"Although the federal government has begun to lower greenhouse gas emissions, right now the reductions are not happening fast enough to meet the 2020 target," Environment Commissioner Scott Vaughan said in a report tabled in the House of Commons, according to the Canadian Press.
Shortly after Minister of the Environment Peter Kent announced that Canada was abandoning our goals under the Kyoto Protocol, he told us that Canada is "absolutely" behind the "Copenhagen commitment of reducing greenhouse gas emissions (GHG) to 17 per cent below 2005 levels by 2020" despite leaving behind the more aggressive Kyoto target.
However, several studies indicate that this goal will not be met either. Canada 2020, a non-partisan Ottawa based organization, recently published a report stating that "there is almost no possibility of meeting the 2020 target without significant supplementary action."
It's clear that national leadership in GHG regulation, harmonizing the patchwork of provincial efforts, is required.
Several provinces have implemented policies to internalize the cost of GHGs. Alberta was the first to price carbon and focus on large industrial emitters that either trade emission permits above their allocation or pay $15 / tonne of CO2 into a technology fund to spur innovation.
More recently, British Columbia has implemented a carbon tax on fuels, equivalent to $30 / tonne and plans to recycle the revenues by reducing taxes for low income people and small business. Quebec, Ontario and other provinces are proposing similar policy instruments with the goal of internalizing the lifecycle cost of pollutants into goods.
Joseph Aldy, an environmental economist and professor at Harvard who worked on climate policy in the White House, believes these provincial efforts are positive developments, allowing Canada to test various policy instruments which may eventually lead to the development of a national approach.
He points out, however, that the fragmented provincial approach complicates international cooperation with other countries or regions, such as the U.S. or the EU. Although some Canadian provinces and U.S. states have been cooperating -- Quebec and California intend to link cap-and-trade systems -- country level bilateral agreements required federal leadership. Take Europe, for example, where 27 countries all coordinate under one cap-and-trade system called the European Union Emission Trading Scheme.
Aldy believes that if a country pulls out of one international agreement like Kyoto, only to make a commitment in another (like Copenhagen/Cancun), and does not have a credible plan for reaching the latter commitment, then it could face some domestic and international pressure.
U.S. President George Bush faced a similar situation in 2001 when he decided not to ratify the Kyoto Protocol. Instead the administration announced less aggressive targets to be achieved through a GHG registry and tax credits to incentivize clean-technology such as carbon capture and low emission vehicles.
Minister Kent has his own plan involving industry-by-industry abatement efforts rather than a Canada-wide approach. The most significant reductions from his plan originate in the electric utilities sector where Minister Kent plans on slowly phasing out dirty coal plants.
The current federal plan, even when combined with the provincial efforts, is sadly short of Minister Kent's Copenhagen goal. And he knows it but still espouses commitment to the goal.
Provincial climate legislation is economically inefficient when compared to a unified federal approach. The patchwork of provincial regulation creates barriers to investing in the most cost-effective national portfolio of GHG abatement projects.
The provinces -- each with different marginal cost of GHG abatement -- naturally focus on opportunities at home, even if it might be cheaper to abate a tonne of carbon in a neighboring province.
As a result, Canadians are paying more than they have to reduce emissions. National leadership creates the cheapest approach to climate change.
Provincial climate regulation produces duplicative staff in local ministries and is administratively more expensive and burdensome to implement than a coordinated effort. Therefore, the federal government should exercise its constitutional jurisdiction over the environment to increase administrative efficiency.
The patchwork approach is also more onerous on companies that have to report emissions, manage credits or pay taxes, and be abreast on emission regulations in every Canadian jurisdiction where they operate. These administrative burdens disappear with harmonized federal leadership.
Also, the disparity across provinces may cause industry to relocate to provinces with the most relaxed pollution regulation, causing a race to the bottom and concentrating polluting industries.
While Minister Kent has a strong incentive to coordinate a national approach, he may lack the political and public support. Climate change lacks urgency. Everyday Canadians are not threatened by the negative impacts of climate change in the same way that baby boomers are immediately concerned with old age pension. At its core, climate change is a problem beyond the next election cycle and involves not just Canadians, but people around the world. This is precisely why leadership is needed.
Minister Kent has been quick to downplay Canada's role in global climate change, saying he regularly reminds Canadians that the country "contributes less than two percent annually of the world's total greenhouse gas emissions." In the same breath he should have mentioned that we are also the third largest polluter per capita and a top-ten polluter in absolute numbers.
It's unlikely that Kent will be the Minister of the Environment in 2020, when his Copenhagen commitment will best be judged. However, knowing that the current federal and provincial efforts are insufficient, we can safely evaluate his performance today by his willingness to coordinate a national approach to climate regulation during his tenure.