kyoto delusion?
The conservative minority has recently unveiled the proposed Clean Air Act, the long-awaited 'Made-in-Canada' approach to climate change. It doesn't mention our Kyoto commitments. Remember? We're legally bound by an international treaty to cut our national greenhouse gas emissions to 6 percent below 1990 levels between 2008 and 2012. Canada has to figure out how to walk this international tightrope.

Canada cannot reach its Kyoto target. That would mean taking 300,000 megatonnes of carbon from the economy in the next six years. So should we buy some credits from Russia? The European Union environment commissioner Stavros Dimas in May was reported to say "What I expect that the Canadians will honour their commitments." Somebody needs to renegotiate this lease.

The chart below provides a comparison of Canada's Kyoto commitments and actual GHG emissions.

canada's shame?
Some commentators have described the Kyoto Accord as fatally flawed from the outset. The absence of some of the biggest polluters certainly would point in that direction. In Burning Our Money to Save the Planet, Mark Jaccard suggests that continuing with Project Green would have cost us $85 Million without affecting our emissions trajectory.

An interesting aside is that the Clean Air Act could be modified to position Canada as an international political driver of a new world accord. As the US prepares to move on Climate Change, Canada should be ready to broker the new international deal. We have an historic opportunity to implement effective domestic policies, and figure out how to bridge the gap between the differing international approaches.

Varying regional initiatives to combat climate change, and initiatives arising organically from trade-relations, will require interdependent CO2 calculation methodologies and mechanisms for trade. Canada is uniquely positioned between the Europeans and the Asia-Pacific Partnership (AP6). It all depends on the egos and negotiation skills of the leaders of each of our political parties, and our prime minister.

carbon tax?
The Clean Air Act must be revised to have a gradually decreasing emissions cap and to add a gradually rising tax on emissions of CO2 and other GHGs. A price has to be placed on carbon: Release it and you pay; save or buy it and store, and you gain. Taxes have to be adjusted to penalize carbon emissions at the expense of other activities that are carbon-reducing or neutral. (Interestingly in some jurisdictions, mirroring a carbon tax with reductions in income or other taxes make the carbon tax revenue neutral).

There must be regulations setting clear, mandatory targets (ie. not intensity based), easily attainable at first and more demanding as years go by, so that companies, governments and consumers can adjust. In the UK and other European countries, carbon taxes have started small and a long-term timetable for escalation is spelled out clearly.