By Robert Simpson

Over the past five years, Canadians have been engaged in the debate over the federal government's decision on whether or not to ratify the Kyoto Protocol on climate change. Nowhere has the debate been more vocal than in Alberta. Given the economic impact of oil, natural gas, electricity and coal, it's hardly surprising that Alberta has become the front line for the battle over Kyoto.

What is the Kyoto Protocol?

Under the Kyoto Protocol, Canada is required to cut greenhouse emissions to six per cent below 1990 levels by 2010, although a plan has not yet been produced to do so. 

Establishing a Task Force

It was the lack of a plan and clarity on the costs of ratifying the Kyoto Protocol (socio-economic impacts and international competitiveness) that prompted Francis Saville, Vice-Chairman Fraser Milner Casgrain, and a member of the ACR board of directors, to make a request to the Association's membership during the February 2002 annual meeting to establish a Climate Change Task Force. 

"Our intent is to bring home to the government that if we are going to sign the accord it needs to be done in a fair and equitable way, that spreads out whatever costs there are in a reasonable fashion and doesn't put the resources sector in a non-competitive position. The Alberta Chamber of Resources supports good environmental stewardship, but is concerned that if the Kyoto protocol is signed as it is, it could be harmful to the citizens and businesses in Alberta and Canada," says Saville. 

The ACR's Climate Change Task Force, led by Roger Thomas, President of Nexen Canada, is not the ACR's first foray into carbon dioxide related issues. The Chamber struck the CO2 Task Force in 1995 to research CO2 capture, transportation and utilization. Over the years the CO2 Task Force has investigated several schemes for sequestering quantities of CO2. 

Some new technologies include acid gas reinjection, which consumes some 700 tonnes of CO2 per day from more than 20 Alberta gas plants. Enhanced oil recovery also offers a potential for disposing quantities of byproduct carbon dioxide. These and future technological advances could play a role in greenhouse gas reduction. 

The Climate Change Task Force has adopted the principle that effective management of any long-range risks with climate change need to consider conservation, technology development, industry innovation and other mitigative and adaptive measures to address the issue. 

Another principle the climate change task force advocates is that the government must engage Canadians to ensure that they are fully informed with all aspects of the climate change issue, and that Canadians agree with any policy measures and actions planned, including all associated costs, socio-economic impacts and any cost-sharing principles. 

Among other things, it is the economic and social cost of reducing emissions that the Task Force wants clarified. The members of the Climate Change Task Force believe that the development of public policy in areas with far-reaching national implications should be based on factual data and widespread consultation involving an informed public. This means that Canadians fully understand the economic and social costs of attempting to reduce greenhouse gas emissions to the levels established in the Kyoto Protocol and that individual Canadians accept those costs prior to ratification. 

According to Minister of the Environment David Anderson, from his speech The Green Lane - Costs of Kyoto - What we Know, "The Government of Canada does not have an official estimate of the economic impacts of meeting our Kyoto target at this point. Further work from the federal/provincial/ territorial Analysis and Modeling Group (AMG) is expected in April of 2002. A complete estimate of costs can only be made once the plan for meeting the target has been specified." 

The members of the task force agree that after the direct and general costs are established Canadians will be better equipped to appropriately weigh them against the benefits. One of the benefits still requiring quantification is the amount of reduction in worldwide greenhouse gas emissions as a result of the Kyoto Protocol. 

Global Competitiveness 

As difficult as determining the real cost may be, it represents only half the challenge. An important goal of the ACR Climate Change Task Force is to ensure that Canada's resource and industrial competitiveness are not affected relative to other nations. 

The concern is that while global warming is, by definition, a global issue, under the Kyoto protocol many countries - including China, India and Brazil - are under no obligation to control emissions. What's more, the United States, our largest trading partner, will not ratify the agreement. 

So how are we supposed to proceed? If Canada is out of step with our major trading partners or with developing countries on this matter, it puts a disproportionately large cost burden on our own business community at the expense of economic growth. In addition, the task force advocates that sustainable economic growth must be maintained sectorally, regionally and nationwide while balancing environmental and social concerns. 

The Climate Change Task Force is concerned that capital investment may be diverted to developing countries that are exempt from the emission requirements outlined in Kyoto, such as Mexico and Venezuela. 

The potential for loss of capital investment is one of the primary reasons why the United States turned its back on Kyoto. 

The transcript from the 2002 Economic Report of the President, prepared by the Council of Economic Advisors states, "One of the problems with climate change policy over the past decade has been a focus on unreasonable, infeasible targets. For example, reducing U.S. emissions to 7 per cent less than their 1990 level would cost up to 4 per cent of GDP in 2010 - a staggering sum . . .Worse yet, by imposing such high economic costs and diverting limited resources, the Kyoto targets could have reduced our capacity to find innovative ways out of the environmental consequences of global warming." 

On this point  says in his speech, The Green Lane - Costs of Kyoto - What we Know, "The AMG is currently conducting an in-depth assessment of the competitiveness implications associated with Kyoto ratification. The results of this assessment are expected in late spring of 2002. This new work is necessary because of the recent concessions won by Canada on the rules of the Protocol." 

What Minister Anderson is referring to is the recent Bonn, Germany agreement and Marrakech Accord where representatives from several countries signed a less stringent version of the 1997 Kyoto Protocol. Federal negotiators in Bonn, led by Herb Gray, argued that Canada should receive credit for carbon sinks, such as the boreal forest, which would effectively allow the country to produce higher levels of greenhouse gas than originally agreed to at Kyoto. 

In Bonn, Canadian negotiators won a concession when the European Union agreed to extend Canada credits for the carbon sinks. Prime Minister Jean Chrétien said the deal "opens the way" for Parliament to ratify the refined Kyoto accord. And if 54 other countries also enshrine it in law, it will become binding internationally. 

Statement of Principles

In pursuing the Climate Change Task Force mandate the following statement of principles was developed and approved by the Alberta Chamber of Resources' directors. 

The Alberta Chamber of Resources believes that it is essential that any decision on climate change policy or consideration of any international treaties such as the Kyoto Protocol reflect the following principles: 

1. The risk of worldwide climate change represents a complex, evolving global issue that needs to be understood and appropriately addressed by all sectors of society and by all nations. 
2. Government must engage Canadians to ensure that they are fully informed with all aspects of the climate change issue, and that Canadians agree with any policy measures and actions planned, including the associated cost and socio-economic impacts, and any cost sharing principles. 
3. Canada's resource and industrial competitiveness must not be affected relative to other nations. 
4. Sustainable economic growth must be maintained sectorally, regionally and nationwide while balancing environmental and social concerns. 
5. The effective management of any long-range risks associated with climate change need to consider conservation, technology development, industry innovation and other mitigative and adaptive measures to address the issue. 

The ACR Climate Change Task Force's goal is to help clarify the terms of the Kyoto Protocol while entrenching basic principles. As a result, the Climate Change Task Force will better equip Canadians with some of the information necessary to make more informed choices on aspects of the climate change issue. The Task Force work will continue and welcomes support from all quarters. If you would like to contact the ACR Climate Change Task Force, please e-mail acr@telusplanet.net.