1. Key requirements for implementation of the Kyoto Protocol in Canada Matthew Bramley Director, Climate Change Pembina Institute, Ottawa matthewb@pembina.org Presentation to Senate Standing Committee on Energy, the Environment and Natural Resources, March 27, 2003

2. Outline Broad concerns re Kyoto implementation –covenants/domestic emissions trading –targeted measures –purchase of international emissions units –implementation process Lessons from the United States The “One-Tonne Challenge”

3. Canada’s greenhouse gas emissions 1990-2000 Source: Environment Canada

4. Climate Change Plan for Canada Industry + electricity: covenants/emissions trading 10% of new electricity capacity from low-impact renewables Transportation: 25% gain in new vehicle fuel efficiency investments in public transit Agriculture Government purchase of international units Credits for “sinks” Not yet quantified: Partnership Fund provinces, municipalities Buildings: retrofit 20% of all buildings

5. Covenants/domestic emissions trading (industry, electricity) By far the largest element in the Kyoto plan (55 Mt) Need punitive backstop to ensure government can negotiate the full 55 Mt by end 2004 Offset credits must not duplicate other parts of the Kyoto plan (no double counting) 55 Mt must be additional to 41 Mt that other parts of the Kyoto plan seek from industry and electricity Emissions intensity targets must be adjustable in case output is higher than expected in 2008-12

6. Targeted measures (transportation, buildings, agriculture, landfills) Information, education, research and development will, on their own, only have a marginal impact Need regulated standards: –new vehicle fuel efficiency, appliance standards, renewable energy portfolio standards, building codes Need major financial incentives/disincentives: –low-impact renewables, building retrofits –can be loans, or revenue-neutral instruments Need major investments in infrastructure: –public transit

7. Purchase of international emissions units Problems with international units: –many may not correspond to genuine reductions –no clean air co-benefits in Canada –divert Canada from the path to long-term “decarbonization” of the economy –tend to maintain international inequities The government must stick to its commitment to close the majority of the Kyoto gap in Canada Canadian buyers must choose high quality international units

8. Implementation process Ratification was only the first step: continued strong government leadership needed Move the Climate Change Secretariat to PCO: –need to ensure adequate leadership by centralizing responsibility for executing Kyoto implementation –end interdepartmental squabbling –bring climate change expertise to the heart of government –recognize the importance of federal-provincial collaboration in Kyoto implementation Need to ensure equity and public buy-in by involving environmental organizations in a meaningful way

9. Lessons from the U.S. A Comparison of Current Government Action on Climate Change in the U.S. and Canada (available at www.pembina.org) The U.S. currently leads Canada in every area, e.g.: –3 states explicitly regulate CO 2 from power plants –~15 states with renewable portfolio standards –federal Production Tax Credit for wind energy –~20 states with public benefits funds (consumer efficiency) –California legislation on GHG emissions from vehicles –much higher capital investment in public transit –landfill gas capture mandatory at most large landfills One reason why the competitiveness argument against Kyoto is weak

10. The One Tonne Challenge Reduce average personal greenhouse gas emissions from 5 tonnes to 4 tonnes per year Source: Natural Resources Canada

11. Meeting the one-tonne challenge Information and education will prepare the ground but on their own have only a marginal impact Changes should be required from producers of GHG-emitting products as they know the products better than consumers and are far better organized –cars, appliances: efficiency regulations –buildings: building codes –electricity: renewable portfolio standards Where consumers are asked to change, they will need meaningful incentives, e.g.: –grants/loans for building retrofits –more attractive public transit services