ENSU Committee Meeting

STANDING COMMITTEE ON ENVIRONMENT AND SUSTAINABLE DEVELOPMENT

COMITÉ PERMANENT DE L'ENVIRONNEMENT ET DU DÉVELOPPEMENT DURABLE

EVIDENCE

[Recorded by Electronic Apparatus]

Wednesday, November 5, 1997

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[Translation]

The Chairman (Mr. Charles Caccia (Davenport, Lib.)): Good afternoon, ladies and gentlemen. We are resuming our work. Pursuant to Standing Order 108(2), we are considering climate change issues in relation to Canadian preparations for the Conference of the Parties on the United Nations Convention on Climate Change.

[English]

We apologize for the delay, which was due to technical reasons, and we thank the technicians for their prompt assistance.

Our witness today from Environment Canada is Mr. Robert Audet, from the Global Air Issues Branch. From Natural Resources Canada we have Mr. Nick Marty, director of the Demand Policy and Analysis Division, and Mr. Neil McIlveen, director of the Energy Forecasting Division.

We welcome you to this committee. Please proceed in whichever order you wish. Presumably Environment Canada will go first and Natural Resources later, possibly by way of an intervention of ten minutes, so that at the end of the three interventions questions can be asked before we adjourn at 5.30 p.m.

Would you please start, Mr. Audet.

[Translation]

I would ask you to introduce yourselves and give your position title. Welcome to the committee.

Mr. Robert Audet (Global Air Issues Branch, Environmental Protection Service, Environment Canada): Mr. Chairman, ladies and gentlemen, I would first like to thank you for inviting us to come and speak to you about Canada's Second National Report on climate change.

My presentation will cover two main points. I will first talk about the reason for presenting this report and then refer to its highlights. With your permission, I will do the first part of my presentation in French and the second in English.

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The purpose of Canada's Second National Report on Climate Change is to meet the international commitments made by the government in the Framework Convention on the United Nations on Climate Change. The abbreviated form is the FCCC, or CCCC in French.

In 1992, Canada and over 150 other countries signed the Framework Convention, the objective of which was to get industrialized countries to reduce their greenhouse gas emissions to 1990 levels by the year 2000.

Articles 4 and 12 of the convention provide that the parties must establish and regularly update national emissions inventories, publish them and make them available to the Conference of the parties. The inventories include the anthropogenic emissions of any greenhouse gas not covered by the Montreal Protocol.

The Second National Report on Climate Change was drafted in accordance with a detailed set of directives from the subsidiary body for scientific and technological advice and from the subsidiary body for implementation of the FCCC.

The directives were drafted for three main reasons. First, they help the member countries meet their commitment, draw up national inventories, update them, publish them and make them available to the Conference of the parties. Second, they are there to facilitate the presentation of national reports, including the drafting of useful technical analytical documents, while presenting the information in a uniform, transparent and comparable fashion. Finally, the guidelines are there to ensure that the Conference of the parties has enough information to carry out its responsibilities regarding the evaluation and implementation of the FCCC and the relevance of its commitments.

The directives actually suggest the table of contents. In its present form, the report contains nine chapters. It includes an overview of the science of climate change; factors determining greenhouse gas emissions in Canada; current greenhouse gas emissions in Canada and projections up to the year 2000; the situation and results of the inventories on climate change; the possible impact of climate change on Canada; research on climate change and new technologies; international financial assistance and technology transfer; and finally, education and public awareness of the problems related to climate change.

The report was produced jointly by Environment Canada and Natural Resources Canada. However, it would have been impossible to publish it without the assistance and contribution of other federal departments including Agriculture Canada, CIDA, Foreign Affairs and International Trade, and all provinces and territories and non-governmental players.

The report is a series of studies, analyses and already existing data prepared by various authors and organizations. It also includes excerpts from more lengthy, detailed studies.

[English]

The Chairman: Excuse me for interrupting, Mr. Audet. It would be very helpful to members of this committee if we could follow your text. We have the charts, which are indeed very helpful, but we would also be able to base our questions on your presentation. Could you make your text available, please?

Mr. Robert Audet: I have only the one copy. In about a minute I'll be talking about these charts.

The Chairman: I realize that. You're telling us very important and interesting things. We will find it extremely difficult to base our questions on your presentation unless we have the text before us.

Mr. Robert Audet: I know that. I only have a copy with some notes on it.

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The Chairman: Please proceed. Perhaps we can make a photocopy when you are finished with the text. Is that all right with you?

Mr. Robert Audet: It's possible. I have notes here I can beef up.

I will now talk about some of the highlights of the reports. We talk about greenhouse gas emission.

Following a small reduction in 1991, Canada's greenhouse gas emissions increased steadily from the 1990 level of 567 million tonnes of carbon dioxide equivalent to 589 million tonnes in 1994 and up to 619 million tonnes in 1995. This represents an increase of 9% over 1990 levels in 1995. The population grew by 5.6% over the same period, which means a per capita increase of almost 3%. The 619 million tonnes of greenhouse gases represent about 2% of the global emissions.

If we look at figure 1 and at the emission by sources, we will see that oil, natural gas, and coal accounted for approximately 89% of the total greenhouse gas emissions.

On a sectoral basis energy industries accounted for about 34%; industry, 20%; transportation, 27%; residential, 10%; and commercial and agriculture sources, 5% each of the total greenhouse gas emissions in 1995.

Of greenhouse gas, carbon dioxide contributed the largest share, about 81%. It was followed by methane at 12%, nitrous oxide at 5%, and perfluorocarbons at 1%.

If you look at the chart, you will see that because of the rounding-off method, some of these totals end up at 101%. This is not an error, it's just the rounding-off process.

The projection for trends provided in this report is not the only possible outcome. It is, however, a considered view based on a set of reasonable assumptions concerning factors that influence future emission trends. This said, the use of any alternative subset of assumptions concerning the future will yield a different result.

Also, the estimates are obviously more reliable in the shorter to mid term, given the difficulty of envisioning specific changes in technology over a long span of time. It should also be stressed that the emission prediction is not in the strict sense of the term a forecast.

If we look at figure 2, you'll note that according to our model the long-term trend in greenhouse gas emissions by type of emission will slightly decline in the year 2000, resulting from low coal use in Ontario and a change in the manufacturing process of adipic acid for nylon production.

By the year 2010 emissions will be 19% higher than in 1990. By the year 2020 they will be 36% higher. The primary sources of these increases are population and economic growth, coupled with low energy prices and a shift to fossil fuel, particularly natural gas, for electricity generation.

Please note the emission for the base of the 1990 projection, figure 2, totalled 564 million tonnes and not the 567 million tonnes stated earlier in the inventory. That's because this outlook was developed prior to confirmation of revision of the inventory data.

If you look at figure 3, if we examine the long-term growth in emission by sector, you will see that transportation is the largest contributor to emission in both absolute and growth terms. The increase in emissions from the industrial sector is also significant, but the pace is somewhat slower. The commercial sector generates a modest increase, while in the residential sector there's an absolute decrease in emissions. These latter results are closely linked to the impact of energy efficiency regulations on buildings' heating systems and other energy-using equipment.

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With respect to policies and measures, the national action program on climate change, NAPCC for short, is Canada's response to FCCC. This program, which was developed as a federal, provincial, and territorial government initiative, was approved by federal, provincial, and territorial ministers of energy and environment.

The NAPCC reflects Canada's intention to manage climate change within an overall context of sustainable development and is a guide for some of the mitigation actions such as the voluntary challenge and registry program, joint implementation, national communication program, and international co-operation.

The Chairman: Excuse me for interrupting you again. I'd like to draw to the attention of the members of the committee that Mr. Audet now is dealing with chapter four of this report, entitled “Policy and Measures”.

Thank you. Please proceed.

Mr. Robert Audet: The NAPCC is also applying the mitigation activities, planned or under way, in a number of different sectors including government, industry, residential, commercial, agriculture and forestry. The NAPCC also sets the strategic direction for action related to science and adaptation.

With respect to the possible impact of climate change on Canada, projections continue to suggest a greater warming in interior regions than offshore and greater winter warming in the Arctic than in the south.

The Chairman: Excuse me. I would like to alert the members of the committee that we have now jumped to chapter six. Is that correct?

Mr. Robert Audet: Yes.

The Chairman: Fine. It might be helpful if you were to indicate that to the members of the committee so they can follow you, Mr. Audet. Thank you.

Mr. Robert Audet: I'll just start over.

For Canada projections continue to suggest greater warming in interior regions than offshore and a greater winter warming in the Arctic than in the south.

Most, although not all, models continue to project increased average winter precipitation across Canada and decreased net soil moisture and water resources in interior Canada during summer months.

The projection further suggests that the frequency and intensity of both heat spells and convective storms in summer will increase, but the number of dry days, and hence the potential for drought periods, may also arise. In winter cold spells will be less intense, but the frequency of intense snowstorms may increase.

Such changes in extreme events are likely to be significantly more dangerous to ecosystems and Canadian society than the changes in mean climate conditions that caused them. According to projections the health of Canadians will be affected by more frequent heat waves, especially in cities. People with respiratory problems and older people who are less able to cope with heat are most susceptible. Cities that experience smog episodes along with the heat are likely to see a greater increase in hospital admissions and mortality.

Adaptation refers to chapter seven. Adaptation is not seen as an alternative to required mitigation. Adaptive measures will be required even if global mitigation is successful.

Within Canada the following areas have been identified for action, including research, to identify adaptation potential and implementation, strategies, and measures. These are agriculture, specifically including technology development, water resources, forestry and forest management, hazardous and coastal zones, urban infrastructure and construction industry, and finally, economics.

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The environmental adaptation research group within Environment Canada was established specifically to provide a federal focus for atmospheric change research related to generating knowledge that will help improve decision-making and facilitate the development of implementation and adaptive responses.

A focal point for much of this research is being provided through the Canada Country Study on Biodiversity. This study is a federal initiative led by Environment Canada's adaptation research group that engages a wide range of collaborators at the federal and provincial levels, university communities, non-government organizations and the private sector. The objective of these studies is to evaluate the impact of climate variability and climate change on Canada as a whole, and to identify and evaluate adaptive responses.

Finally, I have not really spoken about the initiatives and the impact of initiatives. My colleague from Natural Resources Canada will expand on these points.

[Translation]

Mr. Chairman, ladies and gentlemen, that was a very brief summary of my statement. We will be pleased to answer your questions. Thank you.

The Chairman: Thank you, Mr. Audet. We will try to get a copy of your text, which could be used as the basis for our report.

[English]

Are you ready to proceed, Mr. Marty?

Mr. Neil McIlveen (Director, Energy Forecasting Division, Natural Resources Canada): Yes, Mr. Chairman.

I'd like to follow up briefly on what Mr. Audet was saying about the forecast and perhaps try to help situate it for the committee members. It's important to recognize that the projections or outlook we have for missions is sometimes called a business-as-usual case. What that means in practical terms is that we hold current federal and provincial policy constant. We don't speculate on what that policy might be in the future. That's not to say that we believe policy will not change over 25 years, but the point of the exercise is to trace the implications of current policy so that policy-makers can determine whether changes are required.

We do, however, try to put into the forecast as much as we can in terms of current or really likely policy initiatives—those that have gone far enough that one can discern their impacts. I believe somebody has handed out a little chart, which is also in the national report. That gives you an idea of what we think the impact will be of the initiatives that are associated with the national action program on climate change. These are federal, provincial and municipal initiatives, and of course the voluntary challenge and registry.

That chart looks at the increase in emissions over the 1990 level. So 1990 starts off with zero and everything above that is what would be over and above that in 2010 or 2020, for example. Our judgment is that were it not for those initiatives, by the time you got to the year 2000 the emissions would be about 84 megatonnes higher than they were in 1990. By the time you get way out to 2020, they would be 311 megatonnes higher.

Because of our estimate of what those initiatives might do, the track is much lower. By the time you get to the year 2000 you're 46 megatonnes higher, and by 2020 you're a little over 200 megatonnes higher.

If you just use the 2020 numbers as an example, the impact is pretty significant. We're talking about reducing emissions by something in the order of 100 megatonnes. That's on a base of about 600 or 700 megatonnes.

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The other point you can draw from that chart by looking at all the white space that's down below is that the achievement of a long-term stabilization goal, for example, is a fairly considerable challenge. If you've taken care of about a third of the problem through the current initiatives, at a minimum there's another two-thirds to go. I suppose one could argue that in some senses the existing initiatives are addressing possibilities that are very cost-effective. Once you start to get further along you are dealing with possibilities that perhaps are less cost-effective.

Thank you.

The Acting Chairman (Mr. David Pratt): Mr. Marty, do you wish to give a statement?

Mr. Nick Marty (Director, Demand Policy and Analysis Division, Natural Resources Canada): I'll just state the contribution of my group to this report.

I'm director of policy development and analysis in the energy efficiency branch of Natural Resources Canada. My group was involved in compiling the list of the energy efficiency and alternative energy programs, which are described and listed in this publication. We also conducted the analysis of energy efficiency trends from 1990 to 1995. On page 13 of the report there's a table that summarizes the analysis. It shows that even though energy use did increase from 1990 to 1995, there was a significant improvement in energy intensity, and hence in energy efficiency.

My group was also involved in estimating the impact of the various programs, including the federal government's programs and those of the provinces and utilities, so I'm able to answer questions on any of those points.

The Acting Chairman (Mr. David Pratt): Thank you, Mr. Marty.

The first round of questions is to the opposition. Mr. Casson.

Mr. Rick Casson (Lethbridge, Ref.): Thank you, Mr. Chairman.

Mr. Audet, you made a statement that the prediction you have here is a prediction and not a forecast. What did you mean by that? Who made that...?

Mr. Neil McIlveen: I believe he did, but I think I could respond to that.

People in this business like to draw a distinction between a projection and a forecast. In a forecast you would allow everything to vary. So if one were doing a forecast of energy demand, for example, one would try to incorporate likely changes in government policy within that forecast. So you'd leave all variables open.

Our projection is a little narrower in the sense that we deliberately hold government policy constant and then trace out the implications of holding that policy constant over a long period of time. That's partly because one of the purposes of the outlook or projections we do is to provide a basis for policy analysis and policy decision. So you have to know where you're starting from, in effect.

Mr. Rick Casson: Another part of it was the adaptation aspect of it, that certain things will have to be done regardless of what happens from here on in. Is that how I read that? Is that what you're referring to when you say adapting to the situation?

Mr. Robert Audet: My responsibility for this report lies in picking bits and pieces of this report, putting it together and making sure it reads right. I was not involved in each of these independent studies. Adaptation was done mainly by our environmental atmospheric service. Roger Street and his group mainly did this section. I got involved in the research aspect of the report, particularly that section.

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Maybe that question could be addressed to some of my colleagues at Environment Canada at a later point.

Mr. Rick Casson: All right.

One other thing is the impact of initiatives on greenhouse gas emissions, 1990 to 2020—this chart here. What you told us is that your projected results here were based on findings from 1990 to 1995, the difference, and then projected out underneath the present-day scenario of reduction. I'm trying to understand this chart.

Mr. Neil McIlveen: No, it's probably not quite that straightforward. It's not simply taking what has occurred between 1990 and 1995, for example, and just pushing it on.

We started really with all the initiatives that had been announced by the federal, provincial and municipal governments and utilities, and kind of worked our way down to those that appeared to have a discernible effect, where there was some kind of quantitative underpinning to them. For those we tried to develop what would likely happen if those policies or programs or initiatives were continued.

Mr. Marty may be able to deal with this better than I can, but taking an example of something like a regulation concerning energy and housing or furnaces, not only would you look at what happens when the regulation is put in, but also at what happens as the furnace stock turns over during a 25-year period. You try to pick that up. So those numbers do incorporate an estimate, in that particular instance, of how many new furnaces are likely to be purchased in a given year and how many are likely to expire in a given year. It's complex in a way, but it is trying to look at each of the initiatives and to guess the likely impact of that initiative in the future.

Mr. Rick Casson: The one chart I'm referring to shows a decline in end use from 1995 to 2000. Is that right?

Mr. Neil McIlveen: I don't believe that actually shows a decline. If you look at the space between the top and bottom of it, it is actually an increase.

Mr. Rick Casson: Okay, that's what you're referring to.

Thank you, Mr. Chair.

The Acting Chairman (Mr. David Pratt): Thank you, Mr. Casson. Mr. Laliberte.

Mr. Rick Laliberte (Churchill River, NDP): I'm very interested in your report. The measurement of carbon dioxide emissions—how is that conducted? That's still a mystery to me. How is the calculation of carbon dioxide emissions done?

Mr. Robert Audet: To give you an exact answer I would have to consult with my colleagues. I was not involved in that side. I know they have very strict guidelines. Some of them come from the IPCC. They must obey some guidelines and rules to be able to calculate everything.

Mr. Neil McIlveen: I can elaborate a bit. I don't do this work, but I know the people who do.

As you know, greenhouse gas emissions primarily come from energy, particularly when you're referring to carbon dioxide. In a way, developing emissions estimates for a given year is essentially mathematics. As long as you know the energy use—how much oil, natural gas or coal has been used or combusted—essentially what you do to get the emissions is to multiply that by a factor that is the emissions associated with a unit of that energy.

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The latter are developed scientifically. Once you have those, it is a relatively straightforward matter then to multiply it by the amount of energy that this used. As an example, Statistics Canada does collect that information, quarterly as a matter of fact.

I believe it gets a little more complex when you start to get into some of the other gases, and when you get beyond energy, for example, trying to figure out methane from landfills. Nobody goes around and surveys every landfill in Canada. Essentially there is testing of particular landfills, and some judgment as to just how much fill is put into those landfills in order to derive that.

You might want to get more scientific advice on this, but I think the confidence level gets a little wider the farther you get away from energy.

Mr. Rick Laliberte: Okay, I just needed to understand that.

The other aspect is the effects of the emissions, the warming aspect of certain areas of continents. We stumbled on a little document yesterday that was released to us by the Chinese delegates. Their increasing temperature was 0.25 degrees in recent years, and the impact it has on the northern region.... I think Madam Kraft Sloan created an awareness for us when she brought the Mackenzie Delta study. That alludes to northern impacts on this climate change.

I wanted to point out that your initiatives you're stating here are from 1995. We did come up with an increase, and we're saying it's about a 13% increase now since 1990. But regardless of the initiatives, we're still going up in emissions; the emissions aren't bringing us down. So is there a call or a recommendation in this report to bring the emissions trend downward, or is this just a report card?

Mr. Robert Audet: Exactly. This report just states the fact to the secretariat and the conference supporters only. It's done according to some guidelines that enable the secretariat and the conference parties to compare one country with the other.

Mr. Rick Laliberte: So this is like the terminology of projections?

Mr. Robert Audet: Yes.

Mr. Rick Laliberte: Projection as opposed to forecast?

Mr. Robert Audet: Yes.

Mr. Neil McIlveen: Yes, that's correct. I mean, one should think of this as a projection perhaps, rather than as a forecast.

I don't know whether there's a recommendation in there. I think there's an obvious point, which is that, in our judgment anyway, you would not be able to achieve an objective such as long-term stabilization with the current mix and volume of measures that are in place.

Mr. Rick Laliberte: Thank you.

The Acting Chairman (Mr. David Pratt): I have Mrs. Kraft Sloan, Mr. Jordan, and then Mr. de Savoye on my list.

Mrs. Karen Kraft Sloan (York North, Lib.): First of all, Mr. Knowles, if the committee doesn't already have them, I would recommend that we get copies of all the regional studies that have been released to date. I believe there's the Mackenzie Basin impact study, the Quebec study, and I think the Atlantic study is coming out or it has come out this week. Work has been done on the Great Lakes study, and the Canada country study will be available November 26 or 28.

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I'm just going to do my advertisement as parliamentary secretary. I'm also getting information for the committee on the Canada country study symposium that will be held in Toronto between November 24 and 26, so the committee members can have this information.

Could you tell me what the greenhouse gas.... This chart stops at 1990, and I'm wondering if greenhouse gas emissions were higher or lower in 1988 and 1989.

Mr. Neil McIlveen: It may take a minute.

Mr. Robert Audet: Well, the baseline was 1990.

Mrs. Karen Kraft Sloan: Yes, but I'd like to know the pre-baseline.

Mr. Robert Audet: Oh. I'm not sure.

Mr. Neil McIlveen: Here we are, if I can read it. I'm sorry, I thought this had a more historical....

Mrs. Karen Kraft Sloan: Is it possible to get that?

Mr. Neil McIlveen: It is possible to get them. If I keep flipping through this, I may find it, but yes, it is certainly possible to get them.

Mrs. Karen Kraft Sloan: All right.

I'm wondering if you could tell me if the impact done.... In figure 3 you have fossil fuel production for 1990, 2000, 2010, and 2020. Do you have the tar sands factored into this?

Mr. Neil McIlveen: The short answer is yes. The emissions associated with tar sands production are put in that second-to-last set of bars.

Mrs. Karen Kraft Sloan: Okay, so you would have information in regard to the level of production of tar sands projected for 2020?

Mr. Neil McIlveen: Yes, we would. In fact, it is in the underlying forecast.

Mrs. Karen Kraft Sloan: I'm curious as to what percentage the tar sands will be.

Mr. Neil McIlveen: I have a chart here. I may have a little trouble reading it off the chart. If I could provide it to you.... It is chart 4.9.

Mrs. Karen Kraft Sloan: I need it read into the record, but if you want to take a few minutes and find this information, that's fine.

So you have said that the tar sands is factored in.

Mr. Neil McIlveen: Yes.

Mrs. Karen Kraft Sloan: You have information as to the level of tar sands production in the year 2020. This would assume that we would have some idea of the cost involved in extracting oil from the tar sands, petroleum products from the tar sands, as well as the revenue generated for this.

We've had some difficulty getting information from the Department of Finance as to the level of subsidy projected out to the year 2020, or beyond the next couple of years. Given the information you have on fossil fuel production, it should suggest that Finance would have certain kinds of financial information related to this.

Mr. Neil McIlveen: You would probably want to speak to them. The fact that we have a production estimate does not necessarily imply that they might have an investment estimate. In this study itself, however, there is an investment estimate associated with the tar sands.

Mrs. Karen Kraft Sloan: Okay.

Mr. Neil McIlveen: So one can use those numbers, I suppose, to draw the conclusions you're—

Mrs. Karen Kraft Sloan: Some conclusions. I realize you're going to have inflationary prices, and things like that.

The Acting Chairman (Mr. David Pratt): Mrs. Kraft Sloan, could you wind it up? We have to get on to Mr. Jordan.

Mrs. Karen Kraft Sloan: Sure.

The Acting Chairman (Mr. David Pratt): Do you want to go down to the second round as well?

Mrs. Karen Kraft Sloan: Yes.

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According to your graph, if we go from the year 1990 to the year 2000, is this approximately one-third increase in greenhouse gas emissions because of the fossil fuel production? You can help me with my grade nine math.

Mr. Neil McIlveen: Yes, I think it is about that. Yes, between 1990 and 2000, that's right; it looks like it is about an increase by a third.

The other point to keep in mind, though, is that once you get beyond 2000, you'll also note that this graph flattens out. Again, given that this is a projection, that is largely the result of initiatives we believe the oil and gas industry will undertake to improve production efficiency and reduce emissions, both of carbon dioxide, which is largely a function of their own energy use, and also in terms of reducing what are called fugitive methane emissions.

Mrs. Karen Kraft Sloan: Yes, and this is what I wanted to ask you about, because—

The Acting Chairman (Mr. David Pratt): I have to go to Mr. Jordan. You're already over your time at this point.

Mrs. Karen Kraft Sloan: Thank you.

Mr. Joe Jordan (Leeds—Grenville, Lib.): I just want to take you back to this chart here. If I'm reading it right, really you're representing three things here. You're showing us a projection of emissions, given the initiatives, and you're showing us what we'd be at if we hadn't undertaken those emissions. Is that correct?

Mr. Neil McIlveen: Yes, sir.

Mr. Joe Jordan: Okay. Now, is the width of the shaded areas showing us within the projected results of emissions what areas are contributing at what levels more or less graphically there?

Mr. Neil McIlveen: Yes.

Mr. Joe Jordan: So if I look at the numbers then, if I look at where we are because of the initiative.... When did the initiative start? Was it about 1992?

Mr. Neil McIlveen: It varies quite a bit. We tried to capture the impact from 1995 on essentially. That's why you don't see anything before 1995.

Mr. Joe Jordan: So without the initiatives then, the slope of that curve would have been much steeper, going up to about 130 megatonnes in 1995? Is that right?

Mr. Neil McIlveen: I'm not sure you're reading it right. It's saying that in 1995 emissions actually were 54 megatonnes higher than they were in 1990.

If you get beyond that, if you'd go to 2000, for example, in the absence of the initiatives associated essentially with NAPCC, according to our projections emissions would be 84 megatonnes higher. However, because of the initiatives they'll only be 46 megatonnes.

Mr. Joe Jordan: And the increase in those emissions are just a result of population growth? You're just extrapolating existing uses and needs? I'm just wondering why they aren't more stable.

Mr. Neil McIlveen: It's not quite an extrapolation. Essentially we have made assumptions—and these are fairly mainstream assumptions—concerning population growth, economic growth, and energy prices, for example.

Mr. Joe Jordan: So is it fair to say then that our emissions are increasing at a decreasing rate because of these initiatives?

Mr. Neil McIlveen: Yes.

Mr. Joe Jordan: I just want to build on Mr. Laliberte's analogy then.

So the report card is that we're getting good grades, but we're getting good grades at summer school. We're not really going to have an impact. We're not going to be able to stabilize or, dare I say, reduce without adjusting some of the factors you've held constant, one of them being government policy. Is that a fair assumption?

Mr. Neil McIlveen: Yes, I think—

Mr. Joe Jordan: We're talking about the extent of benefit. As one of the witnesses said the other day, we're talking about picking the fruit that's low to the ground.

Mr. Neil McIlveen: Yes.

Mr. Joe Jordan: Thanks.

The Acting Chairman (Mr. David Pratt): Mr. de Savoye.

[Translation]

Mr. Pierre de Savoye (Portneuf, BQ): Thank you, Mr. Chairman.

[English]

If I read you well, your projection is I won't have to go to the south by the year 2020; the south will come to me. But if I still read you well, the forecast is I won't like it.

Well, the chart we have in front of us—and you'll tell me if I'm right or wrong—is carbon dioxide emissions from Canadian sources. This is only 2% of the world emissions. That doesn't give us a fair idea of what will be airborne in those years to come, only what we will contribute to them with those initiatives. Am I an alarmist or a realist when I say that for about a century it will get a lot worse before it even stabilizes? You're experts. What's your reading?

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Mr. Robert Audet: I'm not in a position to comment on that. That would have to be addressed at the ADM level or to someone who is much more senior than I am.

Mr. Pierre de Savoye: Can you tell me if I'm an alarmist or a realist?

Mr. Robert Audet: You've made a realistic statement, yes.

[Translation]

Mr. Pierre de Savoye: Although we are interested almost exclusively in reducing emissions, which is important, we must also help other countries reduce their emissions as well. However, probably we should be particularly making substantial investments in order to survive until the next century, in which we could see some devastating impacts on the way of life of our civilization. Would one of you shed some light on this matter?

[English]

Mr. Neil McIlveen: I think you're right, in that this is a global issue. As well, most forecasts that I've seen suggest that the rate of emissions growth in developing countries is much faster than it is in developed countries, and that at some point in the next century the developing countries will probably contribute more to overall emissions than do the industrialized countries of today.

I think it follows from what you're saying that one should look fairly carefully at investment options and technology transfer of various kinds to these developing countries that would allow them to continue to grow—that is what they want to do, and I don't think anybody wants to stop that—but at the same time to do it in a manner or using technologies that are a lot less carbon-intensive than what they're currently using or likely to use. So I think you're right. Considerable attention should be directed toward the possibility of investment or technology transfer to countries of that nature.

[Translation]

Mr. Pierre de Savoye: Do any of you know whether any study has been done here in Canada or elsewhere that quantifies how much we will have to invest to maintain our civilization until the 22nd century? That is the issue at the moment.

Mr. Robert Audet: Chapter 8 discusses the financial assistance given to other countries, and we have the figures for Canada as well. I am about to update chapter 8 with the new data we just received from CIDA. In the very near future, I will be able to update chapter 8 and send you a copy of that.

There are a number of national and international assistance programs. Canada is actively involved in helping developing countries. I could not give you a figure for the whole world.

Mr. Pierre de Savoye: Thank you.

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[English]

The Acting Chairman (Mr. David Pratt): Thank you, Mr. de Savoye. Mr. Charbonneau.

[Translation]

Mr. Yvon Charbonneau (Anjou—Rivière-des-Prairies, Lib): I would like to give you an opportunity to explain more about some passages in the document that was distributed just as you began your remarks. I imagine that this second report on climate change was prepared by an intergovernmental panel on climate change. Is that the document in question?

Mr. Robert Audet: That is something completely different.

Mr. Yvon Charbonneau: It was distributed to us while you were speaking. Since you did not submit a brief, I thought it was important that I read it.

[English]

The Acting Chairman (Mr. David Pratt): There were some documents being distributed that were for this evening's meeting.

[Translation]

Mr. Yvon Charbonneau: On pages 50, 51 and 52 of the second report of the Intergovernmental Panel on Climate Change there are some passages that discredit the tendency to make projections based on mathematical models that are piling up on top of the other. For example, when there is an increase of half a degree, the model's margin of error is sometimes greater than the variation found.

I would like to make another comment. Since you are experts on atmospheric matters, can you tell us whether it is true that your figures come mainly from temperatures taken on the surface, and that you take very few or no temperature measurements of the lower atmosphere, using a microwave probe from a satellite, for example? Do you use a combination of all these methods?

Mr. Robert Audet: Frankly, I have no idea. You should perhaps ask this question of someone from the Atmospheric Environment Service, which is made up of specialists in this field.

Mr. Yvon Charbonneau: I read on our agenda that you work at the Global Air Issues Branch. So I thought I was asking the question of the right person.

Mr. Robert Audet: Not really. We are mainly involved in policy development and steps that should be taken to try to stop...

Mr. Yvon Charbonneau: How can we establish policy on these issues if we don't even know where the temperature measurements are taken? What is the basis of these policies? Are you measuring just surface temperatures or do you measure lower atmosphere temperatures? My sources tell me that while it is true that there has been a slight increase in the surface temperature in the last few years, the temperature of the lower atmosphere when measured by a microwave probe from a satellite shows that not only has there not been any increase in warming in the last 25 years, there has actually been a slight cooling of this level of the atmosphere. Can you comment on that?

Mr. Robert Audet: I'm not in a position to defend the quality and accuracy of the models, nor the way in which the information is collected. All we do is interpret the results.

Mr. Yvon Charbonneau: It must be confusing to make policy if the basis is so...

Mr. Robert Audet: The fact is that the models are as good as the science, which, we should remember, is evolving from day to day. The models are improved and revised constantly. In the case of the inventory, the models are revised regularly. A little earlier, Ms. Kraft-Sloan said that she would like to get data dating back to 1985 or 1988. I wonder whether she would be able to make any comparisons, because at that time, the gases included in the inventory were not necessarily all the same as those included in 1990 or 1995. That means we could be comparing apples and oranges. Comparisons might be difficult. As far as the models go, they are updated constantly.

• 1650

[English]

The Acting Chairman (Mr. David Pratt): Mr. Charbonneau, I'm going to move on to Mr. Herron at this point. We're over your time. Mr. Herron.

Mr. John Herron (Fundy—Royal, PC): I have a quick comment to follow up on the comments from my colleague to my right.

With respect to the projections—especially from this graph—whether we can project by the year 2000 or 2010, whether even stabilization is possible, the comment was made that this sort of response would have to come from the ADM level or something like that. I don't understand why it would have to come from that level.

Second, one of the things we're looking at is the Energy Forecasting Division and the Demand Policy Analysis Division. I think that would be the level on which we would receive that kind of information. In trying to determine what should be Canada's position in terms of whether we can stabilize that by a certain year, and whether reductions are possible, we need that sort of information and input from people who have studied it on a more proactive basis than we have, such as yourselves. So I would ask the same question: do you think that by the year 2010, with our current emissions, it will be possible to stabilize?

Mr. Nick Marty: The current initiatives that we have in place would not lead to stabilization by the year 2010. Additional initiatives would be required in order to achieve that. That's essentially what the projection says.

Mr. John Herron: With the best intentions of all governments and all parties and everybody getting behind this, is it your opinion that there are initiatives or technologies that can be developed, given the magnitude of growth in this graph, to actually reach any kind of stabilization?

Mr. Nick Marty: There are already technologies in a number of areas that will result in major improvements in energy efficiency. The question to a large extent is the economics of adopting those technologies.

For example, if you look at housing through our advanced houses measure, which is being done by our technology group, they've demonstrated that it is possible to have a new house that uses half the energy of current houses. But those technologies will have paybacks that will be more than ten years—sometimes 15-year or 20-year paybacks. They're not going to result from the marketplace. So you have to either bring down the cost of those technologies or you have to provide some sort of incentive to get those technologies adopted. In many cases there are technologies out there, and in some areas, such as vehicles, I'd say there is a need to bring more advanced technologies into the marketplace.

Mr. John Herron: So we need drastic initiatives or policy changes in culture in order for us to get to any hope for civilization by the year 2010.

Mr. Nick Marty: It varies. There are certain things you can do where there's a payback of one to two years. Improving lighting in commercial buildings, for example, has proven to have a very low payback. A number of our measures are trying to get commercial builders and owners of commercial buildings to retrofit their buildings and make them more efficient. But as you try to get more and more savings, you start moving up the cost chart. You start moving into measures where the paybacks are significantly longer than that.

• 1655

The Acting Chairman (Mr. David Pratt): Thank you, Mr. Herron. Mrs. Kraft Sloan.

Mrs. Karen Kraft Sloan: I just wanted to ask you about this graph again, the impact on initiatives. Do you have the VCR factored into this graph?

Mr. Neil McIlveen: Yes, it is. The VCR is, as you know, many things. There are 600 or so plans currently enrolled in the VCR.

In some cases we have taken and tried to incorporate the VCR quite directly, and that is particularly the case for what is referred to as fossil fuel production, which is essentially the oil and gas industry, and also non-energy and electricity. It is partly because in those areas the VCR is in fact the major initiative in those sectors.

When it comes to the end use, which is basically the commercial, residential, industrial, and transportation sectors, it has been somewhat difficult to incorporate the VCR. We have, for example, taken on board the commitment that was made by CIPEC for a 1% improvement in energy intensity in the industrial sectors.

The difficulty I guess is that the VCR mixes with a lot of the existing programs. The position we have taken, and both Mr. Marty and I have tried to develop this, is that in some senses it is a kind of heightening awareness that the VCR brings to the whole issue of energy efficiency programs.

In brief, for some of the sectors it is in there quite specifically and directly. For others, it is a little more nuanced.

Mrs. Karen Kraft Sloan: If it is very important to the fossil fuel production sector, for example, the area in the graph that shows how it has reduced greenhouse gas emissions by the year 2020 is very significant in terms of the VCR. Is that correct? Would a fairly significant portion of the area in the graph for fossil fuel production be a result of the VCR?

Mr. Neil McIlveen: In fact, virtually all of it would be.

Mrs. Karen Kraft Sloan: Are you aware of the great controversy of the VCR program and whether it is effective in actually reducing greenhouse gas emissions?

Mr. Neil McIlveen: Yes, I am aware that there are differing views about the effectiveness of the VCR program.

Mrs. Karen Kraft Sloan: So there could be a difference of view if someone were to take a look at this graph to say that the national policies—and I am talking all levels of government—actually will have a real impact as indicated by the 100 megatonnes of reduction you have indicated on this graph. We are not dealing with things that have already happened.

Mr. Neil McIlveen: No, we are dealing with the future.

Mrs. Karen Kraft Sloan: We are dealing with things that are going to happen.

Mr. Neil McIlveen: Certainly, yes. One could have a different view of this. I would point out that I think it is a fairly considered view. We did not do this in isolation. We did talk to a lot of the organizations, be they energy users or energy producers, about what was possible or reasonable to put in. In the case of the emissions reduction associated with the fossil fuel industry, we had many discussions with the Canadian Association of Petroleum Producers. We basically said to them that we were going to put something in there that would draw attention to their industry. We asked whether they were comfortable with what we were putting in there. They did agree that they were comfortable with it. They think more or less those kinds of improvements can be made as a result of their VCR initiatives and perhaps an extension of those VCR initiatives over time.

• 1700

Mrs. Karen Kraft Sloan: You'll have to forgive me if I sound overly critical, but to me this talks to potential. It doesn't necessarily talk to the ability of these policies and programs and all of the partners, be it government or private sector, to actually do what they say they would like to do. The possibility is there, but the possibility was there after Rio in 1992 to reduce greenhouse gas emissions. We haven't done such a great job, have we?

Mr. Neil McIlveen: No.

Mrs. Karen Kraft Sloan: If you have a program such as the VCR, which is contributing a fairly large chunk to the reduction, and there is a lot of controversy out there around the VCR, it doesn't give me a lot of confidence that we will be actually able to reduce things to 203 instead of 311 in the year 2020. Maybe we need other kinds of government policies.

Mr. Nick Marty: When you're making estimates of impacts of a regulatory initiative, you can have a much higher level of certainty in terms of what the impact is going to be. So when we estimate the impact of our minimum regulations on energy-using equipment, we have a higher level of certainty than when we're looking at whether they're voluntary measures or even financial incentives. There's some uncertainty as to what the response will be and whether or not those who are making commitments will live up to their commitments. What we'll see as we move along is whether they are realizing their commitments.

On the end-use side the energy-using industries such as pulp and paper and the chemical, up through the CIPEC program...they prepare an annual report for 13 different groupings of industry, under which they continually monitor their improvements and whether they are realizing the sorts of targets they set. They are monitoring it on a year-by-year basis, and that will give us an idea as to whether we're making gains at our end as forecasted.

Mrs. Karen Kraft Sloan: I think this sort of thing is very useful in setting out the possibility.... If we do what we say we want to do, and given the fact that you have had buy-in from industry and other partners on this, I think this is something you can use to keep the feet to the fire so to speak, or maybe reduce the fire. Thank you.

The Acting Chairman (Mr. David Pratt): Mr. Casson.

Mr. Rick Casson: Will this report be used by the government when formulating its position for Kyoto?

Mr. Robert Audet: It was presented to the secretariat in early summer. It's going to be given to all parties at the next Kyoto, and it will serve possibly as a base for the new negotiations.

Mr. Rick Casson: Okay. Is there a value in accumulating data over a longer period of time to have a more accurate projection? It seems to me, and I think this was just what you were saying, that if as we go along collect accurate data for another five years and add it to the data we've already accurately collected, we will be able to better project what's going to happen in the year 2020.

• 1705

Mr. Nick Marty: Yes, we believe collecting good data is very important. It also means in order to monitor developments in this area, that means data at a fairly disaggregated level. We have to know what's going on in terms of the energy efficiency of buildings, equipment, and things out there. One of the measures our department has put in place is a major initiative to improve the data collection with regard to energy efficiency. We undertake major surveys in all the energy areas, and we're going to be undertaking new surveys to get better information. That will help us both assess what we can do and the impacts of what we are doing. It will also help us monitor the progress of the measures we already have in place.

Mr. Rick Casson: The measures that were used in 1990 to get a baseline to start from and what you're using today in 1997—has there been a considerable improvement in the processes, in the equipment, in all of the aspects that are put together to make these projections?

Mr. Nick Marty: Are you asking whether there has been improvement in the data on—

Mr. Rick Casson: In the processes to collect the data.

Mr. Nick Marty: Yes, we have put in place a survey of home energy use, for example. The first survey was in 1993 and we'll be undertaking one again in 1998. We survey households across Canada and collect information on the energy efficiency of various products in the home. These surveys are not cheap. One of these surveys will cost about $1 million, so we can't do them every year. We have to do them basically every three or four years.

On the industry side we have a data survey that we've expanded, so it now includes much more detailed data on various segments of the industrial sector. We've been working with industry on that. We've also been working with Environment Canada to ensure that the data they have on emissions indeed is consistent with the data we have on energy use, just so we're all looking at the same information and so that when we're assessing progress we're all looking at the same facts.

Mr. Rick Casson: I would think given the magnitude of the potential problems that exist in having accurate information, which is going to affect us all for years to come, $1 million a year is not out of line. This is so critical and so important. We're talking huge, huge effect. To have that accurate data is absolutely essential.

Is there anything in your process whereby you project—I guess it's hard to do—what technology is going to be like in homes, in industry, in cars, and can you factor that into this? Can you factor in that as everybody gets more conscious of energy, everybody's going to try to preserve it?

Mr. Nick Marty: In terms of the projections in here, as Neil was saying, this projects what we expect to see as a result of the current market forces and as a result of the initiatives. We do have a major set of R and D programs, which, through a number of demonstrations, are demonstrating the technologies that are out there, their efficiency, what they are capable of doing. So we have information on the technologies out there and those being developed. A major question is how to get them into the marketplace and what it would take.

Mr. Neil McIlveen: To supplement what Mr. Marty was saying, in the projections we do try to incorporate technological developments. As he just said, certainly for the technologies that are out there and are reasonably close to being commercial, we'll put them in.

• 1710

It obviously gets more difficult the farther out you get, because you're almost having to speculate on some technology that you don't really know very much about yet. If you're out 20 or 25 years, you have to try to capture that possibility by making judgments in terms of the energy intensity of the economy. By the time you get out that far, though, it's a bit of a guess.

The department, NRCan, is trying to develop—and hopefully we will have this fairly soon—a much more technology-focused sort of modelling. There is some of this available internationally, and we're looking into it. It looks like it has some promise to be able to focus these projections a little more and to try to capture some of those technological potentials.

Mr. Rick Casson: Thank you.

The Acting Chairman (Mr. David Pratt): Mr. de Savoye.

Mr. Pierre de Savoye: Thank you, Mr. Chair.

A few moments ago Mr. Charbonneau questioned the usefulness of modelling. Are those models accurate, and can we rely upon them? I would like at this point to remind you of what Blaise Pascal said about heaven and hell: “I don't know if they exist, but if I live my life as if they don't exist and they do exist, I will have a problem for the rest of eternity.” So I won't take any chances; I will live as if they were accurate.

More to the point, no model exactly predicts the same thing, but they all predict the same tendency. Furthermore, if Mr. Charbonneau were here, I think the the news he was thinking of as good, because of upper atmosphere colder temperatures, is indeed bad news. They've made satellite observances about the heat capacity of the cloud cover, about how much heat it does retain. To their astonishment, it retains a lot more than was previously thought. So the colder it is up there, the warmer it will be down here. That's bad news for Mr. Charbonneau, and it's bad news for all of us.

I'm making comments here, and you probably will want to react to them, but I will go on for a few more seconds and will ask a precise question.

Every time we spend a dollar in Canada to lower our gas emissions, we will work only on 2% of the worldwide reduction. Obviously, we need for other countries to do their share. We need that very badly, because even if we had twice the results that we anticipate, we would be in trouble if the rest of the world has the results they are anticipating. We must do a lot better.

Should we invest a dollar of effort in this country, or somewhere else in the world where it will be more productive? It's not their fate I'm concerned with, it's my fate. What do you think about that?

Mr. Neil McIlveen: That's a policy-loaded question, and it probably really isn't for us to decide the policy aspects of this.

As was discussed earlier, it certainly makes sense to think about investment in areas where what economists call the marginal cost of abatement of carbon is lower. I'm sure there are opportunities for doing that in other countries, and perhaps in developing countries that are not present here.

I don't know whether one could have a policy that said that's all we do. I think there are many reasons why that couldn't be. But I certainly think a useful element of a policy might be to focus on what is possible overseas. In fact, through our department—and other departments have been involved in it through what's referred to as joint implementation, and I can never remember the other acronym—we do have joint implementation, which is precisely that idea: that Canadian companies could invest in emissions reduction activities in other countries and get credit for it.

• 1715

This is an idea that is very current in the international community. There hasn't been a great deal of progress on it, to my understanding, and I think that's partly because of a concern on the part of developing countries as to what it really means to them or for them. But certainly what underlines the notion of JI—joint implementation—is that possibility that there are more cost-effective investments in emissions reductions, perhaps in developing countries or elsewhere anyway.

Mr. Nick Marty: If I could add to that, we can benefit economically from investing in energy efficiency in Canada, at least to a point. An example of that certainly has been our experience in commercial buildings. We see that it is possible to retrofit commercial buildings to make them 20% more energy efficient. The savings from doing so offsets the cost to the point where energy service companies in the private sector are able to undertake these retrofits and can be paid out of the energy savings, and nobody else has to put in any investment money. Indeed, we're doing that in the federal government through the federal buildings initiative, as you know.

So we can certainly benefit to a point. However, in certain areas Canada is more energy efficient than other countries. The fact that we're energy intensive often makes it look the other way around, but we are energy efficient in a number of areas. Certainly when you look at some of the other countries—eastern Europe and some of the developing nations, for example—you could probably get more savings for your dollar there than you could in Canada. So there certainly are opportunities to respond to the world problem by taking action in that area as well.

Mr. Robert Audet: Perhaps just finally, the meeting in Kyoto will address all of these points. This is the reason for the agreement.

Mr. Pierre de Savoye: Will you allow one last statement?

Is there a chart somewhere in the world that compares the cost of what will happen to the cost of preventing it? For instance, if we can retard at a certain cost for one year, it is worth while to invest that money to retard it. I'm not talking about the human side, just the economic side. If we don't invest that money, we will have to spend it anyway, because we will lose crops in Alberta, we will lose forests in Quebec, we will have health problems, and so forth. Is there a chart somewhere that could somehow help us to decide how much money we have to invest worldwide in order to lower our risk, or to retard the risk that is there?

Mr. Neil McIlveen: I don't believe so. I've seen some theoretical studies that try to come to grips with the point you are making as to whether or not there's some kind of benefit-cost calculus here that you can work with. I don't recall seeing anything that would be definitive in any way, shape or form at the moment.

Part of the problem—and in some sense, this is what the Canada Country Study is trying to address—is to in fact get some notion of the benefits of taking action or the costs of inaction, and to at least to express in physical terms what you were talking about: what it does to crop yields, what it does to timber growth, those sorts of things. If there can be some consensus on what those physical impacts are, it may not be that difficult to then try to apply monetary values to at least some of those, and to therefore try to do a benefit-cost calculation, as you were suggesting. I'm not an expert on all of the literature, but I don't believe we're anywhere near that with this one.

It's much different with acid rain or something like that. You do know fish die as a result of this, or that trees don't grow as big. You can therefore put some monetary value to that and talk about the costs and benefits of sulphur dioxide abatement. It's much more difficult to do it with carbon dioxide or with greenhouse gases.

• 1720

Mr. Pierre de Savoye: Thank you.

The Acting Chairman (Mr. David Pratt): Mr. Jordan.

Mr. Joe Jordan: I'd like to thank my colleague, because the discussion has taken a very interesting turn away from regression analysis into some other issues. I realize we're getting out of your bailiwick.

When I look at the issue...and I think I share the honourable member's passion a bit. An analogy to the tobacco industry has been used, on whether cigarette smoking causes cancer; one group says it does, another doesn't. I think the issue is that it's never a good idea to be pumping this stuff into the environment. If we're going to wait around for definitive proof, we may cross some line that is going to be devastating.

I think it's on the larger issue, the whole issue of sustainable development, that we need to focus our attention. Global warming is a symptom of a problem—that is, we are not engaging in practices that are ecologically neutral. We are going to run out of things if we don't change. I don't think that point, really...I think you're on much more solid footing in that arena.

Having said that, I don't think we're going to solve the problem unless we can find short-term economically viable sustainable practices, and build on those. So the fact that Canada is only 2% of emissions, with a half a percent of the population.... Structurally, I think our economy reflects the problem, which is that developed countries are disproportionately contributing. We have to change that trend.

Getting the whole world to agree to take a financial hit isn't going to happen. In Canada we can't even do that in terms of some provinces and standards and things like that. I think it's Canada's role to commit to focusing on the short-term economically viable sustainable practices that I know are there, and prove that companies can become more competitive because they do this, and lead by example. That's where we have to step up to the plate here.

Global consensus would be lovely, but it's not going to happen. We need to direct what resources we have. Certainly one of the presentations told us that energy efficiency actions in Canada have resulted in savings of somewhere around $4 billion.

If you put $4 billion in the hands of alternative energy experts I think we can make some inroads. I don't see it happening any other way. The future is very bleak if we don't do something. To get from A to B, the practical steps necessary have to have short-term economic paybacks. I don't see them taking place. I don't see the motivation for them to take place.

The effects of inaction are on the next generation. We're not used to thinking in those terms. Even if we do think in those terms, we're not used to acting on those terms.

I guess this is just to add to the debate. I don't know if I've added or taken away from it, but I think Canada does have a role. We can show the economic viability of sustainable practices that will then pull through the channels other countries to do it too. Otherwise, they'll be at economic disadvantages. We'll gain market share because of this. In the language that they understand, the language of money and economics, we'll show them that this is the course of action.

I don't see it happening in any other way.

Mr. Robert Audet: I'd like to comment on the first part of your exposé. It's true, Canada emits 2% of global emission and we have about 5% of the global population. That makes us the third-worst emitter per capita, after the U.S. and Japan. But it is important to consider some of the circumstances that underlie that. Canada is a northern latitude country. It's very cold. Distances are huge.

That's the framework within which we have to operate. I'm not saying we should use it as an excuse not to perform, but....

Mr. Joe Jordan: But if we can do it here, they can do it anywhere.

• 1725

Mr. Robert Audet: Yes, probably. We shouldn't use that as an excuse, but it will probably never be the same as a southern country or a very small country where it's very easy to control.

The Acting Chairman (Mr. David Pratt): Mr. Audet, if I could just interject here—which is a prerogative of the chair—did I hear you correctly when you said that Canada has 2% of the emissions with 5% of the population?

Mr. Robert Audet: Point five percent.

The Acting Chairman (Mr. David Pratt): Oh, point five, I'm sorry. That makes more sense.

Are you finished, Mr. Jordan?

Mr. Joe Jordan: Yes.

The Acting Chairman (Mr. David Pratt): Mrs. Kraft Sloan.

Mrs. Karen Kraft Sloan: I just wanted to follow up on what Mr. Jordan was talking about. A few years ago the world market for environmental industry was projected at about $600 billion. Now it's projected at in excess of $900 billion, which is an amazing increase. It shows that Canada has some real opportunities in a win-win situation: clean up the environment and create economic development, trade and jobs, because these industries are generally more labour-intensive as well.

Referring to your chart on the impact of initiatives on greenhouse gas emissions, I'm wondering if you could provide for the committee some policy suggestions that would increase the downward slope or slow the upward slope of the greenhouse gas emissions.

Mr. Joe Jordan: It's a free-for-all—

Some hon. members: Oh, oh.

Mrs. Karen Kraft Sloan: Do you have suggestions you'd like to put on the table?

Mr. Joe Jordan: —except that someone's writing it down.

Mr. Nick Marty: I could suggest some of the areas where we're going to have to make gains in energy efficiency, certainly in the end use. There are still significant opportunities in the residential and commercial areas, although they don't look as significant in terms of emissions on the charts as some of the other sectors. That's partly because often the electricity emissions are allocated to the electricity sector, so saving electricity in those areas can be important.

Improving the energy efficiency of existing houses is certainly a key area. We believe the opportunities are there to make some significant improvements; the difficulty is figuring out exactly how to make that happen. The same applies for existing commercial buildings. Again, we think there are opportunities for making gains of 20% or more in energy efficiency in commercial buildings.

Industry is tougher. Certainly there are opportunities in the auxiliary systems, in the motors, the motor drives, fans, pumps and the motor drive systems, for example, which account for a large part of electricity use in the industrial sector. There is a lot that can be done to optimize the use of motors, not just the motors themselves, but the motor systems, to make the motor systems more energy efficient. That certainly is a significant area.

There are opportunities in co-generation, using waste heat and either putting it back into the buildings or the industrial process or using it for electricity generation.

There are opportunities in terms of the industrial processes themselves, but that really happens when the industry undertakes new investment when they're upgrading the efficiency of their plants. That's the time when there is a need for them to take on more energy efficient investments.

Transportation remains a major challenge. It's obviously an area where a lot of fossil fuels are being used, so it's a big part of emissions. Essentially you have to either make the vehicle more energy efficient or get people to leave their cars at home and take some other form of transportation or car pool or whatever. There are certainly opportunities down the road in terms of using alternative transportation fuels, but I think that's economically a bit further down the road.

• 1730

Those key areas to address are really in the end use area, but it's a real challenge in terms of coming up with the mechanisms or the policy tools to make something happen in those areas.

Neil, you may have some comment on the production side.

Mr. Neil McIlveen: Yes. I guess one of the areas one could focus on is in terms of emissions from electricity generation. Those emissions are something in the order of 15% to 20% of the total. Most of them come from coal, and to a lesser extent oil and natural gas.

There have been suggestions by the Canadian Electricity Association that there might be some way of reducing those emissions, chiefly as a result of converting coal-fired plants to natural gas when they run the course of their service lives. There may also be some prospects that are more associated with the restructuring of the electricity industry and the possibilities of further interprovincial trade. If you think of it in terms of Ontario sitting between two provinces that basically generate all their electricity from hydro—which does not emit, of course—there is a suggestion there might be some possible gains from trade.

As I'm sure you know, the notion of the energy chapter, for example, and the internal trade agreement is in some sense geared toward the promotion of that. So I think there may be some ways, although I don't think they're necessarily technological ways in the electricity area, although renewables would play some role. But it may be actually more through a conversion from coal to gas and the possibility of lessening the trade barriers.

On the oil and gas side, I think there are some possibilities, although I'd have to be much more of a scientist to tell you about all of them. But my understanding is there is a fair bit that could still be done, notwithstanding what we've already put in the projection, in terms of improving production practices in the oil and gas industry.

There's also some prospect, if you're familiar with the notion of sequestration, which is basically that you take carbon dioxide from a coal-fired electricity plant, for example, and pump it down wells for enhanced oil recovery. It produces more oil. And that may not be a great thing from some perspectives, but it is a way of in fact taking care of the carbon dioxide. So I think there are some prospects there. To be fair, I don't think there has been much study of that area and perhaps more is warranted.

Mrs. Karen Kraft Sloan: Good, thank you very much.

The Acting Chairman (Mr. David Pratt): Mr. de Savoye.

[Translation]

Mr. Pierre de Savoye: You were just speaking about electrical generation using coal-fired plants. We know that the Americans are talking about deregulation. This is already in place in the United States, and Hydro-Québec has been involved in that, although other Canadian provinces have not yet done so.

I've had an opportunity to meet with our American colleagues twice in the past two years. I asked them whether transporting electricity across the continent could cause American utilities to manufacture more electricity using fossil fuels, a practice which would run counter to the objectives we are seeking. I was told that I shouldn't worry, but I do nonetheless. I would like to hear your views on that.

[English]

Mr. Neil McIlveen: You'll have to excuse me, I didn't quite catch all that.

Mr. Pierre de Savoye: The Americans are projecting to wheel electricity across the continent. They will make that electricity in fossil fuels utility plants. This will contribute, to a certain extent, to making these curves higher, not lower. That was the concern I gave to our American counterparts. How do you see that? Are we at risk that electricity will increase the total output of carbon dioxide?

• 1735

Mr. Neil McIlveen: I'm not sure I know the answer to that. In a very narrow accounting sense it may not increase our emissions, although it will increase theirs. But the total amount of emissions still may go up.

I don't want to be obtuse about this, but there is a possibility certainly. I've heard the argument as well that suggests deregulation in the United States, given they're so heavily coal-based and the possibility, as you've said, of wheeling it across state lines and internationally, actually could increase their emissions and therefore by definition global emissions, I suppose.

It is a possibility. I would be a little uncomfortable with saying that it is a likelihood. It's a possibility that this could happen. It depends a bit on what a deregulated electricity industry in the United States does. Are those coal plants all that cost-effective? I suppose they are in a sense. They tend to be old and they're fairly effectively depreciated.

On the other hand, a gas technology, which has obviously less in the way of emissions, is awfully competitive with a new coal-fired plant at the moment. It's quick and it's modular and you don't have to go through very extensive environmental regulation in order to put one together. It's quite possible that entrepreneurs, companies in the United States, would choose gas as opposed to coal, notwithstanding the fact they have a lot of it, because it might ultimately be cheaper and more cost-effective for them.

As you've probably sensed, I'm ambivalent on that one. I'm not sure how it would—

Mr. Pierre de Savoye: But that illustrates the fact that we can here, despite our best intent, buy electricity from the United States that could contribute to the overall gas effect.

Mr. Neil McIlveen: Increasingly, with the restructuring of the industry, some people argue that you won't really know where you're getting the electricity. It won't be that you actually will go to Con Edison or something like that and say you want to buy this many kilowatt-hours. You'll probably do it through a broker. That's certainly been the experience in the natural gas business. You may not know where the electricity is coming from. The broker actually is the central point for sale.

Mr. Pierre de Savoye: I'll keep the pressure on our American counterparts then.

The Acting Chairman (Mr. David Pratt): I don't think there are any further questions. Yes, Mr. McIlveen.

Mr. Neil McIlveen: I believe Mrs. Karen Kraft Sloan asked about tar sands or oil sands. I did find it and immediately lost it here. What we had incorporated in our forecast is...we've broken it down into two types, oil sands mining and what's called in situ. For oil sands mining, our projection was it would go from what is about 280,000 barrels a day currently to about 450,000 barrels a day by 2020—not quite a doubling, but close.

The in situ, which is the process that is used at Cold Lake, for example, would go from about 150,000 barrels a day to 400,000 barrels a day. You can add those two up and that gives you oil sands in total. That was largely based upon a lot of discussions with Alberta and with the national assessing task force people. It may actually be a little light, in the sense that I have heard since then that there are quite a number of applications for oil sands projects.

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Mrs. Karen Kraft Sloan: Yes, there are more.

Mr. Neil McIlveen: Not all of them will necessarily go ahead, but that figure could be a little low.

Mrs. Karen Kraft Sloan: Thank you very much.

The Acting Chairman (Mr. David Pratt): Thank you again, Mr. McIlveen, Mr. Audet, and Mr. Marty, for sharing your expertise with us this afternoon. It's very much appreciated.

Thank you to members of the committee for indulging the acting chair.

The committee stands adjourned until tomorrow morning.