Canada has slightly adjusted its mid-term climate mitigation targets to match US pledges. Canada’s Environment Minister, Jim Prentice, recently announced that Canada has changed its mitigation goals in an effort to harmonize with the Obama administration.

Canada’s new emissions reduction target for 2020 is a cut of 17% on 2005 levels. Heading into the Copenhagen meeting this past December Canada’s mid-term target was a 20% reduction on 2006 levels by 2020. This adjustment comes as countries report their national targets to the UNFCCC as outlined in the Copenhagen Accord. The new Canadian commitment has been labeled by environmental groups as being slightly less stringent than the previous target, and well outside the range of targets proposed by the European Union (20% cuts from 1990 levels by 2020, with the possibility of going up to 30%).

On the face of things, Canada’s adjusted target is just another step towards an apparent harmonization between the Canadian and US positions on climate change, something that Minister Prentice has been calling for since taking over the portfolio.

However, differences clearly remain on policy direction and actions for addressing climate change. While Canada will now follow US pledges for 2020, it is not clear if Canada will adjust its long term targets to match those included in legislation before the US Senate.  A climate bill passed by the House proposed a sharp cut of 80% on 2005 emissions levels by 2050, a target that the Canadian government does not seem to be considering.

Additionally, as previously reported on Climatico here, there is a big difference in stimulus spending on green initiatives on either side of the 49th parallel. Reports by the Pembina Institute have suggested that the U.S. is vastly outspending Canada on a per capita basis on renewable energy infrastructure.

In a recent speech in Calgary to oil executives, Minister Prentice indicated that any Canadian action on climate change was contingent on American actions. Critics have argued that this matching of American policy may result in indefinite delays as climate legislation faces an uphill battle in the US Congress.  This position has also resulted in furthering internal political divisions within Canada, as Quebec Premier Jean Charest came out strongly against the federal government policy.

If Canada is to wait for certainty in the American position it could be some time before Canada implements a comprehensive program to reduce emissions, either through a cap-and-trade scheme or through regulation.

While the Obama administration is making moves towards regulating carbon emissions through the Environmental Protection Agency it is unclear how far along Canada’s plans are to similarly regulate industry north of the border.  A plan to regulate emissions from heavy industry in Canada was due to be released last year (a deadline already shifted numerous times) but will now likely be stalled indefinitely.

Canada dropping intensity targets?

The Canadian Government is adjusting its climate plans to more closely resemble those proposed in the US.  This summer Environment Canada is conducting a series of consultations with respect to its greenhouse gas emissions policies for heavy polluting industries and an announcement is expected in the fall outlining the new regulations. 

Climatico has learned from confidential sources that changes are likely to include a turn-around on ‘intensity targets’ which the Conservative Government has been promoting since 2007 in its widely-panned ‘Turning the Corner’ climate plan.  This reflects the US direction towards ‘cap and trade’ plans envisioned by the Waxman-Markey Bill  and now being discussed separately in the US Senate.

According to the leaked information provided to Climatico, changes in the Canadian plan are likely to include hard emissions caps for the power and oil & gas sector (a change from previously announced intensity targets, levels not yet determined).   Hard emissions caps also being discussed for the utility & electricity sector as well as the ‘EITE’ group (energy intensive, trade exposed) which includes aluminum, cement, chemicals, iron & steel, lime, gas transmission, base metal smelting, iron ore pelletizing, pulp & paper, and potash companies.

While hard emissions caps represents a welcome shift in policy away from intensity targets, what still remains unclear is how the Government will allocate pollution permits under the proposed system, and what the actual cap will be.  Information leaked to Climatico indicates that EITE industries will likely receive their permits free instead of through an auction therefore weakening the incentives to reduce emissions.   

Critically, changes to the Canadian plan will not include an adjustment of the overall ambition of emissions reductions.  Canada’s 2020 target will remain 20% reductions from 2006 levels – a target that has received substantial criticism for not reflecting the levels suggested by scientists of the IPCC for developed countries.

Furthermore, sources indicate that the proposed changes are likely to include plenty of loopholes allowing industry to weaken the climate-impact of the measures.  For example, compliance with the emissions cap could be achieved through payment into a ‘technology fund’ instead of implementing emissions reduction measures.  The level of inter-firm trading, as well as domestic and international offsets that would be allowed has also not been determined and the government is seeking input from industry on these matters.  It also remains unclear who else, aside from those being regulated will be consulted regarding these proposed changes.

With multiple meetings scheduled between Prime Minister and President Obama in the fall, the renewed discussion of a possible fall election, and the pivotal UN climate meeting in Copenhagen this December it appears the Canadian Government is trying to get its house in order on the climate front. The proposed changes to the ‘Turning the Corner’ plan start to fill the void in Canadian climate policy, but they still have a long way to go.

Canadian coins (Pieper)

The Canadian province of British Columbia has a carbon tax that is not yet a year old and already it is on thin ice.  First announced during the delivery of the 2008 budget and implemented July 1, 2008, British Columbia`s carbon tax policy came as a surprise to many observers in the Canadian environmental field and was considered a significant shift in policy on climate change for the Government of British Columbia.  The orgin of the policy is thought to be as a result of the direct influence of Gordon Campball, Premier of British Columbia, who has been strongly influenced by the ‘green’ California Governor Arnold Schwarzenegger.

In the context of an increasing sense of urgency about environmental policy making, consideration of this new carbon pricing policy is instructive as the suggestion has been made that the B.C. carbon tax may be internationally significant as a model of carbon pricing policy.

However, despite the passing of the 2008 British Columbia Budget containing the carbon tax measure, the future of British Columbia’s environmental tax policy remains uncertain. 

National politics may also influence the future of British Columbia carbon tax policy.  In the Canadian federal system, the sub-national jurisdictions (10 provinces and 3 territories) retain control over natural resources, environment, and energy policy.  As a result, the Canadian climate change and energy policy landscape has been described as a ‘patchwork’, differing significantly between the provinces in scope, scale, and instrumentation, and which suffers from a lack of coordination and leadership from the federal government.  Without coordination of efforts across Canada, the compatibility of B.C.’s carbon tax with other provincial and federal actions might be limited, thereby reducing the overall effectiveness of the measure.  In the October 2008 federal election the Canadian public clearly rejected the central policy of the opposition Liberal Party of Canada – a nation-wide carbon tax similar in structure to that of the provincial tax in British Columbia.  Demonstrated public opposition to carbon tax measures across Canada may influence future decisions to increase the rate of B.C.’s carbon tax. The current rate is $10 CAD per tonne of carbon dioxide, or carbon dioxide equivalent, emissions scheduled to escalate $5 per year until reaching $30 per tonne in 2012.  Those increases, and even higher rates in the future, will be required in order to achieve significant GHG reductions but they are at risk in an uncertain political and economic climate.

The effectiveness and the future existence of the B.C. carbon tax policy might also be influenced by international developments in carbon pricing, climate change negotiations, and global economic conditions.  US President Barack Obama and Canadian Prime Minister Stephen Harper have both signalled their interest in the creation of a North America wide emissions cap-and-trade scheme and potentially new emissions reduction mechanisms will emerge from ongoing international negotiations proceeding under the United Nations Framework Convention on Climate Change. The impacts of the current global financial crisis might also have an impact on the future plans for increasing the rate of British Columbia’s carbon tax.   Despite the fact that emissions tend to decrease during economic recessions, political reactions to the downturn might influence the ability of the carbon tax to reduce emissions effectively when the economy recovers (eg. if the carbon price does not escalate over time according to the proposed plan). 

While it is too early to evaluate the overall impact of B.C.’s carbon tax, given increasing international trends towards the implementation of market-based mechanisms to meet stringent environmental targets (should the policy remian) B.C. may gain a ‘learning-by-doing’ advantage for having first implemented a significant carbon pricing policy in Canada and North America.

On Thursday of this week Barack Obama will make his first visit to a foreign country as President of the United States.  Travelling north to Ottawa, Canada to meet with Prime Minister Harper, Obama is once again honouring a long held tradition of newly elected US Presidents (President Bush broke with tradition by visiting Mexico first).

While only lasting a couple of hours, Obama’s meetings on February 19 with Canadian politicians will primarily be about the economy, but will also include a number of other agenda items including energy and climate change policy.

Given the new President’s massive approval ratings in Canada (surveys have indicated that the Canadian public is very supportive of Obama, liking him more than their own leaders) it is very important for the Canadian government to appear to be on side with Obama’s green mission and the potential of a newly engaged America on the environment and climate change file.

Canadian policy makers have anticipated Obama’s visit and have gone to the media to demonstrate that they are on board with the new US President’s green policies.  While on the one hand cozying up to Obama by supporting the creation of a North America wide cap-and-trade-system for greenhouse gases, the Canadian Government is also claiming independence in climate policy.  Environment Minister, Jim Prentice recently wrote the following in a letter to the editor in Canada’s largest paper, The Toronto Star:

“It is misleading to suggest that our approach to climate change is being led by the United States…..It has always been our plan…to move to a hard cap-and-trade regime. It has also been our intention to forge an immediate relationship with the new U.S. administration to address climate change, and we are committed to working to develop and implement a North America-wide cap-and trade-system for greenhouse gases.”

The elephant in the room, previously discussed in this space, is the Canadian tar sands.  During the meeting this week Prime Minister Steven Harper, who hails from Canada’s oil rich province of Alberta, will be keen to press upon the US President the importance of tar sand crude for North American energy security. The Canadian Government is well aware of comments made by Obama`s staff during his campaign about so-called `dirty oil` not being appropriate for import into the USA.  Canada`s ambassador to the US, Michael Wilson recently identified that one of the Canadian government’s largest challenges when dealing with Obama`s administration will be the reputation of delivering dirty oil to the US.  Canadian politicians are certainly keen to ensure that Canadian tar sands get special recognition under any North American wide system to regulate greenhouse gases.  The Province of Alberta has even gone so far as to demand that it be included in any future discussions about North American climate policy.

President Obama’s visit this week brings into focus comparisons of Canadian and American climate policy and will inevitably lead to further discussions regarding the integration of North American climate and energy policy.  But just how close are the two nations policies? And how realistic is it that they would be able to be easily harmonised?

Analysis by the Pembina Institute suggests that US and Canadian climate policies are significantly out of sync.  Starting with a comparison of green economic stimulus incentives, Obama’s investments in green energy and energy efficiency are about 5 times greater per person than Canadian investments ($84  billion in the US economic stimulus compared with $1.657 billion in the recent Canadian budget).  On regulatory mechanisms Prime Minister Harper has put forward ‘intensity-based’ targets on industrial emissions (which allow for absolute emissions increases) while President Obama will enact ‘hard caps’ on emissions.

Some similarities do exist, both Canadian and American per capita emissions are about 23 tonnes per person (according to figures from 2005) and reduction targets are similar.  Harper has pledged to cut 2006 emissions by 20% by 2020, while comparable US pledges under Obama total about 15%.  So while Canada’s emissions targets may actually be steeper than the US targets, as these countries work towards establishing a North American wide system to tackle greenhouse gases really what matters is effective implementation.  As of now Obama’s environmental actions in the last 3 weeks are getting more attention than the Canadian government’s actions in the last 3 years.

Canada’s Commissioner of the Environment and Sustainable Development, Scott Vaughan, has recently produced a report highlighting a significant failure on the part of the Government of Canada in ensuring that public money spent on environmental initiatives are actually achieving results.

As a member of the Government of Canada’s Office of the Auditor General, the Commissioner is tasked with the responsibility of reporting on the effectiveness of public environment and sustainable development programs and policies.  The Commissioner is also responsible for reporting to Parliament at least once every two years (until 2012) on Canada’s progress towards meeting its Kyoto Protocol obligations.

In his annual report for 2008, Vaughan heavily criticized the government for spending billions of dollars without putting in place mechanisms to measure the impact of ‘green’ expenditures.  He also charged that Canada is not on a path towards sustainable development and that the government cannot demonstrate that environmental programs are achieving intended results.

The report is particularly critical of two measures introduced as part of the widely criticised ‘Turning the Corner’ Climate Change Plan released in 2007.  The first suspect program described by the Commissioner is the Public Transit Tax Credit, which was originally projected to result in annual reductions of 220,000 tonnes of greenhouse gas emissions.  Environment Canada lowered the estimated reductions resultant from this program one year later in 2008 to 30,000 tonnes per year, suggesting that the costly $635 million program will have a negligible impact on Canada’s greenhouse gas emissions.  The Commissioner concluded in his report that this program is the result of ‘flawed’ analysis on the part of Environment Canada – but it also seems possible that political motivations during previous election cycles played a role in the formulation of the tax credit.

In the report, the Environment and Sustainable Development Commissioner also highlighted the failure of the $1.519 billion Clean Air & Climate Change Trust Fund in producing ‘real, measurable, and verifiable results’.  Vaughan noted that the fund (intended as a mechanism to transfer monies to the provinces for climate change programs) included no conditions to allow for the monitoring of the use of the funds with the consequence that any potential emissions reductions from the program were unquantifiable.  At issue is a fundamental challenge with implementing national policy in Canada, the constant struggle between the federal government and the provinces.  The decentralised nature of political power in Canada often makes national action on the part of federal government difficult.  Very frequently there is no legal obligation for the provinces to spend money transferred to them for the purposes announced by the federal government – in this case, greenhouse gas emissions reductions.   The Trust Fund program was projected to account for 26% of Canada’s emissions reductions during the 2008-2012 time period, but given the lack of analysis regarding expected cuts and non-ability to measure results it seems unlikely that emissions reductions attributable to this program will materialise.  The Commissioner particularly took exception with the government’s repeated claims during 2007 and 2008 that specific GHG cuts were expected from this program when it was fully aware that the government did not have the capacity to quantify any such potential reductions. 

This is not the first time that the Auditor General’s office has sounded alarm bells about climate policy in Canada.  Former Environment and Sustainable Development Commissioner Johanne Gelinas, released a report filled with strong criticism of Canada’s federal government inaction on climate change in 2006.  One might wonder what the 2009 report will look like given Canada’s track record on Kyoto obligations leading up to Copenhagen at the end of this year.

Crude oil production from the tar sands of Canada’s Alberta province are estimated to cause three times the amount of emissions than conventional oil production and was recently described as ‘Canada’s dirty secret’ by environmental activists at the United Nations climate change meeting in Poznan, Poland.

Alberta’s Premier, Ed Stelmach has faced a barrage of criticism over his province’s environmental record.  Managing the public image of Alberta’s oil industry has become a full-time job for Stelmach who has had to deal with mounting public pressure calling for reductions in the pace of development of Alberta’s oil resources.  Emissions from Alberta represent about a third Canada’s annual greenhouse gas emissions (despite having only 12% of its population).  Adding to the public relations challenge for Alberta’s oil patch, a private lawsuit, supported by the Sierra Club of Canada and Forest Ethics, has recently been launched against the Syncrude oil company who’s open air toxic tailing ponds in Northern Alberta resulted in the deaths of 500 birds in the spring of 2008.

With President-elect Obama promising aggressive actions during his administration to reduce US greenhouse gas emissions, the question being raised north of the border in Canada is: how will Alberta’s tar sands industry be affected?

Obama has indicated that he wants to move America away from ‘dirty, dwindling, and dangerously expensive’ oil, a  move that could possibly influence US investment in Alberta’s oil industry. US mayors have signed a statement questioning the carbon footprint of the tar sands oil production which is expected to expand from 1.3 million barrels a day to 3.5 million over the next decade.  Canada is the largest supplier of oil and gas to the United States.  Fearing a withdrawal of US investment Alberta’s Premier has been making numerous trips to the United States touting Alberta’s “affordable energy” during this period of economic downturn.  In order to protect the industry, Premier Stelmach has asked fellow Conservative, Prime Minister Steven Harper for a seat at any future North American climate change negotiations. 

Meanwhile, the Province of Alberta has set greenhouse gas emissions targets based on intensity of production which will allow overall emissions to continue to rise until 2020.  These targets have drawn harsh criticism from environmental groups for not being in line with climate science which suggests that stronger, absolute emissions reductions are required globally over that time period in order to avoid dangerous climate change impacts.  Alberta’s long term targets for greenhouse gases are 14% reductions from 2005 levels by 2050.  Companies can avoid the intensity-targets by buying credits from other firms or paying $15/tonne into a technology fund, presumably to be used towards investments in the research and development of carbon capture and storage technologies.

Federal politicians in Canada also appear to be in no hurry to dramatically slow down the pace of development in Alberta’s tar sands – a pace of development so rapid that it calls into question Canada’s ability to reach the proposed emissions targets of Prime Minister Steven Harper’s government (20% cuts by 2020, based on 2006 emissions) which also include intensity-based targets for the oil industry.  The new Canadian Environment Minister Jim Prentice has made it clear that the government will not harm the weakening Canadian economy in order to pursue environmental progress.  The government believes that the environment and economy are polar opposites (not surprising as Mr. Prentice was formerly the minister for industry).

So for the time being it’s business as usual in Canada – but with a minority government that barely survived the fall session of parliament, a new leader of the opposition, and a confidence vote on the budget later in January, political forces are at play which will shape Canada’s climate change and energy policy in 2009.

To see a slide show of Alberta’s oil sands published by the Washington Post in June 2005 click here.

Selected photos from the UNFCCC COP 14 in Poznan, Poland.

The Prime Minister of Poland speaks at the opening ceremony of the United Nations climate conference in Poznan.

UNFCCC Executive Secretary Yvo de Boer

Main Hall, UNFCCC COP 14

Yvo de Boer addresses youth at an Intergenerational Inquiry on Climate Solution

The Intergenerational Inquiry of Climate Solutions UNFCCC side event

UNFCCC Computer Lab at COP 14

Not even two months after the last federal election in Canada (Oct.14, 2008­) signs are strongly pointing towards the defeat of Prime Minister Stephen Harper‘s minority government, as early as Monday, Dec. 8, 2008.

In Flux: Canadian Parliament (Source: Don MacKinnon @ flickr)

Opposition parties have signed a deal this week outlining their plan to form a coalition government following the predicted defeat of the Conservative government in a confidence vote early next week. According to the opposition, they are preparing to bring down the government over their lack of response to the financial crisis. The proposed coalition government would be led by the former President of the UNFCCC COP 11 Stéphane Dion, leader of the Liberal Party of Canada. His cabinet would consist of members from his own party and those of the New Democratic Party (NDP). Both parties advocated for deeper climate targets than the ruling Conservatives in the last election, however the Liberal Party suffered at the ballot box largely due to public (and internal) opposition to a controversial carbon tax plan.

The formation of a coalition government is unheard of in modern Canadian politics. The timing of this rare political manoeuvre could have an impact on Canada’s representation at the Poznan COP. It is now unclear as to who will show up in Poland to represent Canada for the high-level segment in the second week of the conference. If the Conservative government falls, it is likely that a NDP member would be assigned the Environment portfolio given the Liberals preference for the cabinet posts related to the economy. It has been reported that part of the agreement signed between the Liberals and NDP would include support for a North America wide cap-and-trade market to restrict carbon emissions. Even if the government does not fall before the Poznan meetings conclude, Canadian participation in the meeting may well be overshadowed by domestic politics.

This is a cross posting from the Canadian Youth Delegation to Poznan blog.