June to begin looking at Canada's position for Buenos Aires. I expect it will develop within Canada together with the domestic policy and with some of our international partners.
Moving to page 12, the other area where we have been working very hard is in that of environmental science and policy. There is a very strong recognition that our overall environmental policy will play a key role in the development of our positions internationally, as well as in our domestic implementation plan. The efforts of Environment Canada, often in collaboration with Natural Resources, will continue.
Last fall, we issued a number of scientific studies, the Canada Country Studies, that looked at the possible impact of climate change within Canada. There is a recognition that Canada could be particularly vulnerable to the impact of a changing climate. Every time there is an extreme weather event, we find in the public opinion polls that Canadians link the extreme weather event with the possible impact of climate change. The science around that will continue as we move forward with the domestic implementation plan. There will be a number of studies coming out over the next year. There are follow-ups to the Canada Country Studies looking at the impact from regional and sectoral views. As we develop our policies internationally and domestically, they will continue to be informed by the science as it emerges in that key area.
The other key area being examined within Environment Canada is the linking of issues like smog and acid rain and the possible environmental benefits that could accrue from taking action on both of those fronts, and the impact that that could have on climate change as well.
There is a whole stream of work which addresses the science behind smog and acid rain. A number of studies will be completed in the coming months that will speak to the benefits and impacts of the climate change issue.
The last area that I will focus on, found on page 13, is the area of public education and outreach. Over the last number of years, along with the Department of Natural Resources, we have done much in the area of education outreach on energy efficiency projects and the science of climate change. There are a number of kits available now. I have brought some of the most recent material which has been made available to the public through the Internet, to schools through SchoolNet and to parliamentarians through our stakeholders. This material will continue to be made available to people as the domestic implementation strategy unfolds and as our efforts on the international front continue.
Public opinion polling that we have done portrays Canadians as very concerned about climate change in terms of their own health and the legacy for their children. The majority of those polled were very concerned about the kinds of environment that we leave for our children and grandchildren in the years to come and obviously about having the cleanest, healthiest environment possible.
Kyoto had an impact on Canadian public opinion in terms of certainly raising a level of awareness about climate change. What we found is that Canadians would like much more information about climate change and are not very sure what actions individuals can take in order to help the climate.
We are looking at that kind of information in terms of designing what we do next as the policies come forward and how we can best communicate that to Canadians as broadly as possible. There is certainly a keen sense that if governments are going to take action and move forward on climate change, the public and all key stakeholders must be engaged in the effort in order for it to be successful.
More information is required to better understand the issue. Canadians really want to know what it means to their lives and how they can make changes. They are also looking for what we call "best practices" or working models. There are examples of companies and individuals who are working in this area. It has been expressed to us that the best models or practices that are occurring in Canada or abroad could help to serve as champions or ambassadors for helping individuals to take action within their own companies or lives.
Canadians are certainly looking for governments to lead and act. They do not tend to distinguish between federal, provincial and municipal governments; they are simply looking for leadership on the issue.
As the $50 million targeted in the budget begins to roll out, there will be a component of that money put toward public education and outreach. The Department of the Environment is working with the Department of Natural Resources, as well as the federal Departments of Transport, Agriculture and Industry. Many departments will have to be engaged and brought into this society-wide effort in terms of engaging the public and in providing outreach.
Ms Kirby and I would welcome your questions.
The Chairman: I will start off by saying that public communication is certainly a very important area and you have both underlined that.
This past week I received material from people in Calgary that addressed the science of global warming and ridiculed the fact that we have a problem with global warming. Journalists from The Globe and Mail and elsewhere also wrote in terms of global warming as science fiction. I suppose there is an element of communication that goes on in that area to convince Canadians that there is a problem. Perhaps you would like to comment on that first before we get into the credibility problem with your departments.
I do not think all Canadians are persuaded that there really is a problem, judging from materials that have crossed my desk.
Ms Kirby: There are some dissenting scientists. However, we believe that there is a growing international scientific consensus.
The Intergovernmental Panel on Climate Change, the main international scientific body on this subject, reported in their most recent findings that they see a discernible human impact on climate. That is much of what we take as our guidance in terms of the science.
As Ms Smart said, some Canadian studies have been conducted by Environment Canada, but involving the Department of Natural Resources and other departments as well, to look at the potential impact within Canada. That would assist with some of the materials that might be there in terms of the problem.
The second aspect to education is that, once we have spoken to people about the problem, we will provide them with the information they need to mobilize action and to talk about the kinds of things that they can do to contribute to solutions. We have done much education in the past on energy efficiency, which would be one of our of primary target areas; however, people are not yet linking energy efficiency with climate change. That is one of the other key areas.
Ms Smart: One of the things that we do try to do, as much as we can, is correct misinformation when it is out there in the public domain.
To give you an example, last fall when the Canada country studies emerged, we did see a number of articles which described global warming as science fiction. All we can do -- and it is not just the departments, it is other scientists and stakeholders too -- is to keep publishing the studies, to get that information out there, to try to have a good dialogue and to have the information circulating so that the information is corrected. We will continue to do this as aggressively as possible and encourage other scientists not directly connected with the department to also try to correct misinformation when they can.
The Chairman: How do you respond to the suggestion that over the past decade the earth's average surface temperature has actually cooled a bit?
Ms Smart: We have certainly read that. Our scientists are well-versed with the various studies. Ms Kirby also referred to the Intergovernmental Panel on Climate Change, which has put the best evidence forward that currently exists.
No one disputes that there are various studies out there. The IPCC reports just say that the majority of the studies are now showing that there is this discernible impact that humans are causing on the climate. No one is saying that there are not different studies. However, the preponderance of studies and the majority of scientists, both in Canada and the U.S., point to human impact as having an impact on climate.
The Chairman: Do your polls show that Canadians see global warming as a problem? You alluded to polls in your testimony.
Ms Smart: They are consistently around 70 to 80 per cent. There are a number of polls that are publicly available. I would be happy to send you a synthesis of them.
The Chairman: That would be helpful, thank you.
Ms Smart: There is some debate around the terms "global warming" and "climate change". I was in the United States two weeks ago and colleagues there were saying they were doing some focus group testing around these terms. The term "global warming" seems to be having a better impact with the American public.
I did the same testing in Canada and the term "global warming" resonates quite nicely with Canadians who are in a very cold climate. So the term "climate change" tends to better reflect what it is happening. However, it is an emerging science and I do not think anyone says we have the definitive answers; but I can certainly give you the results of the public opinion polling.
The Chairman: With all the tornadoes and floods and so on, something is happening with the weather patterns, although I am not sure what it is.
Ms Smart: Every time there is an extreme weather event, whether it is an ice storm in Ottawa, or the Red River or Saguenay floods, people make the link in their minds, even though the scientists cannot definitively say that any one incident is linked to climate change.
Senator Di Nino: I have a question to which I am sure many Canadians want an answer. Over the last number of years we have spent literally millions upon millions of dollars on this issue. Obviously we are not the only country doing that. We are still not getting any answers on which we can rely. Why is that? Are the questions really that difficult or are they not being asked properly?
Ms Kirby: I would suggest that it is because of the complexity of the issue. We have talked a bit about the science, and the science itself is very complex. It has taken scientists 15 or 20 years to get to the kind of consensus that we are starting to see in the international scientific community.
Beyond the science, the question of how to deal with climate change is also equally complex, and so is the question of what its potential impacts might be, be they economic, technological, trade impacts or impacts on regional disparities. There has been a lot of work done and there are a lot of studies out there and they do lead us to have a general range of what we think the impacts are likely to be. At the same time, however, the targets have also been moving, through the international negotiating process, so people look for analysis of a different set of targets and assumptions and so on. The point is that we do think we are looking at a real problem whose solution has to encompass the entire economy and will take quite a period of time to put in place if it is to be done in the most cost-effective way, because we want to put in new technologies as capital retires. That will take some time.
We do have a lot of information on where we should move forward. We do not think we yet have the consensus that we would need to take really strong actions. At this point we are probably looking at continuing and enhancing and deepening the kinds of things we have been doing on energy efficiency and alternative energies. We are starting to do some studies on emissions trading, for example, which is a much newer area in which a lot of research is starting to happen but in which there are not a lot of answers yet. Canada is not unique; other countries do not have those answers either.
My own answer would be that it is complex and it will take us many millions of dollars to address it and we need to get moving as quickly as we can.
Senator Di Nino: With regard to these expenditures, which are being undertaken by a variety of different players in this country and probably many more outside this country, is there some coordination so that the focus and the objective are relatively the same? Is there an opportunity to guide this research so that at some time in the not-too-distant future we can rely a little more on the information that is being provided?
Ms Kirby: There are a number of coordination vehicles on the science of climate change. For example, we have a MOU signed by the so-called four natural resource departments: Environment Canada, Natural Resources Canada, Agriculture Canada, and Fisheries and Oceans. Those four departments are now, through that MOU process, coordinating the science they undertake and fund to be undertaken elsewhere; so there is that.
On the policy side, we have a committee of core ADMs, which initially involved nine departments but is growing, that meets on a weekly basis to coordinate what is happening within the federal departments. We have talked a bit about the federal secretariat that has been newly announced to ensure that that coordination is strengthened and that the communications coming out about what the findings are is enhanced. There is some discussion under way about whether that federal secretariat ought to evolve into a national secretariat, but at a minimum they will be responsible for coordinating within the federal system and for making sure there is good communication with the provinces and stakeholders. We suspect that they will in fact take on a larger role than that as the national secretariat.
We are proposing that over the course of the next two years, while we develop the implementation strategy, ours will be one of the most extensive consultation processes to be seen. As we move down the road with that, the coordination of the studies that have been done will be increasingly important so that we do not duplicate research and spend money to do the same things over again. Not all of that will be by government. That is a great part of the reason why we have looked at the establishment of the secretariat as a focal point for coordination.
Senator Di Nino: Is this coordination effort being shared? Are the provinces participating in this effort to coordinate the research, the expenditures, and so on?
Ms Kirby: The provinces very explicitly are involved in that. You also asked about the international side, and there are a couple of things happening there. Ms Smart has talked about some of things her minister has done. Minister Goodale was in Washington this week and signed a MOU with the United States on R&D cooperation in the area of climate change. So there is some international cooperation as well, both in terms of looking at solutions and in terms of analysis.
Ms Smart: Discussions started with the provinces in early January to design a process for cooperating in the development of the domestic implementation strategy, the national implementation strategy, over the next two years. They may try to do that through the federal secretariat headed by David Oulton. There is a lot of discussion going on about having that expanded into a national secretariat, so that the provinces will be participating, either directly or virtually, in the work of the national secretariat, and there would be some people working directly with the provinces. They would use e-mail and the Internet and face-to-face meetings to the maximum advantage in order to ensure cooperation and coordination. So far it is working extremely well, and if it continues, as the work-plans get developed and the work moves forward, I think we will see a real engagement and dialogue and working-out of the climate-change problem together among the federal government, the provinces and the territories. The experience over the last three months has been extremely intense and, so far, extremely positive.
Senator Di Nino: Are you saying to me, or am I misunderstanding you, that this is really a recent effort?
Ms Smart: No, it has been ongoing.
Senator Di Nino: You mentioned January as a starting point.
Ms Smart: I should have said the effort intensified in January. They have been cooperating all along, but the commitments made in Kyoto, and the fact that the first ministers in December asked the provinces and the federal government to come back within two years with this domestic implementation strategy, have intensified efforts to work together in order to do so. Rather than talk three, four, or five times a year, it has intensified quite significantly.
Senator Adams: You mentioned the figure of $50 million. Is that just for the advertising? Is it only from the federal government or does it involve the provinces? Is the effort just to put more information out about how we are polluting the earth? What is the $50 million for?
Ms Kirby: The $50 million was per year over three years. Public education and outreach is part of that, but it is not all of it or even the majority of it. The exact distribution or allocation will be coming from Treasury Board very soon, we hope, and there will be further announcements by the two ministers as to how they see that money being sent.
We see that money covering a number of areas. I talked about foundation building -- analysis, consultation and communication. We talked about early action as well, and that is also part of the $50 million a year for three years, and it relates to funding for specific actions, not only within the federal system.
Ms Smart: That $50 million is in addition to moneys already committed on climate change in other budgets. There had been $20 million for energy efficiency initiatives in previous budgets. The intention is that this money will also go toward foundation building, quick start initiatives, and to working out this national implementation plan with the provinces that is expected to come back within two years. It is a combination of all three.
Senator Adams: You said it was a three-year program. Other countries came to an agreement in Japan as well. Are their budgets similar to ours? How will it work out for Canada with respect to greenhouse gas emissions? Will we be working together? Do we have some kind of agreement now, or has nothing been done following what happened in Japan?
Ms Smart: You are, I assume, referring to the protocol in December.
The intention within Canada is that the federal government and the provinces will work over an 18-month to 24-month period together to develop the plan. There was a strong sense that Ottawa should not devise a national plan on how to change greenhouse gas emissions following the Kyoto commitments. Made-in-Ottawa approaches have not worked well in the past. This time, if it is to be successful, there is a strong sense that the provinces, the territories and the federal government should work it out together. That is why there is this 18-month to 24-month work plan to devise the national implementation strategy.
Senator Adams: You will work on it for 18 months or 24 months with the provinces, but what about other countries that have agreements? How will they set it up?
Ms Smart: As I was saying earlier, the work is ongoing. Environment Canada is working with Natural Resources and Foreign Affairs, departments that have traditionally worked in this area. They are already starting work to get ready for the next conference in Buenos Aires in November, the follow-up to the Kyoto conference.
A number of areas need to be worked on in Buenos Aires. For example, how will we implement the international emissions trading scheme? What is this clean development mechanism that is meant to involve developing countries? How do we engage the developing countries, because they were not included in the Kyoto protocol? Obviously, if we are to reduce greenhouse gas emissions, we need to bring those countries on board.
A lot of very intense work is already going on through the UN. Again, Environment Canada, Natural Resources and Foreign Affairs are engaged in all of those meetings and discussions, and there is a strong sense of linking what we do internationally with what we are doing domestically. Those have to go hand in hand.
Ms Kirby: In terms of what other countries are doing, which is part of your question, we have seen some announcements, but not very many. The Americans have talked in their president's message about what they might do. That has not been approved by Congress yet, and there is expectation in some quarters that it may get scaled down from what he has suggested, but in its broad lines, and according to the direction they are planning to take, we do not expect that the Canadian plan will be significantly different. The areas we are looking at focusing on and doing work on are quite similar. Part of their platform is this concept of credit for early action that we have talked about. That is something we are looking at in Canada. It is pretty heavy on the technology side, which we see as being essential.
The announcement at this time, if Congress does not scale it back, would be considerably greater in size than what we are looking at, more than the 10-fold difference you would expect given the difference in the size of the economies. That is partly because the $50 million a year over three years we have announced is not what we see as being sufficient to actually meet the Kyoto protocol. That is what we see as being necessary to do the early work and to get the provinces and the stakeholders to buy in to the strategy. More money than that will be needed down the road.
Senator Adams: I heard in Washington that they were going to put a science building in the Resolute Bay area up in the Arctic. Some politicians thought it was in the wrong place, and they wanted to put it in Alaska. Have you heard anything about that?
Ms Smart: I could look into it for you, but I am not aware of it.
Senator Adams: Do you have any monitoring equipment with respect to reducing greenhouse gas emissions?
Ms Smart: We do have monitoring equipment at various stations across the country that sample air for smog and all kinds of emissions, but that is not my area of expertise. I can get you the information if you are interested in it.
Senator Adams: Every time these emissions hit the cold air, they move from the south to the north. We should put more monitoring equipment in the Arctic.
Senator Butts: I admire the optimism of our witnesses. I do not know what else to say. I have been on this committee only a few months, but in that time we have never even had a consensus on this committee on whether to stop burning fossil fuels -- it might lead to more unemployment. So I think it is rather optimistic to suggest that government departments -- and not just two, but four or five departments -- as well as the provinces, the public, certain other stakeholders, and even the Third World, will agree with this goal. I wish you could find a way to give me a little bit of that optimism.
I come one street away from the infamous tar ponds, an area that was labelled the greatest environmental disaster in Canada, if not in the whole world. I am sure all governments have spent more than $50 million on it, and yet there has been no change.
I wish you could give me some optimism about, first, public credibility. I believe that if you get something that succeeds on the ground, then you achieve a sense of credibility. Why not try the tar ponds?
The Chairman: Sister Butts, you might use your connections to get some divine intervention into this situation.
Senator Butts: That is what it will take. It will not happen simply by our sitting around here, because we will never get a consensus on this committee, never mind the whole world.
Ms Smart: I agree that it is a very large undertaking. Everyone recognizes that. There is a strong feeling about the need to balance the needs of the economy with the environment and to move forward in a way that involves people and with a plan that is workable.
We are at the beginning of a process to implement Kyoto. Ms Kirby probably has her own views, but the optimism about working with people to solve this exists. We will see where the process goes.
In terms of communities, I have been responsible for a program within Environment Canada called Action 21. It provides support to community groups across the country -- that is, people working in their communities. We fund about 350 groups across the country. However, they are not all working on climate change. They work on a whole range of environmental issues. They work at the community level to make some difference within their community to change the environment, whether it involves cleaning up a stream, making more awareness of blue box initiatives or working to have more protected spaces for endangered species. In addition, they work in the area of climate change and greenhouse gas emissions, perhaps to sharpen the awareness of an industry or maybe on ways to reduce emissions. This is where a lot of the quiet work is happening, namely, at the community level.
The network that exists across the country is very strong, but it does not get a high profile. It is not something that you see on the front pages every day. From our standpoint at Environment Canada, it is that community-based kind of initiative that can really make the difference at the community level. While we are doing all this government macro-policy making and involving other departments, certainly the money and the resources that we have committed to communities is a key element to achieving success.
I have seen it work time and time again at the community level -- maybe not on as serious a level as the tar ponds situation, but certainly with individual efforts and communities pulling together. At this point, I am optimistic that that kind of initiative, and being able to spread that out and broaden it, will help to make a difference on greenhouse gas emissions.
Ms Kirby: I agree about how daunting the challenge is, and not only the consensus building part but also the substance of what we must do. I am with the Energy Policy Branch. We think that we are looking at bigger changes here than we have ever seen or been able to sustain on any kind of historical basis. It is a huge challenge; getting people to agree on it is also a huge challenge. I have been working on this subject for quite a while through a lot of stakeholder groups and we do not get consensus very easily.
In the next two years we are hoping to get as much as we can on the strategy to move forward. We will not solve the problem -- we could hardly do that in two years -- but we are hoping that we will have enough to be able to move forward on the strategy.
One thing that made me optimistic was the meeting of first ministers in December, when they agreed that this must involve a cooperative effort. They were willing and interested to work together. It remains to be seen whether we can accomplish that. I do think it is the biggest challenge that I have ever seen in my long career in energy. It will keep all of us working hard for a long time. We will see if we can be successful. It will not be easy, but it is one area where we think there is commitment.
The Chairman: I should like to supplement what Senator Butts was saying. You mentioned credibility as being very important in your work. I think that credibility was blown in Kyoto, because no one really believes that you will meet the targets or be anywhere near those targets. To suggest that by the year 2010 Canada will be able to reduce emissions effectively by 25 per cent is unrealistic, and no one believes it. I do not want to take you into policy or political matters, but from a public perception point of view no one believes that that is achievable, other than by stopping the country, halting everything and shutting down every vehicle. You may disagree, but I want to hear your view on this.
When I was in Vancouver last week at Globe 98, I heard the representative from the environment department, Mr. Ephrem, speak in terms of creating the strategy over the next two years, when 2010 is just around the corner. It was like Kyoto just happened and it all started there. One would be led to ask what happened leading up to Kyoto? Where was the Government of Canada for the 10 years leading up to Kyoto? Why, all of a sudden, does it all happen from Kyoto onwards? We now need two years to create a strategy to get it started, notwithstanding that I hear you on your intermediated action plans. No one believes you. No one believes that what you are doing is achievable or even possible.
I echo what Senator Butts is talking about. Had the government or your department come out of Kyoto with a more realistic policy, perhaps Canadians would find some credibility to it. I found the conclusions in Kyoto, from Canada's point of view, to be a political exercise, not an exercise in reality. You must now labour under a feeling among Canadians, myself included, that you are doing something that you will never achieve. You said that it was a daunting exercise that you were facing. It is much more than daunting; it is impossible to achieve. I hope I am wrong, because I think it is important that we move toward, but I should like to hear some substantive comments from you in that regard.
Ms Kirby: In part, whether Canada will ever do this will be linked to where the rest of the world goes as well. There were some outliers in the negotiations, but not that many. If we look at the targets that came across, what Canada has agreed to is very much in the same range as what the United States, Europe and Japan have agreed to. All our major trading partners are looking at a similar challenge. Whether we achieve it will depend on collective political and economic will. We must look at those kinds of challenges elsewhere, not just in Canada and within our borders.
You asked why we are only starting now. I do not think it is fair to say that. We have had a lot of progress over 25 years, particularly with regard to energy efficiency. We are starting at a much higher level of expectation in terms of the kinds of targets that arose from Kyoto.
The other thing about the two-year time period that I would refer you to is the process that follows Kyoto. Kyoto is when the agreement was reached. The protocol is open for signature now for a period of one year. Ratification follows signature and we expect that that, for many countries, may take a couple of years. Our two-year period is probably in line with where we expect others will be in making their decision as to whether to ratify the protocol that will be legally binding in nature. The protocol itself enters into force and becomes binding once we have 55 countries representing 55 per cent of the OECD emissions. You are probably aware of those things.
The two-year process is a timetable that is linked not only to how much domestic consensus building we believe must occur but also to the pace of change that we expect to see in other countries, particularly the time that may be required in the United States. It also is a period of time over which we will see the further elaboration of certain elements of the protocol. As Ms Smart said, we came out of Kyoto with some elements of flexibility that we had been looking for, but most of those are in there in preliminary form. Serious negotiations will occur over the next year or two in terms of how we actually define and put in place a system for things such as emissions trading, clean air development, and so on. That is all linked together and that is why we see this process involving a two-year period of time.
The Chairman: But there is no magic in what must be done. It is a case of doing it. We could go in to the next 10 years and write a bunch of books about this. I hear speakers all saying the same things in places such as Vancouver, and I heard the same thing in other places three, four or five years ago. It is the same rhetoric.
We know what must be done. If you are to cut down emissions, you will have to deal with motor vehicles and their inefficiencies and with the way we build homes. There are some well-defined areas involved here. It is not a matter of the research that must be done; it is matter of political will.
I have trouble with the concept of developing a strategy because I think you could sit down in a day and pull out the material and determine what must be done. It is a case of how to do it. Why do we wait for other countries? We are talking in terms of Canada's commitment by the year 2010. We know what must be done. I agree with you that cooperation with the provinces obviously is essential, but why do we not do it? Why are we waiting two years?
Ms Kirby: I do not think we are. We spoke of early action being a component of what we will be concerned about over the next two years; it is not that we will spend two years before we will do anything. We will be taking action in that period. It is a process of political will and it is a process of engagement and of having support to take some of the steps that are necessary.
There are things we can do now. There are things we already have done and there are additional ones that we will be doing. I would agree with you that most of the areas are known. Most of the hard areas are known and most of the hard areas have to do with transportation; certainly, most of the areas where we need to take action over all are known. Electricity generation will change enormously in this country, and we need to find ways to take advantage of the kinds of changes we think will happen to be able to build in a more climate friendly electricity system as we rebuild and as we get into a different kind of world in terms of generation and distribution.
On the energy-efficiency side, we have been in that game for 25 or 30 years. Much work has been done that can be built upon and I think we do have a good sense of where the main areas of opportunity are. So it is not a matter of waiting; it is simply that we think it will take roughly those two years or, if your colleague is right, it may take substantially more to really have the will and consensus on a broad basis to move significantly.
The Chairman: Would you accept the thought that Canada is really in a very different position from that of the other nations we are working with, considering that we are responsible for only two per cent of the greenhouse gas emissions on a world scale? Considering our small population and the fact that we are a resource-based nation, would you not agree that it is really unfair to compare Canada with the nations that you have -- the United States, the biggest polluter, and Europe, which has a whole different set of circumstances? When I hear Canada being compared with these other nations, I find it to be a difficult comparison. I would like your views on that.
Ms Kirby: There are some areas in which Canada is different and we did get a slightly different target as we looked at the United States; for example, ours is six, theirs is seven. Part of the reason for that difference was because of the arguments that we successfully made in Kyoto about the Canadian economy and how it is structured and about how we are providing clean exports to others in the world, like natural gas and hydroelectric power, and that includes the United States as a recipient of those exports. It was some of those arguments that did lead to a slightly different target there.
One of the biggest areas in which we are different at the moment is our rate of population growth, and that does contribute significantly to increases in emissions, so we may only be two per cent now but we are growing at a fairly rapid rate. There are differences. Nonetheless, if we look at the kinds of negotiations that go on, virtually every country thinks it is different in some way, and there probably is some truth to that.
Senator Di Nino: You are probably aware of some of the frustration around this table. I alluded before to the investments that have been made in this area. Obviously, you have some critics who not only do not believe what you are saying, but many times actually refute what you are saying outright. I should add very quickly this is not a matter of shooting the messenger. This is not meant to be an attack or criticism of our two presenters. It is just that I feel Canadians are very frustrated with this whole issue. I agree with the chairman that most of the things that need to be done we already know need to be done. Ms Smart said a moment ago that we must balance the economic and environmental issues. To a degree that is fair, but it sounds like a member of the current government speaking instead of someone who is here to enlighten us and educate us on this issue.
For me, if I can add something of value, we do not seem to have the answers to the questions that need to be answered in order for Canadians to arrive at a conclusion as to whether the kinds of things that have been suggested need be done should be done. That is not only a Canadian problem; it is a problem that, in effect, is worldwide. When we question the environmental issues and the actions that are being proposed, is it because we are not sure that we know what we are doing? Is that a fair question?
Ms Kirby: I think it is fair, as the chairman said, to say that we know where the areas are that we need to act on, and we know roughly what those actions need to be in terms of the kinds of changes that need to be made. Where I think there is much struggling going on is on the question whether there are better ways to make those changes than the ways that have been tried up to this point in time. It is those kinds of questions that lead to quite a range of estimates in the analysis as to how costly and how difficult all these things might be.
Senator Di Nino: I have a question dealing with your critics, those who may be considered adversaries, the Sierra Clubs of this world, who I believe perform a very useful service in this issue. How do you draw them in? How do you consult with them, or do you consult with them?
Ms Smart: We do extensively. They take part in the work plans that are being developed, like the International Emissions Trading Forum that was held last week in Vancouver and the work plan that is being developed to move that issue forward. The stakeholders around the table included representatives from the Sierra Club, the Pembina Institute, Pollution Probe, the industries and the financial sector, as well as from the provinces. This was one of the first meetings because it is an issue that is really moving quickly because of the international negotiations. They were all sitting around the table and they all will be involved in the building of the domestic implementation strategy.
Ms Kirby was mentioning that it will be quite an extensive consultation process and the intention is to involve all the stakeholders that exist in this area.
Ms Kirby was also mentioning the quick-action projects that are starting in addition to the foundation work. There are already a number of projects that Environment Canada is doing with groups like the Sierra Club to assist them in terms of some of our public education and outreach. They design some of the initiatives and they do the distribution and circulation and promotion of these initiatives among their groups and they are supported through Environment Canada.
They are involved and will continue to be involved. There is a full recognition that all the stakeholders must be involved in the solutions to this issue or it will not move forward.
Senator Di Nino: On another topic, developing countries obviously have a particular problem. I have heard comments like, "You people did your share of polluting when you were building dirty industries; now you are coming to us and saying, `Hey, fellows, you cannot do it.' But how will I feed my people?" Some of the developing countries, I think, have a right to ask that question.
It always amazes me how some of the European countries, after having destroyed every tree in their own countries, will come to Canada and tell us we are cutting down too many trees. I understand why and so forth, but specifically as it relates to Third World countries and countries just developing their industries, did the Kyoto summit, including the wealthier countries, look at making some investment to help these countries? If so, to what degree?
Ms Smart: You put your finger on it. That was a very strong debate that happened at Kyoto. There was very much an element from the developing countries of asking the developed countries to "show me the money". In other words, "Prove to us that you will first clean up your own backyard before you tell us to clean up ours. We have issues like poverty, et cetera, to deal with first."
The answer to that is twofold in the sense that, while the developed countries are already doing what they can to initiate the reductions, they have the alternative of exploring those mechanisms that we mentioned that are in the protocol, the clean development mechanism or the joint implementation mechanism, whereby developed countries engage in projects with developing countries. It is unclear how that will work as it is not specified in the protocol.
There is much work that needs to be done between now and November to address these issues. Foreign Affairs and CIDA will be working with Natural Resources and Environment Canada to start putting more flesh on that mechanism to see how this will work and to perhaps commence some early projects with developing countries. That will go a long way in helping to bring the developing countries into the protocol.
Ms Kirby: The framework convention which preceded the protocol does have commitments in it on financial assistance and technology transfer. That is already there. There are a number of new mechanisms that may, on a project basis, give us an opportunity to demonstrate to the developing countries that there are some elements of this that could be to their advantage.
In terms of actually getting developing countries involved in the protocol or in further commitments with the convention, one of the main approaches at the moment is to say that not all developing countries are the same. There is a view in some quarters that countries like Korea and Mexico that have joined the OECD should perhaps take on commitments like other members of the OECD, and that it is not fair to compare Korea or Mexico to countries in Africa, where we do see some real problems.
I was at a meeting a couple of weeks ago where the Brazilians were bragging to me about how their economy is now larger than ours. Some people think we should be looking at countries such as Brazil to see if we can get some commitments, not the same kind of commitments we have made, not commitments to a minus 6, but rather something that starts them down the track and makes them part of the process.
One of the things which was tried in Kyoto and later failed was the idea of having voluntary commitments. There were some countries, largely in Latin America, that were considering making voluntary commitments and might have been prepared to do so. They were stopped from doing that by the solidarity of the developing countries as a negotiating bloc, led largely by China. Many of the Latin American countries were prevented from proceeding in a way in which they might have.
We must move differently with different countries and focus on those countries that are growing fairly strongly and look to them first to be making commitments -- not necessarily the same commitments we have made, but some commitments.
We are also looking at other areas outside the negotiating forum. When you are actually in the negotiations, you tend to get negotiating positions. However, last year, the Year of the Asia-Pacific in Canada, a number of APEC meetings were held. One of those was a meeting of energy ministers in which there was a proposal put forward by the Japanese to start having the APEC countries -- many of which are considered developing countries for purposes of the convention -- make voluntary commitments on energy efficiency rather than on emissions. That is another angle that we are trying to pursue.
Senator Di Nino: I am not sure you answered my question. What I am interested in is a financial commitment by developed, wealthier countries. Has a figure been suggested that would be made available to assist the developing countries in developing their industries in a way that would be more expensive than they could afford and that would include modern technology, which would result in a better environmental situation in those countries?
Ms Kirby: That is not there. What came out of the original convention in Rio was the global environmental facility, which is a funding vehicle for providing some assistance to developing countries. It does not go as far as you are suggesting in terms of how would you rebuild or restock those economies or how would you provide all the new technologies. However, it did start some of the work that is actually now going on between developed and developing countries on the climate change issue.
Senator Di Nino: There has been some criticism of Canada for selling nuclear reactors to China without appropriate environmental study. Are there any comments you wish to make on that?
The Chairman: Everyone seems to view trading emissions as the saviour of the world, and yet, to the uninitiated, if I am a non-polluter and I sell my credits to someone who is a polluter, how have I reduced the pollution in the world by doing that?
Ms Kirby: It can only work within an overall cap. The trading system gives you a limit on the overall amount of emissions that there can be. Within that cap, you can trade between different companies that are participating. That gives you the assurance as to what the overall level of pollution will be and does give the flexibility to seek more cost-effective approaches.
This is a very new area. There is much work to be done on emissions trading, and many different ways of coming at it are being considered.
What came out of Kyoto and will be discussed in Buenos Aires is an international emissions trading scheme. We would like to see that as something where there could be full participation of private companies. However, even that subject is up for further negotiation and discussion in Buenos Aires. The commitments at this point are between governments and countries. There is a significant amount to be worked out. The country would be responsible to ensure that they did not exceed the overall limit; however, the traders would have to be linked to that. A regulatory structure of some kind will be reviewed and it could be a fairly large bureaucratic structure in order to obtain the proper assurances. There is a sense that this can provide a cheaper way of operating than other alternatives, and on that basis it is worthy of exploration.
The Chairman: How does it reduce emissions?
Ms Kirby: Emissions are reduced through the overall cap. If we view the United States' acid rain program as an example, within the United States there was an agreement on the overall limit of sulphur dioxide that could be put into the atmosphere; that limit reduced over time. It is the limit and the regulatory cap that leads to the reduction in pollution. Within that cap, you can have trading between companies. However, the actual cap cannot be exceeded without fines being incurred. There are different ways to come at it.
The Chairman: Why not have a slowly reducing limit? Why bother with trading emissions? Why do you not say, "These are our limits; you must reduce as follows"?
Ms Kirby: The sense is that some companies have better opportunities than others to reduce emissions. The way you have portrayed it is another way of coming at it. It is possible that what would be put in place is just a regulation setting the limits and you would divide those on a sector, regional or company basis. To do that you would have to have a significant amount of information and regulatory structure; yet it could be done.
The theory of trading is that it is a more cost-effective way to come at it. You have the overall limit to give you the same environmental benefit; however, within that limit, if you have a company that has a cheaper way of coming at it, then a company that has a more expensive way can deal with the other company. The same overall reduction is achieved; it is just a way of reducing costs.
The Chairman: Or you could have no reduction whatsoever, and just transfer it.
Ms Kirby: That would depend on how you set your cap. If the cap is to keep emissions at their current level, you might not have a reduction, but you could have trading within that. If your limit is to reduce emissions by 6 per cent, then your limit is set to ensure that that happens. One only trades on the basis of permits that are within that overall limit.
The Chairman: Am I correct that a country with a certain amount of carbon sinks will receive credits as a nation because of that absorption? That is a simplistic way of looking at it. It sounds like we are in the same kind of discussion.
Ms Kirby: On the sinks question, it depends on the actions you actually take. You do not get credit because you have a lot of forests, for example; you get credit for the activities you undertake. If you reforest or if you forest new areas that are not currently forested, you get credit for those. If you start denuding the forest, you lose on that basis. So it is based on human activity, based on changes. That is the sinks part of it.
On the trading part of it, if you have a company that has already made tremendous energy efficiency improvements -- this is one of your really solid performers, which has been doing a terrific job -- it may cost them considerably more to continue to reduce than it might cost a company that has not done much in the past. The question becomes: Why should a company that has already been good be penalized, if it can sell its right to another company so that someone else can do the cheap things that need to be done, so long as you are getting the same environmental benefit?
The Chairman: To go back to trading emissions, if I may for a moment, when Suncor did their deal a week or so ago, with whom did they trade, and under what regime?
Ms Kirby: It was a utility in the United States, Mohawk Electric. It was a cross-border trade. That was done in advance of there being a trading regime, so they are taking the risk as to whether a regime will be set up or not. They may have done that trade at a price that turns out to be considerably more than they would pay in a full trading regime, if we ever get there, or considerably less. They do not have a guarantee from government behind the deal.
The Chairman: So they did that without a regime in place, in contemplation that there may be a regime in place?
Ms Kirby: They think there will be value down the road, and they are willing to speculate on that value at this time, but they are the ones taking the risk because the regime is not in place.
The Chairman: Were any financial details released on that? I did not see any?
Ms Smart: I did not see any financial details released either.
The Chairman: For that to work, you would need an agreement between Canada and the United States relative to trading emissions?
Ms Kirby: That is right, and those companies think that such an agreement will ultimately be put in place.
The Chairman: We did see trading emissions work in California, with respect to the motor vehicle industry. When the committee was in California, we saw some positive examples where they pointed at trading emissions as having a very positive effect on cleaning up the air in California. So it must have some positive aspects to it.
Ms Kirby: There are positive examples. The main one that tends to get used, as I said, is the acid rain program in the United States, which applies to electric utilities. The positive side of it has tended to be that you get the same emissions reduction for what is thought to be lower cost. That has been the main benefit suggested with those. At this point our experience with greenhouse gases is not extensive enough to give us a good sense of how effective it might be in dealing with a problem that large and that complex, but there is a theory that you can take the kind of experiences we have had on a narrower basis and that similar benefits might well occur with respect to greenhouse gases.
There have been some small projects in Canada as well. They have been more of a pilot nature. There have been some pilot projects in Canada, both on acid rain and on NOx/VOC and smog.
The Chairman: I thank you both for sharing with us your examples and your viewpoints. It is a very important task that you face and one with which we wish you every success.
The committee adjourned.