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Canada’s Approach to Tackling Climate Change

Canada’s Approach to Tackling Climate Change. John M R Stone Carleton University Ottawa, Canada. The Challenge. Canada’s Kyoto target is a 6% reduction in 1990 emissions (roughly 590 Mt CO 2 eq.) by 2008-12.

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Canada’s Approach to Tackling Climate Change

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  1. Canada’s Approach to Tackling Climate Change John M R Stone Carleton University Ottawa, Canada

  2. The Challenge • Canada’s Kyoto target is a 6% reduction in 1990 emissions (roughly 590 Mt CO2 eq.) by 2008-12. • The difference between Canada’s business-as-usual projections of emissions and its Kyoto target is now estimated to be at least 270 Mt CO2 eq. - some 45% above Kyoto target). • Overall energy efficiency has improved by 13% since 1990. • Emissions have increased mainly because of larger than expected growth in the economy and in fossil fuel productions (particularly oil sands). • Much greater efforts clearly required.

  3. MT CO2 - equivalent Business-as-Usual Scenario 834 270 Mt or 45% 726 596 560 Forecast Kyoto target six percent below 1990 level

  4. Some History • Canada has ratified the UN/FCCC and the Kyoto Protocol (one of the last acts of PM Jean Chretian). • Since 1998 the government has made incremental investments in climate change totaling some $Cdn 3.7 billion (a little less than half has been spent). • There have been several audits of these investments by Treasury Board, Auditor General of Canada and others (the results have been disappointing). • The government is undertaking a full review of existing programs. • Canadians have become cynical about climate change (a wait and see approach).

  5. Project GreenA Plan for Honouring Canada’s Kyoto Commitment • Announced in the federal government budget in 2005. • Recognizes the need for a long-term approach to the threat of climate change: • transform the Canadian society and economy, • maintain technological and economic growth, • achieve sustainability. • Includes: • The Climate Fund • The Partnership Fund • Renewable Energy • Continuation of some existing Programs • Estimates of program potential are optimistic.

  6. Large Final Emitters • Oil, gas, electricity generation, mining and manufacturing account for roughly 50% of Canadian emissions. • Previous approach using covenants back-stopped by legislation proved to be inadequate. • Cost to industry will be capped at $Cdn15 per tonne CO2 (honouring previous commitment). • New system will cover some 700 companies and is to achieve 45 Mt CO2 reductions. • Emission intensity approach: fixed process emissions receive a zero percent target; al other emissions are to be reduced by 15% maximum. • In-house reductions, purchases from other companies, domestic off-sets, international “green” credits and • technology investments (for expected post-2012 emission reductions) limited to 9Mt CO2, • Greenhouse Gas Technology Investment Fund. • Notice to use Canadian Environmental Protection Act has been gazetted • GHG’s to be added to list of controlled substances • Act created primarily to control “toxic” substances (communications issue). • Further consultations underway; unlikely to be in place by COP-11.

  7. The Climate Fund • Purpose: To create a permanent institution for the purchase of emission reduction and removal credits on behalf of the government of Canada. • Minister of Environment will have authority to recognize eligible projects that go beyond BAU practices: • agricultural soil carbon enhancement; • improved forest management practices • more energy efficient urban and property development; • LFE’s that have surplus credits;…….. • Government will purchase credits in a competitive process and retire them (credits can also be sold elsewhere). • Fund will invest in advance purchase of emission reductions from large strategic projects (where costs are expected to decline over time). • Fund will invest in internationally recognized “green” projects (through the CDM for example) – no “hot air” and majority of reductions in Canada. • Fund will have minimum of $Cdn 1 billion over five years and is expected to yield 75-115 Mt CO2 annually. • CEO now appointed.

  8. Partnership Fund • Partnerships with Provinces and Territories as well as with private sector. • Projects that are important to both orders of government: • clean coal; • carbon dioxide capture and storage; • electricity infrastructure; • Inter-modal transport;……… • Initially, $Cdn 250 million over five years and expected to yield some 55-85 MT CO2 annually.

  9. Renewable Energy • Wind Power Production Incentive: • budget quadrupled to $Cdn20 million over 5 years; • target of additional 4000 MW • Renewable Power Production Incentive: • investment of $Cdn 97 million over 5 years; • target of additional 150 MW; • small hydro, biomass, tidal power;……. • tax measures (such as capital cost allowances) will also encourage co-generation, energy efficiency. • Expected to achieve some 15 Mt CO2 reductions annually.

  10. Post-2012 Regimes Canadian Views • Canada is now preparing for its Chairmanship of COP-11/MOP –1 in Montreal • Montreal Declaration (and Article 3.9) • Minister Dion’s Three I’s for Montreal Declaration: • Implement (the Kyoto Protocol…) • Improve (the CDM and address shortcomings of Kyoto…) • Innovate (new approaches to post-2012 regime). • Six key elements: • Canadian discussion paper

  11. Six Key Elements • Environmental Effectiveness • long-term framework and targets, real reductions, contribute to other environmental objectives, guided by science; • Broader Participation • allows for broadest participation, includes largest emitters, sectoral approach; • Sustainability • contribute to development goals of all countries, consistent with economic growth, mobilize private investment; • Strong Global Market • maximizes market forces, international carbon market; • Technology • deployment of existing technology, development of new transformative technologies, technology agreements, common standards; • Adaptation • mechanisms to assist developing countries, new funds, linkage to mitigation, other stresses, not just developing countries.

  12. System of Global Sectoral Strategies • attempt to integrate six elements… • targets for each sector (not necessarily emissions, technology agreements)… • shift the focus to markets and away from country targets (more open access)… • competitiveness and technology orientation… • multiple points of entry… • global investment funds (ODA, technology, adaptation)… • details still being developed

  13. Some Considerations • Canadian credibility in providing leadership (emission record, lack of carbon market,...) • Legacy of Montreal – what should it be? • Parallel initiatives (UN/FCCC, G-8, Asia-Pacific partnership,…) – integrating ideas and processes… • Global sectoral strategies – how will they work? • Importance of the market • Mainstreaming climate change into development and security (less environment-centric – see Article 3) • Future role of terrestrial carbon sinks • Role of science – evolution of IPCC

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