1. Page, Rivers and Climate Policy: A Comment Chris Green McGill University Queens IIGR Conference on Environmental Policy October 17, 18, 2008 1

2. The Papers The two papers provide good background -The Rivers paper surveys past policy failures and current provincial/federal carbon pricing initiatives The Page paper focuses on Kyoto failure and - goes beyond carbon-pricing to consider technologies - implicitly sends a warning signal to avoid falling into a Kyoto trap in the next international agreement Neither paper provides any idea of the magnitude of the global challenge to stabilizing climate 2

3. What I intend to do I view climate change from a global perspective The benefits from Canada’s actions depend heavily on: -what other nations are able to do -what it is that we do that could help reduce emissions elsewhere in the world Before turning to these points, I note the following - Canadian GHG emissions fall 2004-2006. Why? - A carbon tax is essentially a tax on coal. Why? The next two slides explain 3

4. Canada’s GHG Inventory In 2006, Environment Canada reported 2004 GHG emissions at 758 MtCO2. The estimate for 2004 has now been reduced downward to 743 MtCO2 By 2006, emissions have fallen to 721 MtCO2. Environment Canada attributes the decline to: - warmer winters in the last 3 years - a switch to natural gas in some industrial activities - reinstatement of Ontario nuclear generators taken off line in 1990s The next slide indicates what a $10/tCO 2 tax means 4

5. A $10.00/tCO2 Carbon Tax CO2 $ Current (tonnes) Price Coal/tonne 2.86 28.60 $16-110.00 Oil/bbl 0.37 3.70 ~$120.00 Gasoline/gal 0.0088 0.09 ~$3.00-4.00 NG/1000cu.ft 0.055 0.55 $10.00-11.00 NG/1000cu.m 2.025 20.25 ~$400.00 5

6. The Magnitude of the Stabilization Challenge Climate change is essentially an energy technology problem, and the challenge to stabilizing climate is huge This is not the prevalent view. IPCC WG III claims the required technologies are available, or awaiting “commercialization”. WG III also claims the barriers are “socio-economic” and institutional, not technological The WG III claim has been challenged by Hoffert et al in Nature and Science (1998, 2002); Caldeira et al, Science, 2003; Pielke et al, Nature, 2008, and by others Pielke et al (2008) identify a source of understatement 6

7. 7 Baselines: “Frozen” and Emission (IPCC WG III AR4, Ch.3, p.220)

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10. What is Happening? A major part of the story is the nature of the development process in China and other populous developing nations Development in these countries is very energy intensive, in part due to urbanization Very energy intensive materials are required for high rise development--see next slide Without scalable, non-carbon emitting technologies that are transferable, global emissions will continue to increase 10

11. 11 China: Energy Intensive Production

12. Implications for Canada Using current emission scenario baselines will understate the difficulty and cost of achieving deep reductions in emissions, at least in absence of new technologies Carbon pricing without a technology policy is a bankrupt approach to the problem, in Canada and for the world Canada’s success with CCS may be crucially important to what happens to global emissions Thus Alberta’s current approach to reducing emissions is very important. It combines a tax at the margin with payment to a technology fund, especially for CCS 12

13. Conclusion Canadian climate policy should not be limited to federal-provincial naval gazing Pricing carbon is not nearly enough. New energy technologies are required. Canada should contribute to the global energy technology challenge The most important climate policy decision awaiting the new government is its policy stance at Copenhagen in 2009. A repeat of Kyoto would be a setback if stabilizing climate is the objective 13