ENSU Committee Meeting

STANDING COMMITTEE ON ENVIRONMENT AND SUSTAINABLE DEVELOPMENT

COMITÉ PERMANENT DE L'ENVIRONNEMENT ET DU DÉVELOPPEMENT DURABLE

EVIDENCE

[Recorded by Electronic Apparatus]

Tuesday, November 18, 1997

• 0908

[Translation]

The Chairman (The Hon. Charles Caccia (Davenport, Lib.)): Good morning, ladies and gentlemen. In accordance with Regulation 108(2), we will work today, as we did yesterday, on questions relating to climate change.

[English]

Those of you who were present yesterday may recall a brief by the finance department's representative in which the magic word “cost-benefit” was included. We had a brief discussion about that cost-benefit analysis yesterday, but not enough.

If you are interested in that aspect of decision-making, you may want to read the excellent paper by the IPCC, “Second Assessment: Climate Change 1995”. You all have a copy of this, en anglais and in French. There is in there a short section, number 6 on page 49, entitled “Applicability of Cost and Benefit Assessments”. It's very short and it is very lucid, and it may give you sufficient weapons, if you like, whenever that word is mentioned in future, to develop a good exchange of thoughts. That also gives me an opportunity to urge you to refresh your memory with the IPCC assessment of 1995, because it's an important document.

• 0910

This morning we have as a guest Dr. Jim Bruce, and we're very pleased and honoured to have him, because of his long career as a scientist and also as a former assistant deputy minister in the Department of the Environment.

Dr. Bruce participated at the first conference on climate change held in Canada, and perhaps ever held in the world, in 1987 in Toronto. That was the first time, as far as I know—perhaps he can correct me—when this issue was really discussed by scientists, energy people, researchers, politicians, you name it. On that occasion, for the first time, the target of -20% by the year 2005 emerged, a target that was incorporated in the Liberal Party platform of 1988. At that time 2005 was pretty distant. It was 17 years away, so it seemed quite reachable.

To complete the introduction of Dr. Bruce, who has lived with this issue for a long time, I might conclude by also congratulating him, on behalf of all members of this committee, for having been given the recognition of the Order of Canada last summer, and by saying how proud we are and pleased that he was able to come.

Dr. Bruce, the floor is yours.

Dr. Jim Bruce (Member, United Nations Intergovernmental Panel on Climate Change): Thank you very much, Mr. Chairman and members.

I've been asked this morning not to go over the ground, which you have already ploughed rather well, on the science and economics of climate change, but to simply report on the cross-Canada briefings that have been held by the Canadian global change program.

The Chairman: Excuse me for interrupting. The ancient Romans used to say repetita juvant, so whatever you might wish to repeat will not harm at all.

Dr. Jim Bruce: I was going to say, Mr. Chairman, that I would bring to your attention a number of issues that arose in these briefings and that do go back to the science and economics of climate change. With your permission, I'll bring those forward.

It's interesting to note that the Canadian global change program of the Royal Society, with the support of a number of sponsors, is nearing the end of a series of briefings on climate change in five cities across Canada: Calgary, Vancouver, Montreal, Toronto, and Halifax.

The range of sponsors for this series of workshops and briefings is quite impressive. The workshops were supported by Environment Canada; TransAlta Utilities of Alberta; British Columbia's Ministry of Environment, Lands and Parks; le ministère de l'Environnement et de la Faune du Québec; Hydro-Québec; Nova Scotia Power; and Kimberly-Clark of Nova Scotia. They were all supporters of these briefings.

In organizing the workshops and briefings, the global change program developed partnerships with a number of regional groups. In each of the major cities, one of the university groups or research institutes was a co-partner with the global change program in sponsoring and organizing these briefings.

The program in each centre was in three main parts. The morning briefing session covered the science; then there was a discussion of the potential impacts of climate change in that region where the briefing was taking place; then an analysis of some of the mitigation options that would make some sense in Canada; and finally, there was a presentation on the economic dimensions of the climate change issue, both the probable costs of allowing climate change to proceed and the costs of various mitigation measures.

• 0915

There's a briefing book. I'm very sorry the committee does not yet have this, but I will make sure that in the next day you receive copies of the briefing book that accompanied the presentations, which is available in both official languages.

In each city, some 80 to 100 people participated in the workshops and briefings. They were mostly middle-level company executives; representatives of various public interest groups, including some environmental groups, transportation groups, energy groups, and so on; some academics; and a few people from environmental non-governmental organizations.

Media coverage was quite extensive, especially in Calgary and Montreal, and to a lesser extent in Vancouver and Toronto, but there was media coverage there too. In Toronto yesterday, we had several senior reporters from the newspapers there who were planning to do in-depth articles, not news articles, about this issue.

Evaluation forms were distributed to get some reaction from the people who attended. These indicated, first of all, that the briefings were extremely well received, and secondly, that the participants would very much like to have further discussions and briefings on actions that Canada might want to take post-Kyoto. This could be a very important part of the mobilization of a consensus view on what actions we might want to take after the Kyoto conference.

I should say also that each workshop finished up with a session of very strongly mixed views on the issue of what we as a country should be doing in Kyoto and what we should be doing post-Kyoto, after the conference of parties meets there to consider what next steps to take under the Framework Convention on Climate Change.

The panel in Toronto, for example, included representatives of Imperial Oil, the insurance industry, and an environmental non-governmental organization. In Vancouver it included a representative of the Fraser Institute and Jim Fulton from an environmental agency, which caused lots of sparks out there. So these panels, at the end of the day, gave an opportunity to hear the full range of views on this issue.

One of the things we found through the course of the briefings—and I should say the final one will be in Halifax tomorrow—was that there are a number of misunderstandings or myths or misconceptions about some rather fundamental issues related to climate change. After the first few of these, we worked together to try to produce a short statement on what we thought were some of the myths and misconceptions that have arisen.

• 0920

And it's not surprising that these have arisen, with the number of full-page newspaper ads giving conflicting views on a number of issues. The newspaper, TV and radio commentators that we've heard and the interviews that we've heard give differing views on a number of issues. There is indeed some confusion among even the relatively informed public who came out to these briefings.

So we thought it would be helpful to try to put down as clearly as we could the understanding that has emerged from the science and the economics about those issues for which there are some misunderstandings.

I have given to your staff a copy of that addition to the briefing book that is being inserted for the last couple of days.

One of your members was at the Toronto meeting, Mr. Herron. He might be able to give you a bit more of the flavour of how those meetings went.

Let me first of all review very briefly what we've called the misconceptions or misinterpretations that we found in many parts of the country on some of the key issues.

First, there has been a lot of confusion about observed temperature trends. There have been editorials and other reports that since in the very high atmosphere, above the clouds at the very upper layer, there has been cooling, that negates the climate change theory. In fact, what the climate change theory and the models suggest is that in the very high atmosphere, well above the clouds, there will be cooling due to the green house gas forcing of climate. In the middle layers of the atmosphere, what we call the mid-troposphere, about perhaps 10,000 to 20,000 feet up, there should be a modest warming. Near the surface there should be a significant warming. In fact, in general that's what we've found.

So a cooling in the upper atmosphere in fact lends support to the climate change theory, rather than negating it.

There has been a big controversy over the satellite measurements of the middle layers of the atmosphere, which I think has caused some misunderstandings. The satellite record is an 18-year record, and 18 years is a very short time in climatic terms in which to evaluate a trend.

Indeed, if you take the raw data from the satellites, it does look as if there has been a slight cooling over that 18-year period since satellites first began trying to use multi-spectral scanners from way up high, look down into the atmosphere and, after a bunch of corrections, give you some estimates of the temperature.

The problem with the short record is that at the beginning of the satellite record period we were in the warmest and longest El Niño event that we have had until the one this year. So it was a relatively warm period on earth. The latter part of the record was influenced from 1992 to 1994 by the temporary cooling induced by the Mount Pinatubo volcanic eruption, which put a lot of ash into the stratosphere and cooled the earth for a couple of years.

If you're going to interpret a very short record like that, most of the scientists will tell you that, before you start making conclusions about the trend, you've got to take into account what are the things that are likely to have perturbed that record that you know about. If you take into account the El Niño and the Mount Pinatubo eruptions, the slightly downward trend turns into a slightly upward trend for that period, if you take them out. We see a slightly upward trend in that middle layer of the atmosphere from the balloon-borne records that go up from the ground and measure the temperature aloft as they go up.

• 0925

It's now generally accepted in the scientific community that these two records are consistent if properly interpreted. Of course the temperature near the ground has indeed gone up much more, even over that 18-year period, than the temperature in the middle layers or the troposphere.

The second topic that came up frequently was how much can you trust the climate models on which a fair amount of reliance is placed on this issue. Some of the economists and econometricians especially questioned this because they say they have worked with the economic models. There are a lot of fudge factors and problems with econometric models and they often don't give you a result that proves to be true in later reflection. They say the global climate models are just the same.

However, there are major differences between the climate and econometric models. The climate models are based upon well-founded equations derived from the fundamental physical laws like Newton's laws that describe the atmospheric circulation and the energy exchanges in the atmosphere and between the earth, the sun, and space. So these are basic physical laws that dictate the way the atmosphere behaves.

This is quite unlike econometric models of human and economic behaviour that are based upon observations of how people behaved in the past. That behaviour and the way the economy works are constantly changing. So you're on shifting sands with econometric models but you're on a solid foundation with the climate models.

In addition, the climate models have been used to see if they could simulate the past climate, and they've done extremely well. For example, once the volume of ash particles from the Mount Pinatubo eruption was known, the global climate models accurately predicted the temporary cooling effect we saw in the early 1990s.

A further concern was that if you just think of the greenhouse gases humans alone influence—carbon dioxide, methane, and a few others that are less important—then the rise in temperature we would expect would not be 2.5 degrees Celsius, with a doubled carbon dioxide, but would be less than half of that, at around one degree Celsius or 1.2 degrees Celsius.

You get an augmentation of that because the models and the theories say that as you start to warm the earth you get more evaporation and the atmosphere can hold more water vapour. Water vapour is a strong greenhouse gas, so you get additional water vapour augmenting the effects of the carbon dioxide and the methane.

Over the last 30 years we have seen, through observations over North America and other parts of the world, an increase in water vapour in the earth's atmosphere, which is consistent with what the models project and is indeed augmenting the effects of carbon dioxide, methane, and other greenhouse gases.

On the question of extreme events, there has been some confusion between various kinds of extreme climatic events. The question of tropical cyclones arose several times. It's clear from both the record of tropical cyclones in the past few decades and the model projections, which aren't very good for a relatively small phenomenon like tropical cyclones, that the tropical cyclones have not increased in frequency and intensity. The present models project that they will not increase in frequency and intensity. So I think that issue needed to be clarified.

• 0930

On the other hand, the damages caused by tropical cyclones are increasing because of rising sea level. They will continue to increase in the future. One of the big damaging factors from a tropical cyclone is the storm surge, which is the upwelling of the water that's driven by the wind in the pressure field. This causes a lot of the damage. That will go up as the sea level rises.

Other climatic events, like heavy rainfalls over North America and other parts of the world, and severe winter storms, have also shown signs of increasing as projected.

On the economic side, the report by the Conference Board of Canada has been a mixed blessing on this issue in a way. The report itself is an extremely good one. It summarizes the results of about 16 models of what the costs would be to Canada of returning emissions to 1990 levels by 2010, or having a reduction by 2010 of 5% or 10%.

The results of these models range from about minus 2.3% of the gross domestic product over a period when the GDP would rise by something between 30% and 38%, depending on whose projection you take. That's the most negative result. The most positive result is that you could achieve these emission reductions with significant net benefits to the economy through energy efficiency measures, new technologies, and so on.

The Conference Board, in its conclusions, makes it very clear that the results of the model output depend very much on the assumptions you put in at the beginning. Unfortunately, the models run by environmental groups tend to suggest that we can achieve quite a lot and have big benefits to the economy, while models supported by fossil fuel industry tend to show just the reverse. So the assumptions that drive those models are the really important thing to look at, which is what the Conference Board report says.

However, the Conference Board did take their most pessimistic result and put it in their summary at the front. It said that one possible outcome was that most pessimistic outcome. I suggested to them they should have said “another possible outcome” and then quote the most optimistic one, but they didn't do that.

I was particularly struck by the Ontario government's presentation yesterday, which accepted as gospel that we would in fact lose 2.5% or 2.3% of GDP through measures to reduce greenhouse gas emissions. They accept that as the basis for their policy, yet it's not on a sound basis. That's using the most negative assumptions and not a very wise set of measures to achieve the results. The way in which you try to achieve the results effects the outcome economically very much.

One of the interesting examples of that was given in Alberta by a representative of TransAlta. He showed that if we don't rush too much—if in other words, at the time of capital stock turnover, we encourage less greenhouse-gas-emitting technologies—then you could achieve a great deal and it would not cost much.

• 0935

For example, say natural gas prices in Alberta remain roughly as they are and coal-fired electricity generation plants were converted to gas. This would not be all tomorrow, for example, but as they either had to be replaced or significantly refurbished, you could get something like a 15% reduction in carbon dioxide emissions from electricity generation in Alberta by 2010. Also, you could get almost a 60% reduction by 2030.

So that's an example of the way in which the design of the policies—he said you could do that at essentially zero cost—has a profound effect on the way in which the costs are transferred to the economy.

That's the lesson we should be learning from the Conference Board's excellent but biased summary. None of the models reviewed by the Conference Board consider the benefits of reduced fossil fuel use either on local air pollution or as this contributes to reducing the rate of climate change. So these are simply analyses of the costs, not the benefits, to society of incurring whatever costs there might be, which could be pretty small if we do it wisely.

Mr. Chairman, those are my reflections on these cross-Canada briefings. I think your committee, sir, is going to be very important for how Canada will build a national consensus on how we move forward after whatever is decided at the Kyoto conference of the parties. Of course, there will need to be negotiations between the federal government, its officials and ministers, and the provinces. But I think there needs to be continued, improved, increased dialogue with the interested and influential public out there whom we have tried to reach—in general, we have been fairly successful in reaching them—in these cross-Canada briefings. With the kind of partnerships that have been developed between local or regional groups and the national global change program of the Royal Society, that's one mechanism we should use to try to develop that consensus in the post-Kyoto years.

Perhaps Mr. Herron will say a little bit about the Toronto briefing he attended. I don't know.

Mr. John Herron (Fundy—Royal, PC): If anything, I had a couple of questions that I wanted to ask on Doug Russell's presentation. He went a little bit over, so maybe we'll get to that later, but I'll give it back to the chair.

The Chairman: Thank you, Dr. Jim Bruce. We'll start then with Mr. Gilmour, followed by Mr. Bigras, and then Mr. Herron.

Mr. Bill Gilmour (Nanaimo—Alberni, Ref.): Thank you for appearing before us, Dr. Bruce. I enjoyed your presentation, particularly when you were saying about climate change theory that it is in fact a theory, yet many people are treating it as a fact. You pointed out that depending on who makes the model and where it comes from, there are significant differences in some of the conclusions.

Just before you gave your presentation, I was interested in what you were talking about concerning voluntary measures, because there are the two approaches: voluntary and regulatory. In my view, the government tends to dismiss the voluntary approach. My background is in the forest industry. I found that industry prefers the voluntary approach. Given that there's a target out there, they can meet the target. How they meet it is their own business. This is opposed to a regulatory approach, which says that you will be there by so and so.

I'd appreciate your comments on the successes or failures of the voluntary approach, how it has worked, and perhaps how it could be improved.

• 0940

Dr. Jim Bruce: I think the record suggests that at least so far the voluntary approach in Canada hasn't achieved as much as we would have liked. I think that's for two reasons. First, for some reason I don't quite understand, the government has been unwilling to say to industry, if you take early action we will recognize this; you will get credit for it when something more stringent is required. The government has not been willing to do this. In fact, the government in the United States has been willing to do that to its companies, so some of the companies that work in both countries are putting their efforts into the U.S., where they know they are going to get credit for it, rather than into Canada, which I think is a very sad state of affairs.

The other problem is that I think it is really necessary to set out a target there against which the progress in a voluntary program can be measured. If there's a target and some emissions trading system is set up so the costs would be kept low for the overall industrial community—the organizations that can reduce emissions most cheaply would be the ones that would do it in a trading system—then a trading system, some sort of a target or cap, and insurance that we give credit to early actions by industry would make that program much more vigorous.

Mr. Bill Gilmour: Thank you. I agree with what you were saying at the end there, that the consultation the government didn't do in fact is now coming to rest. Many of the interest groups, whether they be industry or environmental groups or the fellow who is driving his car to work, are players. We are all players in this debate and in the solutions.

We saw it this week, in fact, the provincial ministers meeting with their federal counterparts in Regina last Wednesday, and here we are, two to three weeks away from the Kyoto conference. There was some consensus, although I gather it is very tentative, on whether the provinces will buy in, particularly with what you are saying about the post-Kyoto decisions and where we're going after that.

I appreciate your comments about natural gas versus coal. It's not an easy fix, because if you happen to be in the coal industry you're going to take a hit. What other areas do you see, rather than a regulatory bash, easier ways in which to achieve the results, such as conversions like this?

Dr. Jim Bruce: Let me start back a step. The energy extraction industry can make big steps forward in reducing their energy consumption in actually getting out the oil and the coal and so on, and that would help,

But forget about that for a moment and look at the end uses of energy in Canada. The largest one, and the most rapidly growing one, is the transportation sector. In the Toronto workshop there was a good deal of discussion about what could be done in the transportation sector. The discussion ranged from could we, either through a voluntary program with the automobile industry or through going back to standards for fuel efficiency, not make use of the much improved technology which is there now, and coming down the road hybrid vehicles and fuel cells and so on, to reduce the fuel consumption of most of our automobiles and light trucks?

Another thing that got a lot of attention there was the possibility of reviving much more attention to rail transport of goods rather than trucking, which is much more heavily carbon-intensive than rail.

• 0945

There were a number of other discussions of reshaping, if you will, gradually over a period of time the way in which the urban area is developed so that you don't have to drive your car to the corner store to get a carton of milk; you can walk or bike over. The design of communities to reduce the dependence on the private automobile is another area that received considerable attention in the discussion.

So there are a number of ways in which we could try to reduce emissions from the transportation sector—which is the fastest growing—that I think are really worth considering very vigorously by the government.

Mr. Bill Gilmour: You're closer to this than most of us. Perhaps you could put on your crystal hat, or whatever.

Kyoto is coming up. Where do you see it going, particularly with the U.S. and the undeveloped countries? Do you see a fairly watered-down approach? In your view, what's the outcome?

Dr. Jim Bruce: I don't claim to be an expert in the negotiations, but Doug Russell, who was senior negotiator with Environment Canada for many years, is part of this travelling road show to the various cities. I tend to do the science and he does the negotiations. Then the local people talk about the impacts in their region and other aspects of the issue.

Doug Russell says he thinks, first of all, if a deal is made, the most likely deal would be to have the kind of target that Mr. Clinton has talked about and our prime minister has talked about; that is, a return of emissions to 1990 levels by 2010, or possibly a 5% reduction by 2010 or 2015, as the most likely consensus outcome for the developed countries. A few of the developing countries will probably make commitments for emission reductions; most of them will not at this stage, but some kind of mechanism may be put in place to get them on board at a little later stage. That's his view of the most likely deal.

But he also says we could emerge with no deal, especially if Canada and the United States push very hard on the developing countries to take up a commitment at this stage, which most of them are not yet ready to do. They say: You people in the industrialized world have caused most of the problem. You are still emitting more than 60% of the greenhouse gas emissions. You show us how you do it first, and and then we will come on board.

Mr. Bill Gilmour: Thank you, Dr. Bruce.

The Chairman: Mr. Bigras.

[Translation]

Mr. Bernard Bigras (Rosemont, BQ): First of all, I would like to thank you for sharing with us the discussions that took place at your meetings. Personally, I learned a great deal about this very important problem of climate change in a series of studies published by Environment Canada and entitled Canada Country Study: Climate Impacts and Adaptation, which you probably discussed at your meetings. If you did, I would like your comments on this Environment Canada series.

First of all, I would like, to stress the economic aspect of the matter. You tell us that the question was raised, among others by the Government of Ontario, which informed you of the possible impact in the very short term (2-3% reduction in provincial GDP). I would like to know if, at your meetings, you considered the question of the long-term impact of change on how we do things, based on non-polluting energy sources which, in the long term, could be cost effective too. That is my first question.

• 0950

[English]

Dr. Jim Bruce: Yes, thank you.

There were presentations by economists at each of the briefings. I wasn't at the Montreal one, so I'm not sure about there, but the economists I heard all made the point that is included in the statement by the 2,800 economists who signed the declaration a little while back, which said, in effect, that the costs of the kind of emission reduction we're talking about would be negligible or not very big in the short run. In the long run, there could be net economic benefits to North American economies for the very reasons you have cited. That view was certainly expressed, and it is very strongly held by the vast majority of economists who have studied the issue.

[Translation]

Mr. Bernard Bigras: My second question is, to employ your term, "post-Kyoto". You gave us two broad hints, one at the beginning and one at the end of your presentation, about measures to be taken to follow up the commitments made in Kyoto. Taking into account the discussions held in every region of the country, I would like to know if we should not, to truly reach the objectives to be fixed in Kyoto, make sure that all provinces are on board, either by provincial decree or agreement, guaranteeing that the provinces will make every effort to reach the objectives defined in Kyoto.

[English]

Dr. Jim Bruce: I'm not an expert in the federal-provincial relations on this issue, but I think about the way in which the European Union approached this question. They have made a pact, if you will, between the countries of the European Union—who surely can't be more different than are the provinces in Canada—in which a few of the countries are actually allowed to increase their emissions, while some of the larger countries like Germany and the United Kingdom reduce their emissions rather substantially. The net effect is to achieve a 10% to 15% reduction in emissions by 2010.

By looking at it as a whole European Union, they were able to recognize that some regions had to grow their emissions a bit but others were in a position to make significant cuts. So in net, they were able to show a significant reduction in emissions.

I don't know whether a deal of that kind can be developed with the provinces or not, but it seems to me to be an interesting model.

[Translation]

The Chairman: Mr. Charbonneau, please.

Mr. Yvon Charbonneau (Anjou—Rivière-des-Prairies, Lib.): Thank you, Mr. Bruce, for your contribution and the effort you have made to clarify a number of points under discussion.

Firstly, I have a question concerning the first part of your talk this morning, "Myths and Misinterpretations".

A number of oceanographers who were here let it be understood—or so it seems to me—that we knew almost nothing, generally speaking, about all these matters. Considering only the question of measuring temperature change in inhabited areas, or the data on the atmosphere, without consolidating or being able to consolidate the data provided by the oceanographers at this point. As everyone knows, the surface of the earth is 70% ocean. In short, what happens in the oceans is largely unknown, or the little that we do know is not consolidated with the data from measurements made on the surface of the earth or in the atmosphere.

• 0955

They placed a good deal of stress on the need to consolidate all these data before drawing up detailed strategies on measures to be taken, which of course does not preclude certain precautionary measures. We know very little about the global phenomenon. We have barely started to lift the veil of our ignorance.

Do you share this opinion on the need to consolidate all the data at this stage? You mentioned fairly interesting climate models, but do they include these data?

[English]

Dr. Jim Bruce: They take everything we know about into account. The models we use are models of both the atmosphere and the oceans. They take into account some of the natural forcing factors, and the forcing by greenhouse gases, which tends to warm the atmosphere, and the forcing by aerosols, particles in the air, which tend to cool the atmosphere. Some have even taken into account the slight cooling effect that was brought about by the thinning ozone layer due to the CFCs in the atmosphere. The models do take all of these things into account.

What's been happening in the last two decades is that as we observe the patterns of change geographically and compare them statistically with what the model said should have been happening with the kind of forcing we've seen already with greenhouse gases and aerosols, the correspondence is getting increasingly close. In addition, the global mean temperature is modelled extremely well by the models, and that global mean temperature is now getting to the point where it looks to be above the noise of the natural variation of the climate system. It's on the basis of those observations that the Intergovernmental Panel on Climate Change made a cautious statement, but they said that the balance of evidence now suggests we can see a human influence on the climate system.

The point is we are just beginning to see it. There is a long lag-time in the system and the oceans introduce that lag because it takes a long time to heat up the oceans. It will be perhaps two to three decades before the full effects of carbon dioxide emitted today are felt on the earth's climate, because it has to be moderated by the oceans. The question of whether we should act now or later is related to this. I think that this long lag-time and the fact that it takes quite a long time to turn around human systems and energy systems suggests to me that maybe it's not too early to act, it's maybe too late.

[Translation]

Mr. Yvon Charbonneau: Are the voluntary measures myths or the way to reach solutions?

[English]

Dr. Jim Bruce: No, I think that if the companies are given the appropriate credits and incentives to follow up, voluntary measures can work very well. I don't think they can be entirely voluntary. What's in it for a company to put significant investment in energy efficiency unless their fuel costs would drop off so rapidly that they could pay it off in a year or two? Companies look for the fast return and they need some kind of help, some incentives from the government, and certainly some kind of credit for early action if we're going to see the voluntary program really work.

• 1000

[Translation]

The Chairman: Mr. Charbonneau. A very short question, please.

Mr. Yvon Charbonneau: Can you tell us if this question of transfer of credit, shortage of credit, that comes up from time to time in public debate has already been discussed in major international circles? Have other countries found this idea interesting? What is happening exactly? Some people say it is a myth, others a viable direction.

[English]

Dr. Jim Bruce: Yes, it's a very hot topic, especially in Washington and in some other parts of the world. Most of the economic studies suggest that if there are significant costs in emission reduction they can be reduced by about 50% by an emissions trading program, which tends to drive the emission reductions to those industries or those sectors where the emission reductions are cheapest to achieve, rather than forcing everybody to make the same 5% reduction.

The Chairman: Mr. Herron, followed by Madam Kraft Sloan.

Mr. John Herron: I have a couple of comments and a couple of questions stemming from yesterday's different presentations.

One is something I'm starting to believe more and more, and that is that I think we almost have this preoccupation or fixation with respect to the target itself, which has almost derailed the actual debate in terms of versus the getting-the-job-done aspect of it. Is it your opinion that these plans in terms of what we should do in 2010, 2015, and 2020 are borderline, almost irrelevant, considering, as you said, that what we'll know in a few years in terms of the urgency of the matter, the science or the technology may actually change within a brief period of time? If you had your druthers, would you prefer to see more of a constructive approach to having more of a short-term target?

Dr. Jim Bruce: Yes. I think that's a good point. I think between now and 2010 a lot is going to happen, both in our knowledge of how the climate system is going to react to the increased emissions we will put on it and on the ways we can reduce emissions cost-effectively. First of all, let me say I think you need a target of some kind; otherwise there's nothing to measure against and there's nothing to try to achieve. I think you need some kind of a target out there.

Secondly, I don't think these targets should be carved in stone. I think we need to set a target but put in place some kind of mechanism whereby the targets can be revisited periodically so that we take advantage of knowledge as it develops. As we said in the IPCC report, the challenge is not to find the best solution today for the next hundred years; the challenge is to find an initial path that will get us in the right direction and modify that path as our knowledge increases. I think we need targets, but it would be nicer if they were shorter term. Even for 2010 we probably need a target, but we should be careful to put in place some kind of mechanism to review those targets as more knowledge comes on.

Mr. John Herron: I think it's going to be more constructive for us to actually change the debate from targets to getting the job done, in terms of how we are going to implement any kind of plan we want to do with respect to meeting our emissions.

Could you help me with the definition of legally binding targets? Who's going to jail?

• 1005

Dr. Jim Bruce: When people say “legally binding targets” in this context, I think they mean a stronger commitment than was made in the first framework convention, which was simply to report on “measures taken and aiming towards”. When people say “legally binding”, they mean that countries would commit themselves and would say they are going to achieve so much by the year 2010.

As far as penalties are concerned if that doesn't occur, there has been no discussion of trade sanctions or anything of that sort. On the other hand, there can be informal trade pressures brought on countries that don't live up to those commitments, as we've seen in the timber and forest industry. Environmental groups can bring trade pressures even though these are not formally introduced by governments. If Canada ends up being the only country of the industrialized countries that doesn't make a commitment, then I think we could be subject to such informal kinds of trade barriers.

Mr. John Herron: Lastly, is there the will within the developing countries to participate in some form of joint implementation program or emissions trading program? I noticed that during Doug Russell's presentation he said that's the place where the deal can actually not get done. The Americans are very clear in terms of their role and are interested in having developing countries participate. In the language that we use, though, we seem to govern—and I like this term—our policy by press release in terms of appropriate participation by developing nations. Can you touch on that a little bit? I know it was brought up earlier.

Dr. Jim Bruce: Well, the idea of joint implementation has both strong proponents among developing countries and strong opponents. The proponents include countries like Costa Rica and Argentina and so on, which see that they could be assisted by funding from companies in the developed world in order to achieve some of the modern technology introduction they would like to have. It would improve their economies and reduce their emissions.

There are other countries—India is one of these—that argue that if they give up the easy things to do under joint implementation with an industrialized country, when it comes their turn to reduce emissions domestically they will then have only the hard things left to do.

So there is a very mixed feeling among developing countries. I think the key to some success in Kyoto will be to try to ensure that the developing countries don't remain an entirely cohesive block, but do break out into their logical groupings. The ones who do want to move forward vigorously can then do so, and those who don't want to can be put on hold for another few years.

The Chairman: Add to that the fact that in Berlin, at the last conference, developing countries such as the Phillipines, China, and India—that's what triggered my recollection—made frequent and forceful interventions in regard to the fact that they should first be let to reduce poverty, and then they'll talk about reduction of greenhouse gases. They linked the two as if this was their own deeply believed theology.

Madame Kraft Sloan.

Mrs. Karen Kraft Sloan (York North, Lib.): Thank you.

I also feel that if we have shorter-term targets, not only will it help us achieve them—or it will help us measure where we're going a little more effectively and give us a bit more control—but we can start thinking of short-term innovations that will lead to small successes that we can build on. This is what's very important in anything people try to undertake.

I have two questions for you. First, to the best of your knowledge, do you know what has already been done within government or within the private sector to prepare us for post-Kyoto?

• 1010

Dr. Jim Bruce: I don't know about everything that's going on. I do know that in many municipalities there have been very vigorous actions. We heard about some of them the other day.

SOREMA, the big reinsurance company, has offered to put up insurance in advance to companies who want to implement a retrofit of their buildings. The insurance policy guarantees that the reduced fuel costs over a three- to five-year period will cover the cost of the retrofit of the buildings. So the insurance industry, which has been hit very hard with climate-related disaster losses, sees a way of helping to move these energy efficiency measures forward.

There are examples like that you can cite, and a lot of them occur in municipalities. Unfortunately, at the intergovernmental level the argument has mostly focused on whether we should be doing something and not on how we should do it. I think we have to move very quickly now to getting some consensus on how we should do it. We do have, of course, a very good shopping list of things to choose from. We just need to make the decision that we're going to follow some of those quite vigorously in the early post-Kyoto period.

Mrs. Karen Kraft Sloan: I think it's important that we have a strategy that is based on six months, one year, three years or five years. Again, if you have short-term targets you can match the action with the reaction and the response there.

In a post-Kyoto consultation, who do you feel should be involved in a consultation or in an effort to move towards implementation? Do you have some specific names or organizations?

Dr. Jim Bruce: At the governmental level part of our problem has been that we have had energy ministers here and environment ministers there, sort of, and never the twain shall meet. It seems to me that we have to bring in more of the people with the levers and more of the stakeholders to those discussions, people like the ministers concerned with finance and with industrial development especially, with renewable energy technologies and conservation technologies.

There was an estimate in The Economist a little while ago of the size of the European market in energy efficiency technologies and renewable energy technologies likely until the year 2010. The estimate was about $300 billion U.S. We ought to be getting a piece of that, but we're not. We are hardly players in that game.

Mrs. Karen Kraft Sloan: And the $900 billion market in environmental technology by the year 2000. That's what they're projecting.

Are there any specific actions you feel we could take to develop that record of short-term success?

Dr. Jim Bruce: As I say, if I were looking at it I would build on the successes in some of the municipalities across the country.

Mrs. Karen Kraft Sloan: Okay. Like the 20% clubs and that sort of thing?

Dr. Jim Bruce: Yes. I think the 20% club has done an extremely good job of demonstrating a number of technologies that really work and that have already paid off in the cities in the cases I've heard about.

Mrs. Karen Kraft Sloan: I've been working with an organization in Ontario for a national green communities program, which would help with the residential retrofit market. Are these the kinds of things you would see as being useful?

Dr. Jim Bruce: Very much so. Also, it's a little strange to have the debate at the governmental level only between the federal and provincial government.

Mrs. Karen Kraft Sloan: Yes.

Dr. Jim Bruce: The municipalities hold an awful lot of the levers of change that are needed to address this issue.

Mrs. Karen Kraft Sloan: Yes. It's all local.

The Chairman: Mr. Pratt, followed by the chair, and then we can have a quick second round.

Mr. David Pratt (Nepean—Carleton, Lib.): Thank you, Mr. Chair.

• 1015

As a former board member of the Federation of Canadian Municipalities, I'm very pleased to hear your comments about the role of municipalities. I too think they're extremely important in terms of addressing the problem.

My question goes to the issue of the assumptions being used in other parts of the world. I'm thinking primarily of the United States and Europe in terms of the economic effects of stabilization or reduction by 5% or 10%. Do you know what types of assumptions the Americans are operating under, and the Europeans as well, in terms of the effect those reductions are going to have on GDP?

Dr. Jim Bruce: The Europeans are a little different. For example, the German parliament held big inquiries on likely costs. I saw some of the studies there that were generally accepted. They found that through energy efficiency and fuel-switching measures—and they're very strong on wind power now in Germany—they could reduce emissions by about 45% by 2020. Of that, 30% was cost-effective. In other words, the initial costs would be offset by reduced fuel costs and reduced health costs in local air pollution. The interesting thing there was that they thought also it would create half a million net jobs.

So the German government has accepted that kind of an analysis, done very thoroughly for a parliamentary inquiry, as a lot of the basis for their policies.

In the United States I think they've been influenced quite a lot by the statement by economists—2,500 in the U.S. plus 300 in Canada and six or eight Nobel prize winners—who reviewed this issue and concluded that the impact on the U.S. economy would be in effect negligible. I think this is the basis upon which the administration is moving forward. I don't think that kind of analysis is entirely accepted by many people in the Congress and the Senate.

Mr. David Pratt: Would it be safe to say, then, that some of the doomsayers we have in Canada, including the sky-is-falling approach from the Conference Board, are in many respects off base?

Dr. Jim Bruce: As I said about the Conference Board, I think their report is a very good one and a very sound one if you read the whole report. What they have selected for their summary at the beginning is the most pessimistic outlook. So if you get past the summary, it's a very useful report.

I think there may be exaggerations on both sides of this issue. I think independent economic studies would indicate that economically the sky won't fall, and over the next few years, while we probably will see more natural disasters, the climate sky isn't going to fall either.

The Chairman: Thank you.

I have a few questions. Will the information you've gathered in your travels through the country, and by the Royal Society as the overall organizing society, be made available to the climate change negotiators?

Dr. Jim Bruce: Some of the people actively involved in the negotiations, especially from Environment Canada, have been present at all of the sessions. So we're very much hopeful they will take it back. I think we are planning to produce a short report that will go to Environment Canada, NRCan and Foreign Affairs.

The Chairman: Did you notice an emerging consensus?

Dr. Jim Bruce: I think among the majority of people who came to the sessions there was consensus, but there were people, mostly from the fossil fuel industry, in each of the sessions who clearly are not yet part of the consensus. There were a few exceptions. The representative of the Canadian Association of Petroleum Producers was very forthright in the Calgary session about the need for action and that Canadians are smart enough to figure out how to move this forward without harming our economy.

• 1020

I would guess that there is an emerging consensus, but there are still some voices of dissent out there.

The Chairman: How much weight do you attribute to energy innovation?

Dr. Jim Bruce: I think that the first line of defence or attack, whichever, on this issue has to be energy conservation measures and fuel switching, where that's economically feasible, to less carbon-intensive fuels like natural gas or hydro or others.

The Chairman: Second line?

Dr. Jim Bruce: We have to think of economic instruments. Having seen regulations work very well in environmental issues, I personally wouldn't want to rule out the possibility of increased regulations for energy efficiency of appliances, energy efficiency of homes and maybe energy efficiency of automobiles.

[Translation]

Mr. Bernard Bigras: I would like to go back to a point raised by my colleague, Mr. Herron, concerning the objectives, from which I completely dissociate myself. It has always been clear to me that, with regard to management, in order to plan action and draw up a plan of action, objectives must be set. I would like to discuss with you the aims and objectives. Have you discussed, at your meetings, the Japanese proposition that takes into account a number of variables, including population and climate, with regard to setting the objective to be reached by the countries? This is my question.

The Chairman: Mr. Jim Bruce, please.

[English]

Dr. Jim Bruce: Yes, the Japanese proposal was discussed, which provides in a modest way for this differentiated responsibility, depending on population growth rates and other factors. I think there is a fair amount of support for that.

The difficulty is that if you read the countries' reports, they all have a bunch of reasons for not meeting the original goal of stabilization by the year 2000. Some people call them reasons.

We say it's because Canada is too cold a country and we need all that energy to heat us, and the Americans talk about how much air-conditioning they need in Texas. We talk about the long distances we have to travel, yet something like 92% of our automobile trips are taken within or around cities.

So there is a lot of argument about how you can achieve that differentiation. I don't know whether all that can be worked out in Kyoto or not.

[Translation]

The Chairman: Mr. Charbonneau, please.

Mr. Yvon Charbonneau: To your knowledge, have certain measures been implemented in certain countries following a summit and, if so, has this resulted in a certain mobilization or reorganization at government level?

When, for example, a government wishes to reduce its deficit over two or three years, that government takes steps, mobilizes key ministers and gives very detailed mandates. Do you have any examples of what certain countries may have drawn up in terms of reorganization of their systems for the implementation of these measures?

[English]

Dr. Jim Bruce: I certainly know of a number of countries that have implemented measures. I don't know of any that have had a big reorganization of their government to achieve these.

On the kinds of measures that have been done, I cite Germany again. They have recently signed an agreement with their automobile manufacturers to ensure that—I think it's by 2005—they meet a fuel efficiency standard of 5 litres per 100 kilometres for all the automobiles Mercedes and BMW produce, or the new fleet average. In Canada that is still about 9.5 litres per 100 kilometres from the Big Three.

• 1025

So we have a long way to go to catch up to the Japanese and the Germans on this matter. I think if we do not move fairly quickly we are going to lose international market in the automobile business.

The Chairman: Mr. Gilmour.

Mr. Bill Gilmour: Perhaps you could comment on the emissions trading. For example, Alberta takes a bit of a hit when it produces natural gas. However, they sell it to the States, who burn it instead of coal. There is a net global gain.

You can take that right down to the individual, I suppose, where a fellow who drives 100 miles to work might have to trade with the little old lady across the street who drives only once a week.

I see a rather large global bureaucracy growing out of this, and I have some difficulty with this. It's a nice concept, but how do you make it actually work?

Dr. Jim Bruce: An international emissions trading arrangement has not yet been tried. It's a concept the economists are writing about, talking about, how to do, but it has not been tried.

It has been used within a region, for example with emissions trading for sulphur dioxide emissions in the states of the Ohio Valley. They originally thought the permits per unit of emission would cost about $600. They are now selling for about $60. They have been able to achieve these emission reductions at a very much lower cost than they originally anticipated. That is partly because of the emissions trading arrangement, but it is also partly because the technology has been driven to improve a lot by that kind of emissions trading concept.

You are right. The way of achieving this internationally is not very obvious. Probably there will be some pressure from the United States to have emissions trading in North America, and I think that could be a good thing for Canada if we play it right.

The Chairman: Mr. Herron.

Mr. John Herron: We have emissions trading in B.C. and Ontario, on a micro-scale.

Dr. Jim Bruce: Yes.

Mr. John Herron: I'm going to try to squeeze this into one question.

If we had equitable incentives for developing alternative energy supplies as we have in other areas, such as the tar sands, would you think we could get a fair amount of bang for our buck in changing our culture from energy supply to energy services? Specifically with coal, how much of a bang would we get by moving away from coal to natural gas in the plants which are due for refits anyway now?

Dr. Jim Bruce: On the first point, I appeared before the natural resources committee, and Jeff Passmore, who may have appeared before you, had a very good discussion of the difference in tax treatment between the fossil fuel industry and the renewable energy industry, even with the adjustments that were made in the last couple of years. There is no doubt if these were made equal, or if we tried even to tilt it a bit in favour of renewable energy sources, it could achieve a great deal.

I'm sorry, what was the second part of your question?

Mr. John Herron: The second part of the question was the second question. Specifically with coal, during the refits....

Dr. Jim Bruce: Yes, absolutely; and as I perhaps said earlier, the analysis in Alberta was that you get very substantial reductions in emissions when you phase out coal-fired electricity generation and you move to natural gas—and of course they have natural gas to use.

We have to recognize, however, that there are a number of communities in Canada, mostly small communities, that are very dependent on coal mining. Any sensible Canadian policy has to recognize that and provide for some adjustment and alternative employment in those places that would be hard hit if a significant reduction in coal use were required.

• 1030

The Chairman: To conclude, before we go in camera, Madam Gagnon.

[Translation]

Mrs. Christiane Gagnon (Québec, BQ): I would like to ask your opinion of establishing a committee of experts who could analyze and evaluate all of the agreements to be taken in Kyoto.

[English]

Dr. Jim Bruce: Internationally, there are two bodies set up to do this. One is the subsidiary body on science and technology assessment of the Framework Convention on Climate Change, and the other is the Intergovernmental Panel on Climate Change. The Intergovernmental Panel on Climate Change has mostly academic scientists and some government scientists on it. The SBSTA is all government scientists. I don't think either of these entirely meets what you are thinking about, but they both could take on some of that.

[Translation]

Mrs. Christiane Gagnon: In Canada. It would be a committee that would have a role...

[English]

Dr. Jim Bruce: In Canada.

[Translation]

Mrs. Christiane Gagnon: ... a little bit like the Auditor General, who verifies all the measures taken by the Government or, perhaps, who would monitor agreements and promises made in Kyoto by the Government. It's all very well to say yes in Kyoto but, when we come back, how are we going to implement all that?

[English]

Dr. Jim Bruce: There would be some real merit in having such an expert committee. It could be established by the Royal Society of Canada as an independent committee. On the other hand, you have to recognize that the action has to be taken by the governments at three levels and by industry and individuals. So you need very broad consultations.

It's an interesting idea, because if a monitoring group were established that had some credibility, it could give periodic reports. I would not think the Auditor General's office is the appropriate one, because it looks primarily at whether the government carried out the processes in the right way and whether the procedures were appropriately followed. It doesn't look very much at whether those processes are the right ones to follow.

The Chairman: The commissioner of environment and sustainable development might do that.

Dr. Jim Bruce: He spoke yesterday at our session, and he takes a somewhat narrower view of his role than is suggested here.

[Translation]

The Chairman: Thank you, Mrs. Gagnon.

[English]

We have come to a conclusion. Thank you very much again for this very informative session. We hope to see you again.

Dr. Jim Bruce: Thank you for the opportunity.

[Proceedings continue in camera]