TCS Daily

Maple Leaf Jitters: Canada Blinks on Kyoto

By Willie Soon - December 4, 2001 12:00 AM

It`s a rule of thumb that when President George W. Bush leaves the United States to visit other Western countries, the press can be counted on to report the conventional wisdom that US opposition to the Kyoto Protocol regulating climate change runs afoul of the popular opinion and official positions of our Western allies.

However, since President Bush labeled the Kyoto "fatally flawed," this conventional wisdom has been changing. Consider our friends to the north, the Canadians.

Canada`s Minister of Industry, Brian Tobin, recently addressed a group of Canadian mining executives. Discussing the nation`s official environmental policies, he said, "I think Canadians are prepared to pay a price... in the interests of a cleaner environment and a global solution to sustainable development."

Now, we expect this sort of posture from Canadian ministers. And we expect it from ministers of European countries as well. What we do not expect is what Minister Tobin said next.

"But we`re not prepared to shut down sectors of Canada`s economy without thinking very carefully what it is we`re signing on to."

Canada and every major European country have not yet ratified the Kyoto Protocol. And that`s for a good reason. What you will not hear reported in the press -- and what Minister Tobin`s comments so clearly and honestly reveal -- is that Canada and Europe are absolutely terrified of the implications of Kyoto for their nation`s businesses and their economies as a whole.

For instance, Canadian businesses are concerned about losing their competitive edge to the US and Mexico by self-imposing carbon dioxide reductions in accordance with Kyoto. Charlie Fischer, the president of Nexen Inc., a Canadian-based company with net sales of crude oil, natural gas and chemicals close to $3 billion, put the situation starkly.

"We`re an international company, we invest money not only in Canada, but in the United States and other parts of the world. If the opportunity to invest in Canada becomes uncompetitive, then we will reallocate our capital to other jurisdictions."

Minister Tobin reminded the Canadian public that Kyoto`s approach does not make sense globally because it does not hold responsible some of the world`s largest emitters of greenhouse gases, like China, India and Russia - this is one reason the Bush administration described the treaty as "fatally flawed."

Canada is ranked 8th in the world in greenhouse gas emissions and under the terms of the treaty would reduce emissions about 20% from 1990 levels by 2012. Russia is the world`s third largest emitter of greenhouse gases. And Russia is an "Annex B" country under the protocol, just like the US and Canada. But under Kyoto it has been assigned an emission reduction target of 0%.

Wishful Thinking

Despite the concerns raised by Minister Tobin and Canadian business leaders, the Canadian Minister of Environment, David Anderson, recently argued in the National Post newspaper that implementing Kyoto in Canada "would cost less than future damage" and that reduction of carbon dioxide emissions in Canada "will reap vital environmental and health dividends" with "cleaner air, more smog-free days, fewer cases of respiratory diseases and asthma." And Eileen Claussen, president of the Pew Center on Global Climate Change, said recently that companies "know that their climate-friendly investments will pay off."

Not so, says Ross McKitrick, an economist from University of Guelph "Numerous studies -- including those by [Anderson`s] own government -- show that Kyoto will cause our economy to contract. The academic dispute is not whether Kyoto will harm the economy, but by how much... If, as Mr. Anderson argues, large cuts in energy use were a path to a vast new prosperity, why do we need to use regulation to force it on industry?"

As for cleaner air and better health benefits under Kyoto, there is little evidence to support such claims. Canadian air quality has improved over the last 25-30 years despite increased carbon dioxide emissions. Except for ground ozone, major forms of air pollutants like carbon monoxide, sulfur dioxide, suspended air particulates and lead have been decreasing substantially, by 50% to 90%.

In fact, the 1997 levels of these major air pollutants in Canada are well below the health levels permitted by the Environment Ministry that Mr. Anderson oversees - even though from 1974-1997, total fossil-fuel, carbon dioxide emissions increased by about 36%. Emissions did drop sharply from 1997-1998, by 8.4%, but that might possibly be related to lower winter heating energy demands linked to the large El Nino warming of 1997-98.

Minister Tobin and Canadian business leaders are beginning to understand the full implications of Kyoto. And they are beginning to understand what their neighbors to the south in the United States have understood all along.


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