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Kyoto gets green light, Alberta turns red Canadian government recommits to climate change treaty without plan to achieve greenhouse gas reductions; Alberta warns industry not to strike deals with feds Gary Park Petroleum News Calgary Correspondent
Just when it seemed a new government might be ready to take a new course on the Kyoto climate change treaty, Canada has veered back towards an old path and reignited old animosities with Alberta.
In opening a fresh session of Parliament, the government of Prime Minister Paul Martin made an unequivocal pledge to uphold its commitments to the Kyoto accord.
Meanwhile, the Alberta government has created unease in the oil patch, with Environment Minister Lorne Taylor telling companies they could lose tax credits or royalty breaks if they negotiate unilateral greenhouse gas agreements with the Canadian government.
Energy Minister Murray Smith, in a follow-up letter, tried to soften Taylor’s message by assuring the industry there are no firm plans on the table to change the tax or royalty structure.
As things stand, Canada’s existing Kyoto plan is 25 percent short of the greenhouse gas emissions target it must achieve to comply with Kyoto.
The Martin government declared it would “respect its commitments to the Kyoto accord ... in a way that produces long-term and enduring results while maintaining a strong and growing economy.
“We have begun and we will persevere,” the government declared.
In reaffirming its intention to meet the Kyoto challenge, the administration said it “must be ambitious if we are to leave the planet in better shape for future generations. And so we must.”
A big chunk of that challenge is to cut emissions by 240 million metric tons under the controversial accord. 2002 plan 25 percent short of compliance A November 2002 plan issued by former Prime Minister Jean Chrétien accounted for only 180 million metric tons, leaving 60 million metric tons to be addressed.
Environment Minister David Anderson said Martin “correctly put his finger” on that gap.
“The (Chrétien) plan was not complete and we will have that completed,” he said.
But Anderson was unable to suggest where the government will find more emissions cuts, other than expressing optimism that ways would be found to conserve energy and limit emissions.
He doubted that the large industrial sources of greenhouse gases, which are already expected to carry 25 percent of the Kyoto load, will be asked to do more.
Environmentalists were less inclined to waver. John Bennet, a spokesman for the Climate Action Network, proclaiming that “Kyoto lives,” said 50 percent of emissions come from large industries which have so far “been given an easy ride.” Alberta girds for battle While the Canadian government starts grappling with that objective, the Alberta government has girded itself for battle.
Taylor’s mid-January letter to industry leaders said oil and gas tax credits or royalty breaks would be withdrawn from any companies that support federal climate-change plans without consulting the province.
“We think it is only fair to advise you that costs related to a federal-only system will not be deductible from provincial royalty or income tax purposes,” he warned.
Taylor’s hard line was triggered by a climate change agreement between the Forest Products Association of Canada and the Canadian government that excluded the province.
He issued a reminder Feb. 10 that Alberta owns its natural resources and, for that reason, is determined to see a single set of Kyoto rules that are acceptable to both governments and the petroleum industry.
In driving a wedge into the issue, Alberta has created a quandary for companies, especially those in advanced stages of developing oil sands projects, who believe they have no choice but to build Kyoto reductions into their plans. Industry wants to stay clear of inter-government feud Industry and company leaders indicated they are reluctant to get pulled into inter-government feuding and said they are confused by Alberta’s mixed signals, given that the province has hinted it may reduce royalties for companies who reduce carbon emissions.
Just as perplexing is the course being taken by Martin.
Immediately after being sworn in as prime minister Dec. 12, he said Canada has yet to develop a plan that shows whether it can implement Kyoto without damaging the economy.
“What we need is a plan,” he said. “And we have not yet developed that plan, certainly not to my satisfaction.”
Perrin Beatty, president of the Canadian Manufacturers and Exporters, said the federal government stumbling over how to live up to the Kyoto Protocol is harming manufacturers and heavy industry at a time they can least afford it.
He said exporters are being hammered by the strong Canadian dollar and manufacturers are moving their operations out of Canada “yet the government drifts along with a (Kyoto) plan, leaving the risk that industry might be asked to carry more of the cost of meeting Kyoto.”
Beatty said Martin has yet to provide specific guidelines on how Canada will meet the Kyoto targets and “who exactly will pay.”
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