May 21, 2009
by Joe Terrett
Let’s not presume the abundant supply of oil deposited in Alberta’s oil sands—a supply second only to Saudi Arabia’s reserves—will continue to be an easy sell in the energy hungry US. The Canadian and Alberta governments must heed the flashing amber light coming from the Obama administration and the environmental awakening south of the border that’s resulting in worrisome remarks about “dirty oil” and moves towards protectionist measures reminiscent of the never-ending softwood lumber saga.
President Barack Obama is moving fast on capping greenhouse gas emissions. There’s a bill before the US House of Representatives that would impose duties on firms whose host governments are considered to be “lax” about limiting greenhouse gases, and some of the duties will doubtlessly be put to good use financing rebates for domestic energy intensive industries to help with the cost of compliance.
One of the authors of a report by the National Round Table on the Environment and the Economy describes what’s going on in the US as a significant protectionist threat. Pragmatic Federal Environment Minister Jim Prentice also acknowledges Canada may have to adopt regulations and enforcement standards “comparable” to whatever the Obama administration eventually passes.
But rather than “wait and see” what the US is going to do, the 121-page National Roundtable report strongly suggests Canada moves quickly to apply uniform standards to get its greenhouse gas emissions under control. Indeed, our emissions reduction efforts are all over the map. The Harper government has been muddling along with a plan based on intensity targets that suggests by 2050 this greenhouse gas thing should be more or less licked. Saskatchewan also appears to favour intensity targets while BC has opted for a carbon tax. Ontario, Alberta, Manitoba and Quebec have joined with several US states and have embraced the cap and trade model, while the Atlantic provinces are fiddling with various initiatives.
The report rejects intensity targets and carbon taxes, instead recommending a hard cap applied by Ottawa on emissions from all sectors by 2015, and auctioning carbon permits to businesses by 2020. In a typical, politically non-committal response, Prentice indicated he’ll take a “serious look” at the report’s findings, adding that the government’s plan to reduce emissions is on track.
That doesn’t mean Ottawa is on the right track. Like it or not, the US is calling the tune here and we have to dance to it. While Ottawa is working closely with the US to come up with a North American response to climate change, it would be helpful to industry to have one set of standards to work with at home, allowing it to make the appropriate investments and avoid as much as possible financing through duties US industry’s emission reduction efforts.