Industry grumbles but says it can meet emissions targets

Last Updated: Friday, April 27, 2007 | 1:01 PM ET

CBC News

Canada's major industrial polluters aren't thrilled with the federal government's new plan to reduce greenhouse gas emissions, but acknowledged it could have been much more onerous.

"This is far more palatable than Kyoto," said Jayson Myers, chief economist of the Canadian Manufacturers and Exporters. 

"I think these are more realistic targets," he said. "They're tough targets, they're really stretch targets, but much more realistic than the Kyoto target that would have forced us to find alternative sources to fossil fuels in a period of five years," he told CBC News.

For one thing, the Tory plan does not include a hard cap on greenhouse gas emissions. Instead, the proposed regulations call for intensity-based cuts.

Under this scenario, companies will be required to cut their emissions per unit of production by 18 per cent over the next three years. So if production doubled, emissions could still increase.

The 18 per cent emissions reduction target is based on 2006 levels, rather than Kyoto's 1990 base. Industrial companies that build new facilities will get a three-year grace period.

The Conservative government says its plan will result in a reduction of Canada's total greenhouse gas emissions of 20 per cent by 2020.

"These are the toughest rules the oil and gas industry will face anywhere in the world," Pierre Alvarez, president of the Canadian Association of Petroleum Producers, told CBC News.

But Alvarez said he was pleased the new plan's emissions reduction targets are intensity-based, and he noted approvingly that the oil and gas industry would not be singled out for harsher treatment.

The energy industry — especially the oilsands producers in Alberta — are the biggest polluters in the country. But the measures will also apply to the forest products industry, smelting and refining, iron and steel, cement and chemical production, electricity generated by fossil fuel combustion, and some mining sectors.

Too many unknowns: auto industry 

The green plan warned of "real" but "manageable" price increases for such manufactured goods as cars and home appliances, as well as fuel and electricity.

The Canadian auto industry said there are still too many unknowns to know what the Tory green plan might mean for new vehicle prices. 

"The whole plan is much too vague for that — to make any sort of determination," said Mark Nantais, president of the Canadian Vehicle Manufacturers' Association. "We're going to have to get a better understanding of what they really want here."

The federal measures call for mandatory fuel-efficiency standards for the auto industry by the 2011 model year. But the standards haven't been established yet. 

The forest industry complained that it's not being given credit for the emissions cuts it's already made.

"Since 1990, our industry has already reduced emissions by 54 per cent on an intensity basis," said Avrim Lazar, president of the Forest Products Association of Canada.

"Asking for another 18 per cent by 2010 on top of that without proper recognition of what has already been done is simply unrealistic," he said in a statement.

Heavy industrial polluters have been given a variety of ways of meeting the new greenhouse gas targets:  

• They can actually cut their greenhouse gas emissions.
• They can contribute to a technology fund.
• They can take part in a domestic emissions trading system — buying carbon credits from other companies.
• They can trade emissions and buy credits under the Kyoto Protocol's Clean Development mechanism, which allows developed countries to gain emissions credits for financing environmentally friendly projects based in developing countries.    

"It's tough," Environment Minister John Baird said of the new plan.

"There is no doubt about, in the worst year of this plan, we could see a loss of economic activity in Canada of $7 or $8 billion," he said.

That could amount to a slowdown of up to half a per cent in GDP growth in any given year, he said.

"Business will be broadly pleased because the targets are being phased in gradually," said Ross Healy, CEO of Strategic Analysis Corp. 

Nova Scotia Power says it will be a challenge to meet the new targets.

Spokeswoman Margaret Murphy said there must be a debate among people in industries, government and the general public before the utility decides what it's going to do to meet the new rules.

"People really need to step back collectively and decide here in Nova Scotia what are our priorities," she said.

"Obviously, clean energy is important — our customers have told us that. And everyone recognizes that cleaner energy comes at a cost. But energy security is also an issue for us here in Nova Scotia.  How important are we wedded to that idea of making power with local, domestic sources?"