Vague Copenhagen climate deal could undermine Canadian industry: expert

OTTAWA — The missing details from this week’s international climate change agreement could wind up hitting Canadian industries hard, said the chairman of a government advisory panel on business and environmental issues.

“I see this as a further delay and further uncertainty for business in terms of making investments,” said Robert Page, who chairs the National Round Table on the Environment and the Economy.

The agreement, reached Friday at the international climate change conference in Copenhagen, includes no emissions reduction targets for specific countries — but it does offer a global target limiting the rise in the Earth’s average temperature to no more than two degrees Celsius above pre-industrial levels. Countries would still need to continue negotiations to translate the political agreement into a binding international treaty.

While Prime Minister Stephen Harper said the non-binding deal had achieved Canada’s objectives of having a comprehensive agreement that included large emitting countries such as the U.S. and China, Page said it could leave Canadian exports at the mercy of climate change legislation in other countries that are contemplating new border taxes and duties on foreign products that have lower environmental standards.

Page, also a TransAlta professor of environmental management and sustainability at the University of Calgary, said it would be particularly difficult for businesses to launch into large-scale energy projects requiring multi-billion dollar capital investments without certainty about an international regime.

“Each carbon and capture and storage project is a billion plus (dollars) in terms of capital,” said Page. “It’s not just (about) the operating cost of any new carbon charges, but it’s the huge capital cost to deal with our energy export industry.”

The International Energy Agency, which advises countries on energy policies, has also warned that each year of delay in establishing new global standards to reduce carbon emissions would drive up the cost of action in the future, costing the world up to $500 billion per year.

While many countries at the Copenhagen talks were pushing for a deal that set binding caps on greenhouse gas emissions, two economists from McGill University recently published a research paper that called instead for a modest global tax on emissions that doubles every 10 years with revenues being used to deploy new technologies.

“What we’re trying to say is, these deep emission targets reflect an obvious overconfidence by grandstanding politicians who want to speed out of the starting line . . . but have built up no basis for sustaining that pace,” said Prof. Christopher Green from McGill’s School of Environment and Department of Economics, who co-authored the article with PhD student Isabel Galiana, published in the science journal, Nature.

Green added that many of the politicians committing to new targets likely will not be in office in 2020 or 2050 when the commitments must be delivered.

But instead of a global tax on emissions, the deal appears to favour a cap and trade system which sets limits on pollution and allows businesses to meet targets by either lowering their emissions or buying permits to pollute from other companies that are reducing emissions at a price determined by the market.

Green said this policy is more complicated to implement and monitor, and could create a financial bubble of investments in products that are not necessarily delivering reductions in emission.

Critics from opposition parties and environmental groups have criticized Canada’s role at the conference, arguing that it was either on the sidelines or blocking progress toward a binding deal. They have suggested that an e-mail sent by Conservative MP Colin Mayes on Thursday — which casts doubt on whether humans are causing global warming — demonstrates the real reason why Canada was not actively involved in the process and participating in key meetings with U.S. President Barack Obama at the end of the conference.

In the e-mail, Mayes questioned whether the recent global warming of the 20th century was caused by sun activity or cyclic changes, contradicting the position of governments and science academies from major nations who say that human activity and consumption of fossil fuels has caused an unprecedented rise in temperatures over the past century that threatens dangerous changes to ecosystems.

“Is this a trend that will change as we have seen recently in cooling of temperatures and rebuilding of ice caps?” Mayes asked in the e-mail. “I am careful not to overreact and spend billions of taxpayer dollars because a few scientists say CO2 is causing the planet to warm.”

Harper, who has also questioned the science and suggested that the last international agreement on climate change was a socialist plot, offered a conditional endorsement for action.

"The science continues to evolve,” he said at the end of the Copenhagen summit. “We’ve had some controversy recently because the science is not uniform. Not every scientist agrees on every detail, but we are guided by the preponderance of the evidence and that is absolutely clear.

“We should not try and kid people on this. Let me assure you, what we and others are committed to do over the next decade will have real impacts and real challenges on players in the Canadian economy. But we will obviously work with them to ensure that we balance these objectives of environmental protection and progress with economic growth.”

Page, from the University of Calgary and the government advisory panel, warned that further delays in developing that plan means more emissions that remain in the atmosphere for decades and higher cleanup costs.

“So you have this cumulative impact that the longer we wait, to a certain extent, the tougher the action then has to be, and the tougher that action has to be, then the greater the economic consequences in connection with it,” said Page. “You’re into a kind of difficult situation here, because the greatest amount of expansion of CO2 in the atmosphere is going to come from the developing counties. The developing countries are the least capable, at this point, of taking action, so these delays are only going to hinder that.”

mdesouza@canwest.com