Flawed figures, Squandered Leadership

December 20, 2011

By James Tansey

The climate conference in Durban could have had a very different outcome, but instead, the Federal Government’s withdrawal from the Kyoto protocol not only damaged Canada’s reputation internationally, it also squandered an opportunity to give climate policy new momentum at a time when no other country has the same capacity to lead.

Kyoto is flawed; it is cumbersome, has limited oversight and even if it had been implemented by the signatories, the targets are lower than scientists believe is necessary to reduce climate change.

But it was the only serious attempt to negotiate a binding agreement among the world’s largest emitters.

Canada’s capacity to lead on climate policy is a function of the fact that we have weathered the financial crisis better than any other country and that high fuel prices make the extraction of our natural resources, including natural gas and the oil sands, financially viable. But most importantly, the Federal government’s estimates of the financial cost of compliance with Kyoto are wrong.

If Canada had approached the international negotiations with an attitude of leadership and responsibility, it would have made a dramatic difference in Durban.

Countries that won’t meet their obligations under Kyoto through emissions reductions alone have the option of buying reductions from developing countries through the
Clean Development Mechanism, in the form of offsets.

Minister Peter Kent suggested that, in this scenario, the cost of complying with Kyoto would have been $13.6bn in total, or $1600 per family in Canada (or $400 per person), although it’s hard to understand where these figures come from. Canada must purchase 700 million tonnes of CO₂, with the average price, according to Kent, at $19 per tonne.

However, at current prices in the global carbon markets (roughly $6 per tonne), Kyoto compliance could cost less than $4.2bn a year nationally or about $120 per Canadian citizen.

If you treat these figures as an investment in renewable energy and energy efficiency
projects, or in the conservation of forests, then it is hard to believe that many people would object.

In a recent Environics poll, 74% of Canadians agreed that CO₂ emissions should be regulated even if that results in higher energy prices, and support for other climate policies, such as a carbon tax is at an all time high with almost 6 in 10 people in favour.

We’ve benefited enormously from the steady economic growth over the last two decades
that has also led to an increase in our emissions. Rather than reducing greenhouse gases by 5.2% from 1990 levels, as outlined in Kyoto, Canada’s emissions have grown by 30%, roughly 162 million tonnes.

In 1990, the starting year for Kyoto, our GDP was $583bn and in 1997, when Canada adopted Kyoto, GDP was $614bn. Today, Canada’s GDP is currently $1.785 trillion; expansion of the energy sector has been a major driver of the Canadian economy over that period.

If the Federal government’s exaggerated $1600 per household cost of Kyoto is a one time expense against a tripling in the size of the economy, it starts to look quite reasonable.

On the other side of the table, even China indicated a willingness to participate in negotiations about  targets, and has already made progress in the development of pilot cap and trade programs in select provinces and cities.

If Canada had taken a different approach in Durban, it might not have saved the Kyoto
Accord but it would have re-established Canada as a global leader that is willing to step up and demonstrate a responsible and affordable commitment to tackling climate change. Outside of action by Provinces like Quebec, Ontario and British Columbia, Canada’s position on climate policy is an international embarrassment.

Dr. James Tansey, is CEO of Offsetters, which helps organizations and individuals understand, reduce and offset their climate impact. He is also an associate professor at the Sauder School of Business at the University of B.C. James is a frequent contributor to GLOBE-Net