Canada should proceed with its own climate change initiatives — including a cap and trade system for carbon — whether or not it has the support of the U.S., a government appointed advisory panel has recommended.

A transport truck arrives at a steel plant in Hamilton, Ont. A federal panel has recommended Canada implement a climate change policy with or without U.S. harmonization for now. (Adrian Wyld/Canadian Press)

In a report Tuesday, the National Roundtable on Environment and the Economy suggested Canada adopt its own solution to climate change over the next 10 years, while the U.S. decides what direction it will take in its own economic and environmental policies.

"Harmonization, where possible and when feasible, makes sense for Canada," NRTEE president David McLaughlin said. "But in the face of persistent U.S. uncertainty as to its own climate policy future, Canada will need to look to its own options, in the right way, at the right time."

Canada has pledged to reduce its emissions to 17 per cent below 2005 levels by 2020, less than 10 years away. Waiting for the U.S. to chart its course puts Canada in danger of not meeting those targets, the paper said. Worse still, it might require a higher carbon price in Canada than in the United States to achieve those targets.

Ottawa has already moved to harmonize passenger vehicle emissions with the United States, which adheres to the stringent "California emissions" standard. Moving the electricity-generating sector in a cleaner direction has also begun, but thus far Ottawa has declined to take major steps in reining in emissions from the oilsands.

The report calls for the implementation of a carbon cap and trade system, where companies and industries that emit more than their share of carbon can purchase credits to offset that from companies that reduce their emissions more efficiently.

Among the four pillars of the report is a request that the price limit for a tonne of carbon be no more than $30 per tonne higher in Canada than in the U.S.

The paper also calls for limited international permits and domestic offsets, with the aim of keeping domestic carbon prices lower for Canadian firms.

Calls for technology investment

It also calls for Ottawa to set up a technology fund of between $500 million and $2 billion to stimulate investment in needed emission reduction technologies.

"We need to understand how we can meet our environmental responsibilities as a sovereign state and a global actor fully comprehending the unique economic ties we enjoy on this continent," NRTEE chair Bob Page said. "We are looking towards conformity in purpose, not uniformity in detail."

The NRTEE is an independent body that advises Ottawa on sustainable development. Tuesday's report was the body's third extensive report on Canada's climate change strategy.

The Pembina Institute, a sustainable energy think tank, called the report "detailed and credible" and said it "shows that Canada would see strong economic growth across the country even if we lead the United States in adopting a broad-based price on greenhouse gas pollution."

The institute said the analysis "shows that current federal policies get Canada less than 13 per cent of the way towards the government's 2020 target — leaving a gap of 178 million tonnes of greenhouse gases between the target and projected emissions growth, even once provincial policies are factored in."