NRGO Committee Report

At the U.N. Conference on Environment and Development in Rio de Janeiro in 1992, 154 of the 161 participating countries signed the U.N. Framework Convention on Climate Change. Canada ratified the Convention on December 4, 1992. The Convention's objective was the "stabilization of greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system". 

In April 1995, the signatory countries met in Berlin to strengthen the wording of the Framework Convention, in particular by attempting to set a schedule and specific reduction targets for greenhouse gas emissions. Although the participating countries were unable to reach a consensus, Canada maintained its commitment to stabilize its emissions at 1990 levels by the year 2000. In November 1996, the Canadian Minister of the Environment estimated that, without increasing its efforts, Canada's emissions in the year 2000 would be eight per cent greater than the 1990 level and that they would likely continue rising thereafter. 

In early December, the signatory countries to the Framework Convention on Climate Change will start new international negotiations in Kyoto, Japan. At this third Conference of the Parties, participants must attempt to negotiate an international protocol or another legal mechanism for the reduction of emissions after the year 2000. A number of signatory countries, including the United States, Australia, Japan and the European Community, have already made their respective positions known in anticipation of the Kyoto Conference. The federal, provincial and territorial ministers of Energy and the Environment did the same at their recent meeting in Regina, Saskatchewan, on November 12, where they agreed that Canada would stabilize its greenhouse gas emissions at 1990 levels by 2010. 

The House of Commons Standing Committee on Natural Resources and Government Operations feels that the Kyoto Conference is very important for Canada and for the international community as a whole. The results of the Kyoto Conference may have an even greater impact for Canada since it is characterized by a geo-climatic situation and industrial structure that result in high energy consumption. 

The Committee has thus thought it necessary to hear the main groups concerned by the issue of climate change and the control of greenhouse gas emissions so that it can outline its own position to the federal Minister of Natural Resources. The Committee is no less aware that this is a very complex question that holds out many challenges for Canada. It definitely does not claim to have ascertained all the aspects of this question and can foresee returning to some of those aspects following the Kyoto Conference, in particular to explore technological avenues open to Canada in the area of natural resources and energy.

In fact, this report deals much more with climate change and greenhouse gas emissions, in the context of the commitments that will soon be negotiated in Kyoto, than with the means by which Canada will meet its commitments.

The atmosphere is Earth's natural greenhouse. It acts like greenhouse glass by retaining the sun's heat close to the planet's surface. The greenhouse effect thus helps maintain Earth's average temperature at approximately 15^oC; without that effect, the figure would be -18^oC, making our planet uninhabitable. The greenhouse effect is caused when the sun's energy is trapped mainly by carbon dioxide (CO₂) and water vapour in the atmosphere, and to a lesser degree nitrogen oxide, methane, chlorofluorocarbons (CFCs) and ozone. These so-called greenhouse gases come from both natural and artificial sources: the automobile engines and factories that burn fossil fuels (carbon, oil and natural gas), industrial chemicals and artificial fertilizers, decomposing organic matter and waste, volcanoes, forest fires and the respiration of plants and animals. 

The theory of greenhouse gases and climate change essentially holds that an increase in greenhouse gas emissions, accelerated to a large degree by human activity, results in the warming of the planet's climate. CO₂, the main human source of which is still the combustion of coal, oil and natural gas, is currently responsible for more than 60 per cent of the accelerated greenhouse effect. Nearly half of the CO₂ of human origin is captured by the oceans and the Earth's vegetation, which act in a way as a carbon sink, but it is estimated that atmospheric levels are continuing to increase by more than 10 per cent every 20 years. Methane (CH₄) currently represents 15 to 20 per cent of the accelerated greenhouse effect. However, this gas is less persistent in the atmosphere than carbon dioxide, which reduces the relative significance of its contribution to the phenomenon. Nitrogen oxide, chlorofluorocarbons and tropospheric ozone represent the remaining 20 per cent of the accelerated greenhouse effect. 

Studies show that global emissions levels of all the major greenhouse gases rise as a result of human activity. The levels of future emissions will depend on global demographic, economic, technological and social trends. Various scenarios have been developed to study the consequences of specific hypotheses regarding future trends. Most studies tend to indicate that a scenario of non-intervention or stabilization of world greenhouse gas emissions will result in a rapid increase in global greenhouse gas levels in the atmosphere, which would be due in large part to the demographic and economic growth of the developing countries. According to estimates, pre-industrial CO₂ concentrations could double or triple by the year 2100. 

Many studies have also been conducted both in and outside Canada in an attempt to forecast the environmental, social and economic impact of more or less rapid climate change. Although the topic is still controversial, scientists, and more particularly climatology specialists, fear that a continuous increase in greenhouse gases in the atmosphere will lead to significant climatic changes that will considerably disrupt natural ecosystems and human society, particularly if they occur quickly or in sudden stages. Experts believe that global warming could have, and already has had, the following consequences: 

As regards the degree of global warming that could result from continuous increases in atmospheric greenhouse gas concentrations, Environment Canada concludes in its 1997 review of recent technical and scientific reports that a doubling of CO₂ levels would raise the world's average temperature by at least 0.98^oC. It is thought that the average temperature has already risen by from 0.3 to 0.6^oC over the past century. 

All reliable studies and models have been collated and carefully examined by the Intergovernmental Panel on Climate Change (IPCC), which was established in 1988 by the World Meteorological Organization (WMO) and the United Nations Environment Programme (UNEP). IPCC's evaluations of available knowledge on the science of the climate system and the probable impacts and the socio-economic aspects of climate change are recognized by many as the most thorough and most balanced available. One of the witnesses heard by the Committee on Natural Resources and Government Operations in the course of its review outlined the most recent observations made in Canada and the assessments conducted by the IPCC. 

The Canadian expert associated with IPCC reported the following information to the Committee: 

On the basis of these observations, the some 2,000 IPCC scientists included in their last report that, despite persistent scientific uncertainties, the range of evidence available suggests that human beings are having a discernible influence on the global climate. 

Economic analyses of the issue of climate change generally focus on two specific aspects: the economic costs associated with the apprehended impact of accelerated global warming and the costs of greenhouse gas emission control measures for an economy such as Canada's, which is highly dependent on intensive energy use.

In the view of IPCC's Task Force III, which has considered the economic and social aspects of climate change, actions to attenuate the effects of climate change appear to be economically justified. The risk of net global damage, the estimates of apprehended damages and the costs already associated with catastrophic events potentially related to climate change appear to militate in favour of strong intervention to control greenhouse gas emissions. IPCC is also considering the non-climate benefits for society and the country as a whole, particularly environment and health benefits related to the reduction of atmospheric pollution. 

To analyze the costs of attenuating greenhouse gases, economists have developed two types of models, "descending models" of the expanded scale economy and "ascending models" which integrate more detailed studies of engineering costs. As the Conference Board of Canada emphasized to the Committee, the descending models tend to show that the costs of stabilizing greenhouse gas emissions could present a reduction of 1.5 to 2.3 per cent of Canada's GDP in 2010, which could amount to an economic loss of $18 to $28 billion by that year. 

As the Committee also heard, other stakeholders criticize the descending models because they fail to integrate the economic gains associated with the development of new technologies and with the attenuation of environmental and health effects, which is what the ascending models do. Studies based on these models have concluded that the use of energy efficiency and energy conservation measures could reduce total greenhouse gas emissions by 10 to 30 per cent at minimal or no cost to the economy. Some economists, however, criticize the fact that these studies do not integrate global economic interactions or the impact of changes in international trade and investment as well as the macro-economic models. They also claim that the benefits of technological development and the attenuation of environmental and health effects arrive later and are usually less certain.

Nevertheless, as the independent research institute concluded, the forecast economic impact depends to an enormous degree on the assumptions underlying the analysis and the means of action contemplated. Second, there is still considerable uncertainty, particularly surrounding the reaction of consumers and industries to various incentives. Lastly, much economic research and scientific work remains to be done. 

Some industrial sector witnesses cautioned the Committee to consider the Canadian perspective on this issue, by raising a number of important points including: 

• Canada as a whole will be negatively impacted more severely than other countries by measures to achieve a stabilization target;
• developing country participation in any protocol should recognize the need for a level playing field among nations;
• some of Canada’s industries, such as the forest and energy sectors, are particularly vulnerable to emission reduction targets;
• stabilization of GHG emissions in the next decade means curbing economic growth;
• proceed cautiously, focusing efforts on enhancing voluntary measures, public education and the responsible use of energy and;
• targets should not be legally binding and should be flexible. 

In order to achieve a balanced approach , the Committee believes these and other concerns must be addressed, and therefore recommends;

Furthermore, based on the testimony on the importance and necessity for Canada and the international community to clearly ascertain the environmental, social and economic impact of climate change and to accurately assess the scope of greenhouse gas emission control measures, the Committee on Natural Resources and Government Operations recommends:

The international scientific community first acknowledged that climate change was a significant problem in 1979 at the first World Climate Conference. In that same year, the World Climate Programme was introduced to promote and co-ordinate international research on global climate processes and the impact of climate variability and change. Eight years later, 24 countries signed the Montreal Protocol to eliminate chlorofluorocarbons (CFCs). 

In 1988, the Intergovernmental Panel on Climate Change met to assess the state of scientific knowledge on climate change. In that year as well, 46 countries met at the World Conference on the Changing Atmosphere in Toronto, where they proposed for the first time a reduction in CO₂ emissions. The second World Climate Conference in 1990 afforded an opportunity to review the first evaluation report by the Intergovernmental Panel on Climate Change. That report scientifically confirmed that climate change had occurred and paved the way for development of an international convention. 

The Framework Convention on Climate Change was adopted in 1992 at the U.N. Earth Summit in Rio de Janeiro. Today, 169 countries have signed the convention, the objective of which was to stabilize greenhouse gas concentrations in the atmosphere at a level that would prevent serious human interference in the climate system. The Parties to the Convention then had to determine a stabilization level for greenhouse gas emissions, set a timetable, frame effective policies and develop appropriate technologies. 

The supreme organization of the Convention is the Conference of the Parties (COP). COP, whose role is to promote and examine the Convention's implementation, comprises all the countries that have ratified the Convention. The first Conference of the Parties (COP 1) was held in Berlin in 1995. Participants there observed that the commitments that had been made were insufficient, and they felt it was appropriate to negotiate, among other things, a protocol to quantify commitments to reduce greenhouse gas emissions after the year 2000. The initial objective was to have these new commitments adopted in 1997 at COP 3, and thus before the Kyoto conference. COP 2, which was held in Geneva in 1996, considered progress achieved since the Berlin meeting, reviewed the national communications process and endorsed the second report by the Intergovernmental Panel on Climate Change. 

The third conference of the Parties will be held in Kyoto from December 1 to 10 of this year. Its objectives are to adopt the results of the Berlin mandate and to re-examine the national communications processes, as well as international intervention in climate change. It is also to lead to the adoption of legal instruments committing the industrialized countries to limiting greenhouse gas emissions after the year 2000, which, in the view of all Parties, is the ultimate challenge in negotiations between the industrialized countries and those whose economies are rapidly expanding. 

Nearly five years have elapsed since the Framework Convention on Climate Change was ratified. The signatory countries have introduced policies and measures to control their greenhouse gas emissions, and most of the countries that undertook to stabilize their emissions at 1990 levels by the year 2000 have been unable to achieve that objective. 

The Secretariat of the Framework Convention on Climate Change estimates that, among the developed countries, the United States, Japan and Canada were responsible for 85 per cent of increased greenhouse gas emissions between 1990 and 1995. During that same period, Russia, Germany, Poland, Great Britain, the Czech Republic, Bulgaria and Estonia reduced their respective emissions, while 14 other countries - all European - stabilized their emissions at more or less one per cent of 1990 levels. However, a large proportion of those emission reductions occurred in countries such as the former East Germany and the former USSR, which had to dismantle a large part of their old and highly polluting industrial infrastructure. 

It was also reported that, all together, the developed countries signatories of Schedule I of the Convention, including Canada, have managed to reduce their overall greenhouse gas emissions by five per cent relative to the initial 1990-level stabilization objective for 2000. While the Committee on Natural Resources and Government Operations acknowledges that, according to evaluations in the year 2000, Canada's emissions will have exceeded 1990 levels by an estimated eight to 13 per cent, it is pleased with the overall performance of the signatory countries. The Committee believes that this situation shows how difficult it is to set identical, common objectives for all countries and all regions (or provinces) of a vast country such as Canada. Although the question of climate change must be addressed through a comprehensive approach, this should probably be done in a way that differentiates among the regions of a country or among countries based on their respective characteristics. 

Analysis of Canada's performance clearly indicates the extent to which a country's socio-economic characteristics play a fundamental role in its ability to stabilize or reduce greenhouse gas emissions over a relatively short period of time. As some witnesses told the Committee, Canada's economic performance in recent years, together with its demographic growth, have made it very difficult to stabilize greenhouse gas emissions at 1990 levels. Without this sharp growth, and based on another reference year such as 1988 instead of 1990, Canada might have met its commitments. 

The recent position of Canadian Ministers of Energy and the Environment stresses the importance of respecting regional characteristics and taking Canada's international competitiveness into account in determining what Canada's effort should be. A number of witnesses who appeared before the Committee also made this point and emphasized that the 1990 reference year proved to be a very poor choice for Canada. At that time, the country was entering a very deep economic recession and therefore posted lower greenhouse gas emission levels than during a period of strong economic growth such as, for example, 1987 or 1988. Some would even say that Canada should take advantage of the Kyoto negotiations to dispute the selection of 1990 as the reference year for the stabilization or reduction of greenhouse gas emissions. 

In addition to Canada's strong demographic and economic growth, the Committee feels, as did a number of the witnesses it heard, that the characteristics of Canada's economy and industrial structure should be considered in assessing its ability to reduce greenhouse gas emissions. The Canadian economy depends to a large degree on exports and its industrial structure remains highly energy intensive. Some witnesses cited the example of Canada's U.S. exports of natural gas, which can replace the use of coal and oil in electricity generation, thus enabling our trading partner to reduce its own greenhouse emissions. 

Based on the testimony it heard on the subject, the Committee recommends:

Many other particular characteristics must also be taken into consideration in evaluating Canada's performance and determining the most appropriate ways to control greenhouse gas emissions. The Committee was particularly interested in the entire issue of the role of Canada's vast forests as a carbon sink. In addition to their capacity to assimilate carbon during the growth phase of the trees, the ability of processed wood products to store carbon for decades, if not centuries, should not be neglected. The Committee grasped the importance of considering the entire life cycle of a product when making energy choices, failing which there will always be a risk that an economic or energy efficiency measure will be immediately annihilated by an energy expenditure in the same or in a neighbouring sector. In this regard, the way in which Canada uses and manages its immense forest resources is a fundamental factor in a holistic analysis of the entire issue of climate change from a Canadian perspective. 

Moreover, after hearing many witnesses representing the Canadian energy sector, the Committee is convinced of the importance for Canada of preserving all the necessary flexibility that it needs for keeping its diversified energy supply. It therefore recommends:

Despite differing views on the scope of climate change and the significance of anthropogenic contributions, some industrial associations said that the world community should take action sooner rather than later to control greenhouse gas emissions. The Committee tends to agree with this view and to favour the principles of precaution and prevention instead of waiting to react to a problem whose reversibility may be difficult to judge. 

The Committee interprets the position recently reached by the federal, provincial and territorial Ministers of Energy and the Environment in Regina, on November 12, as a statement that action is necessary on greenhouse gas emissions. The Committee also believes that climate change represents a genuine problem which must be diligently and urgently addressed by the entire international community. 

Regardless of Canada's position and the results of the Kyoto Conference negotiations, the Committee strongly believes that Canada must make every possible effort to encourage and support measures likely to stabilize greenhouse gas emissions by 2010 in a manner similar to that stated in the agreement reached by the federal, provincial and territorial Ministers of Energy and the Environment. Otherwise, the Committee fears that Canada will miss excellent technological, and thus economic, development opportunities. Canada's efforts must focus particularly on energy efficiency in all economic and development sectors. 

The Committee therefore recommends:

The Committee agrees with some of the witnesses it heard that it is not solely up to industry to make the necessary efforts to stabilize or reduce Canada's greenhouse gas emissions. On the contrary, the Committee firmly believes it is the responsibility of all Canadians as individuals, consumers and players in specific sectors to help achieve the objectives Canada sets in the wake of the Kyoto Conference. The Committee cannot overemphasize the importance of individual and collective action. It is up to every Canadian, as a consumer or business leader, to take appropriate action to help Canada meet its commitments. 

The Committee recommends: