A flawed plan and a government that won't say boo

Simon Jackson on the need for a real Canadian climate change plan.

The recent downgrading by world leaders of the climate change summit in Copenhagen next month seems to have taken some of the steam out of this debate.

You could almost see the relief in Stephen Harper's face as he announced the back-to-the-drawing-board intentions at the APEC conference in Singapore.

But this is not the time to just sit back and do nothing. Indeed, there are two broad imperatives being played out here.

One is to find an accommodation between the big greenhouse gas emitters in the developed and the developing world (read the U.S. and China).

Don't let it melt: A young girl in Beijing's Temple of Earth Park holds an umbrella over an ice sculpture as part of a climate change awareness exhibition in August 2009. (Jason Lee/Reuters)

The other is to find an accommodation within a country such as Canada, where the regional costs of dealing with this problem has the potential to tear the nation apart. 

It is all well and good to trumpet the high stakes of climate change and the long-term economic and environmental impacts of global warming.

Yet the reality remains that we live in a me-first society and if we are actually to do something about this then Canadians in all regions must understand and buy in to any solution.

Until now, the absence of a road map here has stymied real debate.

But that has changed with the recent, Copenhagen-anticipating release of a study by the Edmonton-based Pembina Institute and the Vancouver-based David Suzuki Foundation, sponsored by TD Bank.

We now have something that illustrates what specific costs and policies will be required for Canada to reach either the current Conservative government's planned emission reduction target or the one (preferred by environmentalists) outlined in the Kyoto accord.

For the first time, there is a real road map that offers Canadians the ability to understand what is truly at stake — which may be nothing less than our national fabric.

Price tag

First the good news: There is little economic difference between implementing the government targets, which are often said to be too weak, and implementing the more stringent Kyoto targets.

It is a difference of only 0.1 per cent in GDP growth.

If we can do that much more to solve climate change for that little of a difference, logic suggests we should err on the side of doing more.

More importantly, the report also concludes that we can meet all of our targets by 2020 and without job loss. In fact, with modest job and GDP growth.

The bad news, however, no matter how you spin it or what mitigating policies you advance to alleviate the pain, far outweighs the good in my view.

Meeting the targets would require abrupt and extensive government intervention — a philosophical divide that will alienate a minimum of 20 per cent of the country off the top — and would fundamentally alter the Canadian economy.

"The sheer magnitude of the shock means there are lots of moving pieces and some of them move in extreme fashion," the TD Bank's chief economist Don Drummond, a former federal finance official, told the Globe and Mail.

Translated, that means that while the national numbers play out all right, the micro and regional breakdowns will undoubtedly cause great suffering in different parts of the country.

Cap and trade

The crux of the report is a call for a national cap-and-trade system on carbon emissions, to be set up by 2011, which would price carbon at up to $100 per tonne by 2020.

That is quite a bit higher than the current U.S. proposal, which may be totally unrealistic, of between $15-$26 per tonne. And it would deliver between $46 and $72 billion dollars annually to the federal government by 2020 in order to green the Canadian economy.

These funds would, among other things, kick-start more mass transit projects, enforce California-level fuel efficiencies on cars, underwrite carbon capture for all new oil and gas projects and ensure that all new homes would be 50 per cent more energy efficient.

While the study proposes to give nearly half of the funds generated from the plan back to the public through income tax cuts and home rebates, especially to those living in the carbon economy-based provinces of Alberta and Saskatchewan, it nonetheless admits that there would still be a dramatic shock to the Canadian system.

The oil and gas industry would be the hardest hit, with upwards of a 26 per cent cut in extraction and close to 20 per cent reduction in refining — cuts that would have huge job implications. 

In fact, while central Canada could see increased employment and GDP growth under this plan, Alberta could see its GDP shrink by possibly 12 per cent.

And though the report proposes a huge realignment of federal transfers to the provinces to offset these economic costs, the on-the-ground impact in Western Canada would be both economically and psychologically shattering. 

Even if you agree with the report's findings that our climate dreams are possible and that the mitigating policies are workable, the truth is politics is politics.

If the climate policies reflecting this report were to be forced upon an unwilling public, you can be guaranteed that this issue will never be put to bed.

Like the gun registry, no matter its virtues, they would become a lightning rod for perpetual discontent and always at risk of being thrown out by a new government, an uncertainty that would undermine future investment in the Western economies even more.

What to do?

Still, the stakes are too high to give up, especially for any young person contemplating a family. It is their future we are debating.

Up until now, I believed that there was a fair argument to be made that the federal government's non-active stance on climate change made some strategic sense for both Canada and the prospects of a truly global treaty.

But where Ottawa has failed spectacularly is in rallying Canadians to understand this issue and so bridge our natural cleavages.

The TD study has filled a vacuum where critical information was lacking. But it has also set off widespread panic by Western business leaders and vested interests about the sacrifices that must someday be made to address climate change.

However, by sitting on the sidelines and seeming to wash its hands of the debate, the Harper government threatens to derail support for this issue for good.

The findings of this particular report may not be good enough, but they should be the springboard for a national debate.

For example, if not cap and trade, then how do we come to build homes that are 50 per cent more energy efficient? 

I'm not naive enough to suggest that climate change will be solved simply through debate or changing light bulbs. But there is certainly a role to play here for all kinds of ideological approaches.

Channelling the very conservative idea of self-reliance and entrepreneurialism, a truly national government could encourage Canadians to rise to the occasion to collaborate on innovative solutions that, in the collective, may even allow us to have our cake and eat it too.

Bottom line: It is time for Ottawa to start putting some real ideas forward.