[Recorded by Electronic Apparatus]

Wednesday, December 6, 1995

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[Translation]

The Chair: Order. We will resume our work. Pursuant to Standing Order 108)2), we will continue to examine the topic of climate change.

[English]

Today we welcome Jim Bruce, the chair of the Canadian Climate Program Board, and Louise Comeau, the climate change coordinator from the Sierra Club of Canada. We welcome you and we're very grateful that you could find time for us.

A few colleagues will join us at any moment. I also invited interested members of the House who are not members of this committee. Because of the delay we should start right now and you can decide who should go first. Welcome.

Mr. Jim Bruce (Chair, Canadian Climate Program Board): Mr. Chairman, if you agree I will try to present, in 35 minutes or so, the outcome of the large-scale second assessment of the intergovernmental panel on climate change. There are 2,000 pages of text and I'll try to summarize. The 1995 report is much thicker and will be in three volumes with more than 2,000 pages. I will try to summarize it in the next few minutes, with the use of some overheads.

I'll be concentrating on the international perspective on the problem. I'm sure Louise Comeau will be able to bring to committee members some perspective on what that means for Canada. I will use a few graphs. I hope you can all see them from there.

This is a review of the environmental and economic perspectives on climate change, as seen by the intergovernmental panel on climate change. It was established in 1988 to provide fairly independent scientific advice about the science of climate change to the governments of the world and the conference of parties on the framework convention on climate change. The science now includes the social sciences. For the first time the report has focused on the economic and social dimensions of the problem, as well as the scientific dimension.

I want to remind you very briefly that the issue of climate change is one that involves very complex interactions among the atmosphere, the oceans, the land surfaces, and human activities in changing forests, for example, and in emitting substances to the atmosphere.

The heat energy from the sun drives the whole system, so the heat gain comes from the sun. The heat loss from the earth goes out into space and the naturally occurring gases, such as water vapour, carbon dioxide, and other greenhouse gases in the atmosphere, trap some of this heat that comes from the sun down near the earth's surface, which makes the earth liveable for humans.

Through human activities we've been increasing this natural greenhouse effect, causing a warming in the lower layers of the atmosphere. There has been more heat trapped down near the surface.

To show you how the change has occurred, this graph shows the trend in carbon dioxide concentrations from the year 900 to the present time. Actually, if you go back for about160,000 years, we've never had concentrations higher than about 280 parts per million of carbon dioxide in the earth's atmosphere.

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Beginning with the industrial revolution, human ingenuity has upset or changed that concentration very markedly and we now see the graph rising rapidly. There's about a 30% increase now over pre-industrial levels. The increase in carbon dioxide concentration parallels very closely the increase in the use of fossil fuels in the world.

There are a number of factors that affect the radiation balance, or the balance of heat exchanges at the earth's surface. Some of them warm the earth's climate, and some of them - the ones below the zero line here - tend to cool the earth's climate a little. The ones that warm the earth's climate are called the direct greenhouse gases. They include carbon dioxide, mainly from the burning of fossil fuels; methane from landfill sites, rice paddies, and a number of sources; nitrous oxide; and the halocarbons, the CFCs and the HCFCs used in refrigeration, which also tend to deplete the ozone layer.

Tropospheric ozone, the stuff in urban smog that has serious health effects, is also an effective greenhouse gas and has contributed to the warming effect. Since 1850 there has been a slight increase in the amount of energy coming in from the sun.

To offset that, there has been slight cooling due to the decline in the stratospheric ozone layer. That results in a small cooling down at the surface of the earth. But the largest cooling effect, offsetting in part the warming by the greenhouse gases, has been from what are called tropospheric ozones, or aerosols. These are tiny particles near the ground emitted mainly in the burning of fossil fuel, and mainly sulphate aerosols, which are the same things that cause acid rain.

So the substances causing acid rain also offset the greenhouse gases to some extent. This offset tends to be very localized in those areas of eastern North America, Europe, and eastern Asia where concentrations of sulphate aerosols are fairly high. They tend to be very short-lived. Some carbon dioxide and other greenhouse gases stay in the atmosphere for hundreds of years, whereas the aerosols are only there for a week or so. So you have to keep putting them in to have the slight cooling effect.

If we've seen that kind of increase in the greenhouse gases in the atmosphere, have we seen any change in the temperature around the world? This is a Canada-centred graph of the northern hemisphere done by the atmospheric environment service of Environment Canada, which shows the temperature trends from 1961 to 1990. There is a significant warming area in the central part of Canada and the northwest, with the yellow areas being a moderate amount of warming. In these other red areas over Europe, the rest of North America, and Asia you have some very high degrees of warming in some places and a lot of yellow areas as well. Notice also the cooling areas. The areas in blue are areas where we've actually seen cooling in the last three decades.

Overall we've seen warming, because this pattern gives us an average warming trend. But there is cooling south of Greenland, and this cooling in Baffin Straits is apparently associated with a larger number of icebergs drifting down from Greenland.

Try to remember this pattern as I show you the next slide, which is a projection using the climate model of what the future climate will likely be if we do not take action to reduce the amount of greenhouse gases in the atmosphere. This model from the Hadley Centre in the United Kingdom is one of the best models that links the atmosphere in the oceans and shows the full ocean circulation. You can see these areas that are red will be four to six degrees - or even more thansix degrees - warmer about 66 to 75 years from now if we have continued increase in greenhouse gases at about the present rate.

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The orange areas over the continents are about two to four degrees Celsius, and over the oceans it's a little bit less. You can see these cooler areas in parts of the world's oceans and this cooler area south of Greenland. There is still some speculation as to whether or not the cod stocks' failure to recover might be related to the cold water and the cold air that's been observed there in the last little while, which the models now predict are part of a change in ocean circulation associated with global warming.

As a result of the correspondence between what we've observed and what the models predict, the intergovernmental panel on climate change has concluded that we are beginning to see the human imprint, or the imprint of greenhouse gases on the climate. We are beginning to detect that climate change due to the greenhouse gases. They also say that in the decades to come the kind of warming we will experience will make the earth the warmest it has been in 10,000 years.

To give you the mean temperature increase over the globe, this shows the results oftwo different models. The MPI is the Max Planck Institute for Comparative Public and International Law in Germany, and the Hadley Centre is the one that created the graph I just showed you.

These models work by trying to simulate or reproduce the present climate, and they've reproduced the present climate here back to about 1850. If they introduce no greenhouse gases and no aerosols into the models, they get this line continuing out like this. In other words, you get climate fluctuations but you don't get any real change in climate. But if you introduce greenhouse gases into the models, you get an increase like this, and that will give us about a four degrees Celsius temperature increase by 2100. If you put in the aerosols and assume they will continue to increase - that is, we won't do anything to reduce the emission of sulphate aerosols - then you get about a 20% to 25% reduction in the rate of warming as long as we continue to pump out those aerosols that cause acid rain. If we cut off these aerosols in order to solve the acid rain problem, we go back to this line.

What impact is that likely to have? The IPCC says the impacts are probably going to be greatest in four areas. First, there are the unmanaged ecosystems - the coral reefs of the world and the boreal forests. And the boreal forests are, of course, extremely important to Canada.

This is one model output of what might happen to the boreal forests in Canada with a doubled carbon dioxide atmosphere, which will likely occur not long after the middle of the next century if we continue on our present ways. This vertically hatched area is the area now covered by the boreal forest, and this is the present-day situation. The future situation is depicted over here, where, as you can see, the boreal forest has been confined to some areas in northern Quebec and very northwestern Canada, with grasslands permeating right through the whole of the prairie region and temperate forests taking over from the boreal forests in some parts of the country.

Some studies have shown that the boreal forests are already declining rather rapidly in Canada, with one showing that forest fires and insect infestations have increased in the past twenty years or so, resulting in about a 20% loss of biomass already. That's one of the major impacts for Canada.

Health impacts are important. One of the health impacts would come from increased heat stress, or longer periods of time when temperatures are above a level that everybody can withstand. In periods when we have major heat waves in our big cities there tend to be increased admissions to hospitals for the sick and the elderly, and even deaths. This graph shows the change that would occur, say in Winnipeg, from our present climate, the number of days when the temperature is greater than 30 degrees Celsius now and in a doubled carbon dioxide climate. This is the one for London, Ontario.

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The other thing that happens during this kind of a period is that the ozone concentration tends to increase, and this can have adverse effects on human health as well.

The impact of sea level rise is a third of the impacts I'd like to mention as being particularly important. This graph shows the IPCC's three major projections for possible sea level rise accompanying the warming climate. Sea level will rise because of melting of the glaciers and because of expansion of the ocean waters. The dotted lines include aerosols and assume that we will continue to emit more aerosols in the future. The black lines assume that we will only emit aerosols at the level we were emitting them in 1990.

The lower projection here, which would give about a 23 centimetre sea level rise by the year 2100 - this is 1990 to 2100 - is based on the assumption that the population of the world, and therefore the greenhouse gas emissions, would be quite low. In fact it assumes a population increase between 1990 and 2100 of only 10%. This is an increasingly unlikely assumption. This mid-range projection is probably much more likely than this low-range projection. The mid-range projection is for about a half a metre rise in sea level and the high-range projection is for almost a metre rise in sea level. A half-metre rise in sea level would increase the number of people in coastal areas and on small islands subject to flooding in coastal areas from 46 million people now to 92 million people.

The other concern is the question of natural disasters. This is an area in which there's still a great deal of controversy in the scientific community. These diagrams - and I'll particularly focus your attention on this one, the significant damage - show the reasons why major disasters around the world have occurred. Significant damage is defined as only for disasters that have caused more than 1% of the gross domestic product of the country to be lost in the one event. In this case, for the thirty-year period from 1963 to 1992, we find that floods, tropical storms, and drought are by far the largest causes of significant damages and losses from natural disasters, much greater than earthquakes. Of course all three are climate-related.

The other thing we find is that the rate of loss has increased rather rapidly. There has been about three times as rapid an increase in the number of significant disasters from floods, tropical storms, and droughts as from earthquakes. There's a big argument as to whether that difference between the number of earthquake significant disasters and the number due to climatic effect is due to increased exposure of risk to the disasters, with more increase in exposure for climatic disasters than for earthquakes. But it seems hard to believe that whole difference is due to that difference in increase in exposure.

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The insurance companies certainly believe that natural disaster losses have been increasing rapidly and they attribute a fair amount of that to climate change. This shows, from the economists, that in the years 1980 to 1984 their annual losses were less than $2 billion globally and in the years 1990 to 1994 they're almost $11 billion globally. That is only the insured losses. The total losses are about five times that.

What the insurance companies have done as a result of this is withdrawn support from the southwest Pacific islands for reinsurance, and for the Caribbean they've raised the rates so that people can hardly afford insurance any more. Even though there's still argument in the scientific community as to whether this is in fact a manifestation of global warming, the impact is already being felt by those communities because the insurance companies certainly believe that it is.

Where do the carbon emissions come from that are causing these problems? This graph shows a number of countries along the bottom. I hope you can read that. The width of the bar is a measure of the population. For example, China is a very populous country, so it has a wide bar. Australia has a very narrow bar. Canada has a very narrow bar because of our small population. Then up here you have the number of tonnes of carbon dioxide per person per year being emitted by these countries.

You can see that the U.S., Canada, and Australia are the world's leaders in carbon dioxide emissions per capita. It shows that we emit almost twice as much as do Japan and Europe, other well-developed industrially developed countries, which suggests that we have much to learn from some of these other countries about efficiency in energy use. Then of course our emissions are far higher than those of the developing countries of the world, like India and Africa and China and so on.

This raises issues of equity. Most of the emissions per capita are coming from the developed world and the next graph suggests that most of the damages or the greatest damages per unit of gross domestic product will occur in the developing countries. These are just some estimates of the about 1.3% to 1.6% GDP, global domestic product, that will be lost if the double carbon dioxide were imposed on the present economy of the OECD countries. For the developing countries, the amounts go up as high as 8.6% and 8.7% for Africa. So the economic loss could be very much greater in the developing countries of the world. That's something about the losses.

What will be the costs of trying to deal with the problem of trying to achieve emission reductions? This is a schematic that shows some alternative views on the cost of emission reduction. The costs go up from zero here and down from zero there, so that these are negative costs or in fact benefits. The amount of emission reduction is over in here.

The first line is developed by using macroeconomic models that assume there are no reducible market imperfections; that is, that the market works perfectly to introduce energy efficiency measures or fossil fuel switching or whatever. The modellers impose a carbon tax or a permit system to charge in order to reduce emissions. The costs to a country become fairly large, several percent of GDP, from that perception as emission reductions increase.

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Other analysts say hold on a minute, there are a lot of market imperfections; there are many things that prevent the use of energy efficiency measures, that prevent the use of fuel switching and so on. If you take those into account, you can achieve at negative cost or at no cost a number of energy efficiency improvements, which are estimated by IPCC to be now about 20% for most developed countries and could be increased in the future to as much as 50%.

Curve C says that if you take the money generated in curve A by imposing a carbon tax, permits, or something like that and put it back into the economy by removing more distortionary taxes - that is, don't just gather in the revenue from a carbon tax but use it to displace more distortionary taxes and to increase investment in the nation's economy - then you can actually get a positive effect on the economy. That's called an economic double dividend in the IPCC report.

Finally, there are environmental double dividends; that is, if you reduce dependency on fossil fuels, you also reduce a large number of other contaminants to the atmosphere. These environmental double dividends are estimated in many studies in Europe and North America to be between 30% and 100% of the total cost of emission reductions.

So you have these energy efficiency measures, the possibility of economic double dividends, and the environmental double dividends, all of which can move you quite a long way over on this emission reduction line at no cost or even with some small benefits.

This shows you the environmental double dividends for Canada. This is the percentage of various contaminants from energy production, not counting carbon dioxide, as a percentage of the total pollution. You can see that the aerosols we've been talking about and the sulphur oxides, which cause acid rain, have a major contribution from energy production. The nitrogen oxides and hydrocarbons, which are related to urban smog, are very largely from energy use. Lead and mercury, the toxic metals, are also significantly large from the use of fossil fuels. All of these could be significantly reduced if we changed the consumption of fossil fuels.

If you look at what working group two of IPCC says about the transportation sector, for example, as another measure of the kind of thing that can be achieved, they say that with present technology you can get a greenhouse gas emission reduction per unit of transport activity of 20% to 50% by 2025 without changing the size of vehicles or their performance, and if you're prepared to accept changes in size and performance, you can get 60% to 80% by 2025.

The working group three report talks about subsidies and says that a number of studies indicate that global emission reductions of 4% to 18% together with increases in real incomes are possible from phasing out fuel subsidies worldwide.

So we have energy efficiency measures.

There are also ways of sequestering or capturing more of the carbon dioxide in the atmosphere and in trees and in soil. So tree planting programs have been estimated to be possible, which would absorb between 15% and 30% of the annual carbon dioxide emissions from the industrial sector. However, that tree planting would have to be done primarily in the temperate and tropical forests because the boreal forests are going to be seriously at risk, and this is probably not a good investment for reforestation there.

The report says that actions are economically justified. The no-regrets measures - that is, the ones you can achieve by energy efficiency of 20% now and perhaps 50% in the coming decades - which save you money, are justified by definition. Non-climate benefits to society exceed their cost.

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Actions with costs equal to expected climate damage are economically justified and although a wide range of climate change impacts is possible, all studies indicate the expected outcome is net damage.

Finally, actions with costs greater than net damage can be justified on the grounds of risk aversion. We have to remember that some impacts, especially to small island and developing countries, could be catastrophic or irreversible.

The UN framework convention on climate change called on the developed countries of the world to aim to reduce their emissions to their 1990 levels by the year 2000. That's what many countries, including Canada, are attempting to achieve now. However, this is only the first phase, the first step envisaged by the framework convention on climate change. The ultimate goal is stabilization of greenhouse gas concentrations - and that's a much harder thing to do than stabilizing emissions - in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system.

As for the question of what dangerous human interference is, it's really a policy judgment that is up to countries. You would have to make some judgments as to whether the health effects I've talked about, the effects on coral reefs and boreal forests, and sea level rises and so on, are in fact dangerous anthropogenic interference. Governments will have to make that judgment. The IPCC can only provide some advice on what some of the effects might be.

Stabilization of concentration is going to require real intervention. The pre-industrial concentration of carbon dioxide was 280 parts per million. The current concentration is 360 parts per million. If we're going to try to stabilize between the present and about 2.5 times the carbon dioxide.... Remember that all of the impacts we've talked about are just for two times the carbon dioxide, and if we go up to 750 it's about 2.5 times the pre-industrial level. If we try to stabilize between these two ranges then we will eventually require a 50% reduction from current emissions. This means a very major change in the energy economy of the world and a change in a number of other things we do.

Given the uncertainties, we recommend an approach like an investor would take to the uncertainties of the stock market. We say that a portfolio of actions to limit climate change should be adopted by each country, and something like that has been adopted in the Canadian system.

First, phase out existing distorting policies, such as subsidies, tax breaks, and so on. Second, implement the cost-effective measures we talked about earlier on transportation and so on to reduce emissions. Then implement cost-effective measures to enhance sinks, using the tree-planting measures and so on. The fourth thing is the joint implementation with developing countries and with other countries of some of the best technologies that we know are available in Canada, for example, and in other developed countries.

This can yield major benefits because in many cases the application of those technologies is cheaper abroad than it is at home, so that's a very useful thing to promote.

Research on climate change remains an important activity to reduce the uncertainties and to determine the kinds of adaptation measures we're going to have to take anyway, because at the most optimistic we're going to see some significant climate change in the decades to come. Of course, research on mitigation technologies, on how to improve energy efficiency and on how to use renewable energies more cheaply, etc., is extremely important.

What happens if we do nothing? This graph describes three possible scenarios. This one, the IS92c, is a scenario that assumes only a 10% increase in population between now and the year 2000, so I think it's probably better ignored. The blue boxes are how much cumulative carbon dioxide emission has been made by industrial sources in the 150 or so years up to 1990, and you can see how much cumulative carbon dioxide has been emitted. It's the accumulation of carbon dioxide in the system that we have to worry about. If we go to the median projection for the future, without significant emission controls we will be omitting seven times that much in the coming century.

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Another way of looking at it is that 70% of these cumulative greenhouse gas emissions have occurred in the last 50 years. We will probably achieve the same amount again in the next 20 years without preventive measures.

Let me just summarize very briefly the major insights from the IPCC report. First of all, human impacts on climate are now detectable. Secondly, without major intervention the world will be warmer in the next century than at any time in the past 10,000 years. The major impacts would be on natural ecosystems, especially boreal forests and coral reefs, on human health with heat stress and spread of tropical diseases, and on sea level rise. For a rise of half a metre, the median projection shows an increase from 46 million to 92 million people subject to inundation and probably more severe natural disasters, such as storms, floods and droughts.

It's an issue that is characterized by severe inequality between countries in both the sources and the impacts, with most of the source being from developed countries and the largest effect of the impacts on developing countries. The implications are that we will have to reduce emissions by about 50% in the next few decades if we're going to achieve the goals of the framework convention on climate change.

The final point is that the cost of mitigation action need not be excessive. We've examined the various alternative benefit cycles that might be achieved if we are smart about the way the mitigation measures are put in place. We're suggesting that because of uncertainties we should adopt a portfolio approach, not put everything into one measure.

Without vigorous actions there will be huge increases in cumulative carbon dioxide emissions over the next century and very major, maybe even disastrous, climatic impacts.

Thank you, Mr. Chairman.

The Chairman: Thank you.

Mr. Lincoln (Lachine - Lac-Saint-Louis): Are there notes available?

Mr. Bruce: Yes. I only have a few copies, so I've given a copy to the chairman and I'm sure you can have copies made.

The Chairman: Ms Comeau, would you like to start, please?

Ms Louise Comeau (Climate Change Coordinator, Sierra Club of Canada): Thank you, Mr. Chairman. I will be brief; I will only speak for about ten minutes.

I am the campaign director for climate change at the Sierra Club of Canada. In that context I have to take science as guidance on a very important issue and I'm trying to bring it down to ground level and to develop programming and ideas around what might be and what should be Canada's response to this issue.

In that context I'm part of a network globally called the Climate Action Network. In Canada I've been working very seriously in the last several months to complete a study that we call the rational energy plan for Canada. I'll be talking to you about that for a few minutes and giving you a sense of the content of that.

I will leave you one copy of the full microeconomic analysis. The macroeconomic analysis is now being completed. I will be speaking very briefly from this package of materials here. I'll just briefly read the page that's here and then show you a couple of overheads and then perhaps we could have a few moments of discussion, if that's okay.

What we found with our study is that a targeted energy efficiency program can stabilize greenhouse gas emissions in Canada at 1990 levels by the year 2000. Such a program brings with it reduced emissions causing acid rain and smog and brings significant health benefits, reduces deficits, and creates jobs.

The rational energy plan included a mix of regulatory, voluntary, and economic instruments that drove higher efficiency standards in residential and commercial buildings, equipment, appliances and vehicles, and investments in renewable energy and co-generation, as well as a broad range of transportation initiatives aimed at getting people out of their cars and into public transit and rail, onto bicycles, and walking.

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The initiatives affecting energy consumption were analysed by Natural Resources Canada using the same computer models they use to run their own energy forecasts. Environment Canada helped with the non-energy measures. The support of both these departments in no way implies support for our program, but certainly their support for our project was very much appreciated. What we found was that the rational energy plan reduced greenhouse gas emissions in Canada by76.9 million tonnes by the year 2000, 3.3 million tonne lower than 1990 levels. This is the only program or plan that has been put forward by anyone that stabilizes emissions in Canada. By 2010 our greenhouse gas emissions were reduced by 176 million tonnes, or 6.5% below 1990 levels.

The use of economic instruments like a carbon charge are not necessary to stabilize greenhouse gas emissions in Canada. Only two economic instruments were used in our initial phase of the program: a 2¢ gasoline tax in 1996, and a ``feebate'' under which the purchase of inefficient vehicles was taxed and the purchase of efficient vehicles was credited. The ``feebate'' program is revenue neutral; that is, credits are paid for by the revenues raised by the program.

A small carbon charge of $20 a tonne beginning in the year 2000, and $25 a tonne in the year 2005, did contribute to greenhouse gas reductions to 2010, but it was a very small contribution. Where the benefit came from, as Jim mentioned, was in redirection of the revenues. We'll talk about that in a moment.

At the moment, Informetrica is analysing our program from a macroeconomic point of view. They are instructed to recycle all revenues generated through the program into the economy to finance the program and to reduce payroll taxes. We should have those results soon, but according to initial results by Informetrica, which are in your package, our program is not inflationary, does not harm Canadian competitiveness, and creates jobs. According to Carl Sonnen, in using total employment as an indicator there is reason to believe that total employment might be increased by an average of 50,000 to 100,000 jobs per year over the next fifteen years.

In the course of our study, we wanted to look at the multiple benefits of action. I think if we're going to develop political will to move forward, we have to be able to articulate the multiple benefits of action. I've talked a bit about job creation and I've talked about greenhouse gas stabilization. Fossil fuels, however, also give you more bang per BTU than climate change.

Production and consumption of coal, oil, diesel fuel and natural gas are responsible for 45% of Canada's sulphur dioxide, which contributes to acid rain, 95% of nitrogen oxides, and 60% of volatile organic compounds that contribute to smog. As Jim mentioned, included in these emissions are particulates that contribute to asthma and bronchitis, as well as various toxics that cause cancer, particularly leukemia and nasal cancer.

What we found from our study were even greater reductions in these emissions than we got from the carbon dioxide emissions. It was not an expected outcome. According to Natural Resources Canada, we achieved a 24% reduction in sulphur dioxide emissions. Volatile organic compounds fell 13% and nitrogen oxide 16% from 1990 levels. And while not directly comparable, a study I was involved in on the task force for cleaner fuels in vehicles found that those initiatives that reduced sulphur were important in reducing these particulate emissions, and that such a program potentially could generate up to $24 billion in health benefits.

Our final multiple benefit in addition to stabilizing greenhouse gases, achieving the additional air benefits and job creation, is deficit reduction. Such a program looked at eliminating subsidies to the fossil fuel sector.

Part II of the estimates this year acknowledged $410 million going in during this fiscal year. While NRCan and the Climate Action Network continue to disagree on the tax breaks - I'll say there has been a range discussed of $2 million to $300 million from Natural Resources Canada, and up to $1 billion by groups like Climate Action Network - significant tax breaks are available to the fossil fuel sector in addition to the normal tax breaks available in the system.

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As well, significant government revenues at the federal, provincial, and municipal levels are spent each year on road-building. Transport Canada cited a figure to me not long about of about$4 billion a year. Our program calls for significant reductions in this spending, as well as shifting into alternative transportation modes.

I'll show you a couple of the overheads and explain what we're talking about, because this stuff tends to be fairly esoteric. People don't get right down to what we mean.

Because the existing building stock will be here for the next 30 to 50 years, Canada needs a major retrofit program of all its existing buildings, particularly in the commercial building sector, commercial and institutional buildings. Such a program that looks at renovating - that's adding energy-efficient windows, doors, lighting, insulation, and so on - alone generated $11 billion in savings to the commercial building sector. That's money in the private sector's hands for them to reinvest in their own business operations.

This kind of finding is consistent when you look at the climate change issue, when you look at efficiency, because what are you doing? You're reducing your operating costs. They're making an investment. That investment gives them significant returns. Those returns can then be reinvested in the economy in other ways.

So there is a significant need for a retrofit program within the building sector. That program would be a combination of regulatory, in terms of having higher building standards, and voluntary. You create market conditions that improve access to capital for people who want to do renovations. You get the banks involved, and so on. But it's a voluntary program.

We also need higher standards for appliances and equipment. The real reductions we got - and I'll show you the numbers in a moment - came from a look at the transportation and electricity sectors.

We need higher fuel efficiency standards for vehicles. You can't deny that. We generated26 million tonnes of reduction in carbon dioxide emissions by 2010 with this measure. As Jim said, the standard we're looking at would not reduce the size or the power of vehicles. These are achievable with existing technology.

We also wanted to establish a transportation options fund, a federal-provincial partnership if you will, where revenues are generated, where agreements are made to generate revenues and spending in public transit and transportation options. This is a particularly important area, not only for climate change but for local air quality.

We have some serious work to do from a policy point of view here, particularly with what's happening in provinces such as Ontario that are looking at weakening planning act requirements for more mixed-use, dense development. This is absolutely critical. Because of the way in which we design and build our cities, Canada has guaranteed no transportation options for Canadians except their cars. We must get a handle on this particular situation.

In addition, we assume significant reform of the utility sector in Canada, which is happening. We are very supportive of increased competition in the utilities sector. What we want is a competitive market, but we want energy utilities boards that are requiring environmental externalities to be considered in the purchase of electricity in the pool. That's not happening, and that's a significant concern, because as we move to more competitive markets with no consideration of environmental externalities coal is going to win every time and we are all going to lose. There is a significant need there.

What we assumed in our study was reform of the utility market with investments being made in both energy efficiency - particularly co-generation, which is a technology that captures waste heat and redirects that for use as steam or electricity for heating water and air, and so on - and significant investment in renewable energy in the utilities sector.

In the utilities sector, electricity is the door to renewable energy. It is a very powerful door in which we need to invest in order to develop our capacity in Canada in the long term.

As I mentioned, we talked about the deficit reduction opportunities in terms of redirecting subsidies and about the need in the long term. If you're going to get into reductions such as 50%, then you must look at issues of proper energy pricing, full-cost energy pricing. The impact on the environment is not zero.

As well, we looked at non-energy measures such as capturing methane from landfill sites and capturing methane leakage from upstream oil and gas development.

Such a program generated 176 million tonnes of benefit, and the big bang is transportation, at61 million tonnes. In the electricity sector - and these are the conversion requirements - it is34 million tonnes. You don't really see how it works here on the chart, but this is the electricity sector, and then the transportation sector. The smaller gains, of course - important gains - you see in the residential, commercial, and industrial sectors.

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It is the view of the Climate Action Network, and this has been reinforced to me over and over again, that the argument we get from a policy point of view around climate change is it's not in Canada's interest. The reality is that the inaction on this issue is in fact not in Canada's interest. We are denying the Canadian economy opportunities to become more competitive, more productive, and to take its place in the new economy. We are depriving our economy and our workers of opportunities in that economy by taking the approach we are taking, thinking that we are protecting our interest. There are some changes that have to be made, but what we find over and over again is that they are to the long-term benefit of Canada.

This shows you how we did stabilize. As I mentioned, it's the only package on the table that does that, and this is where you get into the reductions and where they came from.

This is just one assessment that was done by Informetrica. I'll show it to you in graph form. It showed basically that movement, change, policy initiatives to address climate change will not hurt the Canadian economy. This was not the final assessment for our study, but for a previous one that was done that did not stabilize but came close to it. I think our results will be significantly similar.

There's a slight positive impact, and in fact it is other issues - interest rate issues, deficit issues - that have a bigger impact on the economy. The economic Armageddon argument is a myth, and we need to fight that myth-making.

This is what they showed, in fact. These are the GDP projections, with and without greenhouse gas actions, and you can see there's a slight positive improvement there.

What is the impact regionally? This shows a slight positive impact for Canada, and this is an exaggerated chart. The reduction in GDP, even for a province like Alberta, is less; it's basically perhaps a 0.5% reduction from projected GDP growth by 2020. This is noise, this is absolutely noise, and I again speak to the issue of Armaggedon economic myth-making.

This chart shows, on a different scale, the impact on Saskatchewan and Alberta. As you can see, it's quite modest; in fact what Informetrica found was that even in Alberta, with its energy-intensive economy, any effort they make to improve their energy efficiency makes them more productive and more competitive. They reduce their own energy consumption and generate a dollar savings for their own operations and their own economy.

Mr. Lincoln: Louise, would you explain this graph in a little bit more detail?

Ms Comeau: If I can. Essentially these are Informetrica's economic projections out to 2010. Its author has made projections on GDP growth, given certain assumptions - you all know how these models work - around population growth, economic activity and so on, out to the period 2010. Then he has rolled in our package of measures and let that filter through the economy. He has a full economy model, allows that to filter through the economy and lets that generate projected GDP growth to 2010. All he found was this very, very slight change, and of course the results -

Mr. Lincoln: Which one is the bar with growth?

Ms Comeau: The base case is the dotted one, and the solid bar is what they call ``scenario 5'', which is the package prior to the one I've just completed, which was undertaken by the climate change task group that federal and provincial governments were involved in. I don't have the final results for our study yet.

At Informetrica, his view is that the results will be similar. What he finds consistently with these programs as he runs them through the models is that when you generate investments in energy efficiency you generate dollar savings to that company.

The other factor that's interesting here, which could significantly change this, is the assumption - and this is more for technical computer reasons and not as a policy point of view, and committee members may want to think about it, because I don't think it reflects reality - that this increased capacity would not be used for exports.

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I don't personally believe that will be the case for natural gas in the short-term. I think the demand for natural gas - which will increase Canadian emissions - will continue to be strong. It is seen as a transitional fuel, and has a role of being used in energy-efficient end uses.

There are some issues here that may even make this result look even less critical, if you will. Have I made myself clear at all?

Mr. Lincoln: What you're saying, if I understood you right, is that the bars in each of these charts show that the impact on the domestic product will be almost nil by adopting your package.

Ms Comeau: That's right.

Mr. Lincoln: But it doesn't show that the GDP will be improved, necessarily.

Ms Comeau: I don't have my final results yet, but the result for scenario 5 was a 0.3% positive improvement in GDP for the overall Canadian economy. That's what this chart shows. This is the slight benefit here, and it showed there was a net gain in job creation as well - I think it was 50,000 jobs per year. Our package is more aggressive, so it did create more jobs, but of course you have to break it down by sector.

This is what this game is all about - it's about adjustment. It's about moving to a more sustainable economy, if you will. I'm not trying to be critical of certain sectors; I'm just saying this is a fact. I think the energy sector has to adjust to new market realities that are inevitable as a result of these reductions, and I want them to participate in the new energy economy.

You do see gains. Obviously urban transit, trucking, pulp and paper - these sectors gain at the expense, if you want to call it that, of these other sectors where there will be reduced demand for their product. But in the overall Canadian economy, the manufacturing sector, particularly the manufacturing sector - the goods and services sector - really gains. This is part of the adjustment we'll be making in terms of our economy.

In this sector, if you put in our assumptions around renewable energy supply.... This chart is not based on our assumptions. This is a previous version. I must reinforce the fact that it's not our study yet.

We should assume that the electrical power sector results would be quite different. This study found we wouldn't build all the power plants that we thought we were going to build, so it shows a fall in their projected growth, but our study sees a significant investment in renewable energy. I suspect you would see a different result. That's the kind of thing we're looking at.

By exploring and arguing for and articulating the multiple benefits we're going to develop the consensus societally.

The Chairman: All right, thank you. Who would like to go first? Mrs. Kraft Sloan.

Mrs. Kraft Sloan (York - Simcoe): I wanted to go back to the comments you made earlier around the reduction of 50% - I don't have the document right in front of me - to keep greenhouse gas emissions to between 350 and 750 parts per million. I was wondering about the time duration. How quickly do we have to move to a reduction of 50%?

My second question concerns our current consumption of the earth's biotic capacity to produce, in that right now we're currently using about 40% and in 40 years the population will double. Without any changes in consumption at all, which is highly unlikely, in 40 years we'll be consuming 80%. I am wondering what the interaction of what we consume on the earth and climate change might mean for ecosystem failure. Has there been any kind of study that integrates those two?

Mr. Bruce: Your first question - this was the little slide I put up -

Mrs. Kraft Sloan: Yes.

Mr. Bruce: If you want to achieve stabilization at 350 parts per million or at roughly present levels, you have to act tomorrow to begin achieving that 50% reduction in greenhouse gas emissions globally. If you're prepared to accept 750 parts per million or more as the target level for the global atmosphere, then you can afford to wait several decades before you begin trying to achieve the50% reduction.

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I would make the point - it is made in the IPCC report - that even if you're going to start achieving those kinds of reductions 20 or 30 years hence, you have to begin to give a signal now. The investment in major plant and equipment, as stock needs to be replaced, must be made in a more energy efficient way if we're going to get on a path toward a reduction in greenhouse gas emissions globally.

Mrs. Kraft Sloan: Just to clarify what you said, if you want to maintain it at current levels, do you have to get to 50% right away?

Mr. Bruce: You have to move toward 50% right away.

Mrs. Kraft Sloan: Okay, so if we start tomorrow to move toward 50%, when do we have to reach it?

Mr. Bruce: I don't think it's possible to say. But we have to move very quickly if we want to achieve something like our present concentration.

Mrs. Kraft Sloan: Okay.

Mr. Bruce: Your second question was concerning the changes in the consumption of the biological resources of the world and how that interacts.

It's not entirely well known. There have been intensive studies of some of the forest biomass interactions with climate, but not of the whole range of the biota and biomes on the earth. There are now some models being developed - one's called the image model - in the Netherlands that try to model that interaction between consumption of the biomass on earth or use of the biomass by man, and its interaction with climate.

The main factor, of course, has been the reduction since the middle of the last century, or even before, of the area covered by forest, which has had a significant impact, contributing about one-fifth to one-quarter of the increased carbon dioxide in the earth's atmosphere until now.

The Chairman: We'll come back.

[Translation]

Mr. Lavigne, please.

Mr. Lavigne ( Beauharnois - Salaberry): In your presentation, you talked about the costs that could lead to a change in our lifestyles. This is difficult to calculate. If we opted not to follow your scenario, could you calculate the cost of the damage to be repaired if we postponed going ahead with this process?

You did not refer to damages and health costs. In my opinion, some damage could be irreparable. I don't think that one day we'll be able to put ozone back into the atmosphere. Hence, some damage is irreparable. With your scenario, can you see a hundred years down the road? At one point, when will damage be irreversible?

[English]

Mr. Bruce: Yes. Estimates of the damage that would be done if we do nothing about climate change and just allow it to proceed, appear in our report. They tend to be, on a global basis, a few percent of gross domestic product per year - 1.5% to 2.5% roughly - but very much higher for developing countries than for the developed countries. The developing countries are not nearly as able to adapt to a climate change and are much more dependent on agriculture and resource economies than the developed countries are. So there are some estimates, and on the whole they tend to be higher than the estimates of the costs of taking action, provided you take action in a way that takes advantage of all the side benefits you can get.

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Mr. Lincoln: I'd like to ask Jim and Louise about transferring the knowledge into persuasion of the powers that be that something has to be done. To me, this is the biggest challenge we face. Your case is so clear. Those of us who are convinced of that will get more convinced, but the mind-boggling issue is that there are so many skeptics out there and the skeptics seem to outnumber the believers by hordes.

I'm flabbergasted myself as to how much resistance there is to the admission that if we don't move from fossil fuels to clean fuels, for instance, we're going to be in trouble. It seems so automatic in my mind, yet you face so many extremely well-informed and perhaps committed people who will fight this almost to the death in our country. I'm wondering how you change this mentality.

I know that in the United States their record is not better than ours when we look at the charts. Yet despite the Republican thrust and the Gingrich models and everything, it seems to me there's been more of a penetration there by the people who have translated what we're trying to do...translated the knowledge into a conviction among the masses or the people who run the systems by convincing them there's an economic benefit.

I am thinking of the energy foundation, Al Harvey and the Lawrence Berkeley Institute and Amory Lovins, and those people who have had a huge impact, certainly nation-wide to a degree, over utilities and over states, by bringing in energy-neutral legislation and this sort of thing - far more so than we have here. I wonder how we can gather our respective forces - scientific research, NGOs, and economic groups - to bring enough industrial players to have bearing on the powers that be, provincially and federally, to convince them there's money in this thing and they'd better move fast. They would do what Louise is doing now, but on a broader scale. I don't know how you reach from.... Okay, you work with NRCan right now and you use their models and so forth, but have you persuaded them to change from fossil fuel?

How do we do this? I don't know myself. I just find there's a wall.

Ms Comeau: That's the big question, obviously. I think there are several elements to it in terms of the answer.

I've just finished a three-month tour of Canada. I went to 20 different cities. I spoke to several thousand people about this issue. I think that's part of the answer, raising public awareness of the issue and making sure people have information.

What we're doing is using the latest scientific information to pull together presentations that focus on specific sectors. For example, the political dynamic in Canada has been that the fossil fuel industry has dominated the policy response. What's happening is there is no one acting on behalf of fishers, farmers, foresters, tourism operators, indigenous peoples, or anyone concerned about health. Their constituencies are not being represented in this issue. I think we have a huge political exercise that's absolutely imperative if we are going to achieve some political consensus.

So what we are doing in terms of the Climate Action Network is several-fold. One is that we are building capacity within our own network and within the movement itself to understand the issue, have the latest information on the science, the politics, the policy responses and so on, and we will continue that.

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The second thing we're doing is we're building a political constituency. I am now making presentations. I'm attending every conference I can get invited to. We are making sure that people in these sectors know their economic interests are not being protected and they will be significantly affected by this issue.

The third element is that we have to find.... And of course we're doing this in terms of the renewable sector, the energy efficiency sector and so on; we've built some capacity there. But I do believe you are not going to have any movement on this issue until we put our heads around finding a way to ensure that the fossil fuel sector makes their own money, that their economic future is secure as they make the transition from the old energy economy, from the carbon economy to the solar economy. That's the dynamic we're dealing with. These guys represent 10% of the global economy. We need their entrepreneurialism, we need their skills, we need their capital, we need their insightfulness, we need their manpower and their resources.

I think what we have to do is build up the political momentum where that proper signal is given to them. I really do believe that prior to 1990, when this issue wasn't well known and we hadn't had a convention and so on, I could accept certain things. In my view, since 1990 we have had150 countries sign the convention, and Canada is one of the worst. NRCan spends most of its time exploring new fossil fuel opportunities all over the world. There's $50 billion to $100 billion going to new fossil fuel projects in the developing countries alone.

This is a crime against humanity. We need a ban, a complete ban, on new fossil fuel development. That's the signal the sector needs. If you sit down and talk to Sunoco or any of these individual companies, they say they know the change is coming, but you're not serious yet. They don't want to go too early and they don't want to go too late, but when this issue begins to affect the profitability of their operations and the security of their shareholders, they will move.

So we need the proper political signal, and I think the convention is a mechanism for that. Negotiations that are leading to a protocol in 1997 in Japan are part of that process. In order to get the right political signal to bring this industry on side to participate in this change, because I think we need them, global reform of the energy system is a massive undertaking. But the concern I have is that every new fossil fuel development, every new coal plant, is a thirty-year loss because they want their return on capital. While I think that's a reasonable expectation on old capital, new investments are unacceptable.

So I think we need that signal. We need to bring this industry on side. I think part of doing that will be the increasing strength of the science. But we have to build a political constituency. I was told just recently by the Canadian Electrical Association that until this issue shows up in our polling we're not doing a thing. So we need a massive program. I think politically my approach around multiple benefits is absolutely key; in order to do this, that's what we need to make happen.

Mr. Bruce: I have two or three comments to make. The first one is that the intergovernmental panel on climate change represents the work of about 500 scientists from around the world in writing the report, and about 5,000 scientists in reviewing the report and providing comments that are incorporated in the report. So it is far and away the best and most reliable consensus on the science.

There will always be a few dissenters, and some of them of course are aided and abetted by people who don't want to see anything happening. However, basically I think we simply have to hang in there and make it very clear that this is indeed the most reliable scientific assessment we can possibly get. It's a very elaborate process, which yields a very strong consensus among the scientific community, with just a few outliers. The trouble is that the media loves to cover those outliers, and, as I say, they are being promoted by some of the people who don't want to see change.

I'm somewhat encouraged, however, about the energy industry, because at their recent meeting in Japan the World Energy Council, which is a huge meeting of the energy industry people, governments and so on, have come up with a very nice statement that clearly recognized their environmental responsibilities. Let me just read one of their conclusions:

If sustainability is to be achieved, the full-cost pricing of energy must reflect the long-term marginal cost of increasing supplies and should incorporate the costs of environmental detriments where these are not captured by market mechanisms.

To have the energy industry and the World Energy Council begin saying things like that, I think progress is being made on a global scale. All we have to do is translate it into Canadian views.

Thank you.

Mrs. Payne (St. John's West): Ms Comeau, Mr. Bruce, I suspect that if nothing happens and the warming trend continues, we'll have all of central and western Canada moving over to the maritime provinces, and I'm not so sure the maritimers are that much in love with our western friends.

Some hon. members: Oh, oh!

Mrs. Payne: We are, really.

One of the things that didn't come up, and I would like to elicit some comment from both of you on this, is that on the west coast we're looking at a warming of water, and on the east coast we're looking at a cooling, presumably from the melting of the ice as a result of the warming trend. I'm wondering if you could comment on the effect this would have on life in the ocean and on the ocean floor.

Mr. Bruce: The fishery scientists are rather cautious about impacts, because they see a number of factors affecting life. But there is, it seems to me, a gradual emergence of the view that, for example, off the northeastern coast of Canada, while the loss of the cod stock is due primarily to overfishing, the failure of the stock to recover rapidly may indeed be related to the cold water temperatures that have been experienced there.

On the west coast the anadromous fish, the salmon, are very sensitive to temperature in the rivers in British Columbia and also very sensitive to predators, other kinds of fish that come up the west coast of North America when El Nino events occur in the Pacific. So the climate obviously plays an important role in the abundance of salmon and fish on the west coast.

Ms Comeau: Clearly, as we move forward, what the scientific assessments are saying is that if you change surface air temperatures, you're changing ocean temperatures and ocean circulation, and there will be an effect on the location of species. They talk about a northward movement in terms of perhaps some commercial species on the east coast.

However, the other impact that people aren't as aware of is the impact on lakes. Much of our tourism industry is reliant on cold water fish species, such as trout, pickerel, and wall-eye. Many of the studies from the Climate Change Digest series of Environment Canada show significant impacts on those species and significant losses of those species.

Mrs. Payne: The other question in fact has to do with the exploration activity for petroleum off any coast. I'm particularly thinking of Newfoundland. In recent years there has been a substance that has been dubbed ``flub'', or slime. Ironically, this didn't appear until after exploration for oil started. Now, that may very well have been a coincidence. Could you comment on that, if you're familiar with it?

Mr. Bruce: I'm sorry, I'm not.

Ms Comeau: I would like to comment, if I could, since you raised the issue about the potential development of oil and gas on the east coast. When I was there we talked about natural gas development off Sable Island, Nova Scotia, and of course there were more discoveries at Port au Port Peninsula and Stephenville. We already have Terra Nova and Hibernia.

I really think, and I said this many times to both environment and energy ministers there, that Newfoundland should proceed with caution with these developments. If you're looking at the kinds of numbers Jim is talking about - and we say these words out loud now and talk about global carbon caps - you're talking about very large-scale, capital-intensive, long-term projects that could be coming onstream just at a time when we're looking to go to significant reductions.

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From what I could see and hear from the people I spoke with in Atlantic Canada, most of this development was headed for the U.S. The benefits would really not be for Canada. So I have significant concerns about seeing Canada engaged in more significant oil and gas development out there.

Mrs. Payne: I think our concerns with regard to the effects we would have on our habitat in the ocean would be more important.

Thank you, Mr. Chairman.

The Chairman: Would you like to briefly comment on the widely held belief of the Minister of Natural Resources here on the Hill that the stabilization of carbon dioxide can be achieved through voluntary measures?

Ms Comeau: I've left with you today an evaluation that we at the Pembina Institute completed and released in Edmonton. They do acknowledge that in fact the voluntary program, if implemented to its maximum potential, could achieve only one-third. Depending on how you want to look at it, given current projections, we are about to exceed our stabilization target by 13%. It appears the voluntary program could help us achieve one-third of that, so we are still a long way from stabilizing emissions given the current programs on the table. Increasingly I think we have to come to the realization that the kinds of programming I'm talking about in terms of higher standards and so on are just absolutely inevitable.

The Chairman: And to achieve the red book commitment of 20% by 2005, what is needed, in your opinion?

Ms Comeau: You'll see that in the introduction to our study I actually discuss the need for more structural change. Incremental improvements in energy efficiency and incremental improvements in renewable energy are important, but we need structural change in two particular areas.

The focus has to be on the way that we live and this is very much an urban, municipal issue. The design of our cities, the issues related to the design of our cities, and our ability to use other forms of energy are critical. For example, as long as we continue to build sprawling single-use developments we just aren't able to explore options like district energy.

So the structural changes are key, as are the significant investments. We need significant rapid investments in renewable energy. In our view, Canada needs a renewable energy target and federal and provincial governments need to make commitments to purchasing what we call ``green power'', which essentially is renewable energy, electricity from renewable energy.

We need that kind of significant structural change in terms of setting goals and then moving forward to achieve them.

The Chairman: Thank you.

Mr. Forseth, please.

Mr. Forseth (New Westminster - Burnaby): This is an aside before I ask the question. When you say renewable energy, essentially you're saying hydro-powered dams rather than burning a fossil fuel.

Ms Comeau: No. I'm not looking even at that so much as at investments in wind, solar, biomass energy, taking advantage of wood waste and agricultural waste and so on. We do support small-scale hydro. If we were ever to get into a debate about how we arrived at this, I'm on a soft energy path. I believe in small-scale, appropriately sized energy projects where you generate local production for local consumption. So we would not necessarily support massive hydro development.

Mr. Forseth: Here's my main question. Both of you could comment. All of your charts and everything today have been basically in the Canadian context. In the international global system, how significant is Canadian economic activity we're talking about?

In the political situation we certainly want to do the right thing by our neighbours, but from a technical viewpoint, regardless of what we do, just how much of an impact does Canada have on the world system? We may not be a very big player.

Ms Comeau: I come at it from two sides. I hear this argument all the time: we're 2% of global emissions, so who cares, why bother?

I think we need to look at it from two points of view. One is that we will receive more than 2% of the impact. Canada is going to be seriously affected by the impacts of climate change. I think that's a critically important issue. We need to be internationally aggressive on global action. We clearly need global reductions in emissions.

The other thing, though, is that Canada is an export nation. A significant amount of our economic wealth is dependent on our export abilities. We have to compete internationally. Our economy relies on our ability to compete internationally. Japan, Germany, and other countries within the G-7 and the OECD are taking this issue on as part of their industrial strategy. Japan is investing millions in renewable energy. Germany is clearly in the lead in energy-efficient technology.

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Canada has opportunities. You have the Ballard technologies. We do have areas of expertise we can be selling internationally and taking advantage of. There are real opportunities there.

The other way we have an impact internationally is not so much through our domestic emissions as in the role we play in the international area: bilateral aid through CIDA, through the Export Development Corporation. We have a significant role we're playing in ongoing oil and gas development around the world. As I mentioned previously, Natural Resources Canada spends.... Every time I turn around, staff from their economic development branch are in Russia or in the various eastern bloc countries, helping them explore oil and gas opportunities. We're leveraging, if you will, probably more impact than we are domestically.

But my concern is for us in the longer term. We're losing our opportunities and we're going to lose competitively and in our own economic opportunities if we don't get moving.

What we're talking about here is services. We want lighting, heating, cooling, and so on, and all sorts of other economic activity related to them. This attachment we have to the source of the energy to do that is going to be to our long-term detriment.

Mr. Bruce: While 2% may not sound like a lot, it's in the top ten of greenhouse-producing countries. What we're talking about is 150 countries in the world, all emitting greenhouse gases. If every one of them says, well, we're only 0.3%, then we will never solve the problem. Canada, as a member of the world community, and as a very significant contributor compared with most other countries, does have to do its part here.

Mr. Forseth: I take it that on a per capita basis we don't come out so well.

Mr. Bruce: On a per capita basis it looks as if we're second-largest.

Mr. Forseth: In comparison with...?

Mr. Bruce: All the countries of the world.

Mrs. Kraft Sloan: We have an overpopulation problem in this country, tremendous overpopulation.

Ms Comeau: From a consumption point of view.

Mrs. Kraft Sloan: Yes.

[Translation]

Mr. Lavigne: Do you not believe that the main way for our governments to exert any influence on the oil industry or any other industry would be to make ordinary people, the general population , more aware of the problems? Governments could do this by producing very popular scientific programs which would be available to everyone through the television.

Today, ordinary people are not aware that the ozone layer is being depleted. It is not obvious to them, so they're not exerting any pressure when it is time to elect a new government.

As far as I am concerned, as long as citizens do not pressure the governments, the governments, and much less the oil companies, will refrain from taking any initiatives in this area. The Canadian government has invested a great deal of money in the Hibernia Project. Hence it could be said that the government is not about to withdraw or to head off in any new directions that would enable you to reach your objectives.

I do not want to be unduly pessimistic, however I do believe that it is the people who, once aware of the problem, will be able to trigger this process. I don't know if you have any comments that you wish to make on this matter. Perhaps you may find my comments somewhat off the wall, but I think that could help a great deal.

[English]

Ms Comeau: I face this each and every day, so I don't mind your comment at all.

I think it comes back to the issue I raised previously, multiple benefits. We have to make this issue alive for people and make them react to it in the sense that it feels as if it will affect them.

The health aspects are critically important, not only the health damage caused by acid rain and smog but the health impacts of climate change itself, which will be numerous. We will see new diseases coming into Canada, ones we haven't been exposed to before. People will be affected by more extreme weather events. As you saw, this year people were displaced from their homes because of forest fires and of flooding. Both of those potentially will increase under climate change. As well, people will be affected by extreme weather events - hurricanes, tornadoes, and so on.

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I think the health aspect is another thing. The scientific community clearly says climate change will cause significant loss of life. They're talking about increased cases of malaria numbering in the millions. People will die from these issues, so I think we have to be frank about them.

As you say, the other thing is to get information out to people in a very simplified form, which we are now working on. Many environment groups are working on translating the IPCC information into something that's accessible. David Suzuki will be doing a show on climate change on The Nature of Things on February 29. It will also contribute to that.

As I say, I do agree with you that it's going to take a lot of leg work. I think environment groups have worked very hard, and in many ways we've learned some lessons. We've spent too much time sitting in committee rooms and at stakeholder sessions arguing with industry groups who don't want to change. We need to get back to the ground, we need to get back into communities, we need to get back to people. That's what we're doing now. I think you'll see an increasing move within the movement, if you will, to get out to try to generate public reaction. Unfortunately, it's going to take some time.

At the same time, we're trying to argue the economic benefits while hoping that governments themselves will see both the deficit reduction possibilities and the reduced health care costs as benefits and opportunities they want to pursue. So it's a multiple agenda.

[Translation]

Mr. Lavigne: You talked about job creation in your presentation. I find that extraordinary. I did note down the figures you quoted, but they were quite significant. You talked about creating from50 000 to 100 000 jobs every year, over a 15 year period. There is no government, given the current unemployment rate, particularly in Canada, that could not fail to be impressed by such figures.

With the means that we have at our disposal today, do you know how we could make this transition and, as you suggested, create jobs? For governments that would like to achieve this, is there any spring board that will allow them to head in this direction? Is it relatively well defined? What would the government have to do to get these results?

[English]

Ms Comeau: There are a number of initiatives we're looking at. We are arguing the job creation benefit, which means you'd need to do several things. You need to essentially get governments out of the way, because we face barriers in many cases.

Another thing is there is no information. We need more available information and getting that information is the role of departments like Environment Canada, NRCan, and so on.

We need better standards so that you drive efficiency. You need regulations. For example, if somebody is going to retrofit a building, it has to be retrofitted to a certain level. That you need higher standards is a hugely important factor. There's a role for government there.

We also need to eliminate biases in the tax system. Class 43 is a prime example, and I think the Pembina Institute for Appropriate Development was here previously to talk to you about it. Your primary purpose has to be that of an energy company in order to qualify for it, which means if you are a doctor or a dentist and have some money to invest, you can't invest in renewable energy and get the accelerated tax break.

We are looking for changes in the tax system. We are looking for elimination of distortions in terms of subsidies that penalize, for example, investments in energy efficiency and so on. We're looking for higher standards and we're also looking for investments. Even in times of deficit reduction, we are looking for governments to redirect some spending into programs like investments in public transit and so on, because we think it pays. We are looking for some of that to occur. It's a difficult case to make in these times, but we are clearly confident that what we're showing is in fact not something that increases deficits for governments. We are clearly trying to be responsible in our case.

Governments will have to shift both their research and development away from nuclear, coal, and other fossil fuels and into renewable energy and advanced technologies - that's definitely critical - while trying to come to some kind of federal-provincial agreement on redirecting spending, for example, from roads into options. There has to be some level of government involvement.

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Mr. Bruce: It would be extremely helpful to this cause if this kind of discussion could be held with the committee on finance or the committee on natural resources, as well as the committee on environment, because one of the problems is that the kinds of messages that we've been trying to bring here are not well recognized or understood by officials or any people who are concerned with the Departments of Finance or Industry.

Mr. Steckle (Huron - Bruce): I've been impressed by many of the things I've heard this afternoon. Thank you for appearing.

I want to ask a simple question, and then I'll get into the more difficult one.

If you were on the roads department or the works department of the City of Ottawa and had before you the problem they have with snow right now, how would you view the whole warming trend? Would you be welcoming the whole warming trend?

Mr. Bruce: One of the interesting things that has apparently been happening in eastern North America and is statistically detectable is earlier winters and earlier springs. If you look at the seasonal changes in temperature, in the autumn we've seen some cooling, although the warming in winter, spring, and summer offsets that. That cooling is largely due to the advancement of the onset of winter. Most of the models also project an advancement of the onset of spring.

So my guess is that your city snow removal fellow should move a little more of his budget forward into November, because he probably won't need it in the spring.

Mr. Steckle: Maybe we'll be able to get more accurate numbers on that next April.

Mr. Bruce: I would hope so.

Mr. Steckle: If I might for a moment be the devil's advocate, you mentioned the resistance of people to change. Many of our lifestyle habits contribute to shortness of life. We know that certain things that we do cause us perhaps to live not as long as we would if we didn't participate in them. We collect taxes from some of those habits. In spite of knowing all this, we still do those things. Why do you think we would think differently on this other matter, when it's sublime, it's out where no one can really identify with it? Can you answer that question?

Mr. Bruce: There's a big difference between doing something to yourself that will shorten your life and having something done to you mostly by other people that will shorten your life. What we're seeing here is that the number of deaths due to climate change will likely be greatest in the tropics, in the developing countries of the world. The real question we have to ask ourselves is whether we have any responsibility, as major emitters per capita, to try to prevent some of those deaths in the developing countries, as well as some in our own country.

That's a question that is quite different from the one of smoking or drinking to excess affecting yourself.

Ms Comeau: The ethical dimensions of this issue are quite profound. Jim is completely correct: there's a very big difference between issues of voluntary risk and those of involuntary risk, and even in the Canadian context we are imposing a significant level of involuntary risk on people.

The point needs to be made that nothing in the package of measures that I was implying in any way reduces Canada's standard of living. In fact, it improves the standard of living and the quality of life because of the additional benefits in terms of the reduced exposure to pollution and health risk and so on. Our view is that it improves the quality of life, and that has been reinforced over and over again.

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One thing I try to explain to people, which they react to extremely positively, is that most of the problem we're dealing with in terms of climate change, acid rain, smog, toxics, and so on is as a result of waste. People understand waste.

For example, if you look at the efficiency of a vehicle, only 25% of the energy in gasoline turns the wheels and runs the equipment in the car. Everything else is wasted through waste heat in the internal combustion engine.

That level of inefficiency is rife through our system, 25% to 35% for thermal power plants and so on. There are technologies available today that save us money and eliminate waste. I think in that context it's a positive message and people react quite well to it.

I think it would be unfair to what Jim and I are proposing to associate it with a change that in any way implies a reduced standard of living. In fact, our view is that it improves our standard of living.

Mr. Steckle: I guess my point was that it's remote in most people's minds as to what is really taking place in our lives.

Now, may I go on and ask another question? In future science, should Canada be involved in the project of fusion, the science of fusion?

Mr. Bruce: Ideally I would answer yes, but I think you can't isolate that activity. I think there are other investments that are equally important, or maybe even more important, that we should be putting money into. I would suggest that improving the efficiency of renewable energy sources, especially solar energy sources, is maybe a better bet, but I wouldn't say it's a bad thing to invest in fusion. It has great potential if the problems can be worked out.

The Chairman: Mr. Lincoln.

Mr. Lincoln: I have two questions. One is international in scope and flows from Mr. Forseth's question about the percentage of Canada's input into this thing. I was wondering what role the force of example plays internationally. Obviously the people whose per capita use of energy, especially energy that pollutes, is much lower than ours always fling it back in our face when we try to preach to them.

I was wondering if one of you could comment on what is happening on the Chinese scene where we are peddling the Three Gorges dam and the CANDU reactors at the same time as the Chinese are now going into massive coal exploration and use and potential use, which with 1.3 billion people, multiplied by many in the years to come, is going to have a devastating effect. I don't know what you say to the Chinese about not using coal when they really need it very desperately. That's my first question.

To close, I was going to say to Louise that I agree with her that the health motive and the multi-faceted motives have to be brought out. But in the end, in the short term, I think it's going to be the profit motive that is going to turn this thing around. This is where I've seen Louise and people like her work with no means at all. It's the same for you; you're trying desperately to convince the world with no sort of financial help, no research. They're doing everything by themselves, going from hand to mouth mostly.

Again, I contrast it with my experience in the same field in the United States, where people like Lovins, Professor Rosenberg, Al Harvey, and NRDC are able to use huge means at their disposal. This comes because the foundations and the institutes of research in the United States are backed by tax credits to wealthy individuals, who pour money into these things to escape taxes. As a result, these foundations are changing the world there, because they're independent bodies.

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For example, in retrofits, NRDC can show its building in New York City. Audubon can show its building: it's state of the art. You can go to the Lawrence laboratory at Berkeley and see exactly what has happened to climate change and so forth. People like Lawrence go around the world preaching his message. There is his building in Snowmass.

I am wondering if, on a practical basis, the finance ministry isn't the one to tackle to say we have to make Louise Comeau a viable player. She's viable today, but if she had the means she could go and sell it to industry. She could get partners.

This is where we are going from hand to mouth. All the people who are on the side of the preachers are the poor guys and the preached have all the means at their disposal and they crush you with their lobbying and everything.

Sorry. I know the questions are too complicated, but if you could address these two points I would be very happy.

Mr. Bruce: Maybe I should say something about China and you can talk about the more difficult questions.

China and other developing countries will be a very major problem down the road. The present projections are that the greenhouse gas releases from the developing countries, and particularly China and India, will overtake those from the developed countries by about 2025 if business-as-usual projections proceed. But if we allow business-as-usual projections to proceed over the whole world we will have on our hands extremely serious problems with the global environment and all the impacts that will occur. So the real trick is how to get China and India and countries of that kind on a more sustainable energy pathway.

A number of studies have now been done, and a wonderful book is coming out, written byJosé Goldemberg of Brazil, a former science minister, about sustainable development pathways for developing countries. It follows the kind of advice Louise has been giving us. It says what we really need to do is to develop community-based energy systems for communities and not have huge, long-distance transmission lines and huge projects. Solar, wind, biomass, and sometimes small hydro are ways of achieving that on a community basis. That's the very strong message this book will be sending.

What we ought to be doing in our aid programs and our assistance programs is very greatly encouraging that kind of movement in countries such as China and India. It's not going to be easy, as you pointed out, but it is the way to go.

Ms Comeau: I want to make the same point, Clifford. There's a lot Canada can do with Len Good at the World Bank, with where CIDA's money is going, with the Export Development Corporation. Canada needs to make its lending climate consistent, and we have to stop financing oil and gas development.

One of the great things we need to be working on is the implication that we're trying to deny the developing world their right to development. That's the furthest thing from the truth. What we're trying to do is to guarantee access for them to the energy services they need to develop their economies in the way they see fit with the least impact on the environment and their health. What we need to do is to prove that case and get this out there.

At the moment that's just not happening. We have a lot of green talk, but the dollars are just not going in that direction. Canada needs to play a better role there, and we're not.

The information I've received lately is that the Export Development Corporation's current portfolio is something like 90% fossil fuel energy. So Canada is complicit in the growing emissions.

Mrs. Kraft Sloan: 98%.

Ms Comeau: No, I think it was 90% that I heard. They were basically boasting.

It's very difficult to get information. If the committee would like to explore this, I would appreciate it, because it's very hard for me to get information on. They were boasting they've never had so many energy projects in their portfolio. It was unprecedented. We need to get a handle on this.

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In my view, Canada has complicity in the growing emissions in the developing countries. We have companies such as TransAlta, for example, investing in coal plants in China. This is not something that's just happening outside of our purview.

Mrs. Kraft Sloan: It's interesting that you're talking about community-based energy systems. I'm keenly interested in community-based economic development, and I had the opportunity to meet with Dr. Yunus, who was the founder of the Grameen Bank in Bangladesh, which is a phenomenal success story.

Right now Dr. Yunus is organizing a conference to be held in New York next year, where they want to bring all the key decision-makers together to get 100 million people among the poorest of the poor in the world involved in a Grameen Bank lending system. They've got 12 million people currently borrowing from the Grameen Bank - it's the largest bank in Bangladesh now - and50% of those individuals have been able to bring themselves out of poverty, which is a tremendous thing. When you're talking about what's really sustainable and you make these linkages to energy, that's an incredible thing to do.

You had mentioned this before and you have mentioned it again. Perhaps you don't have this information, but I wonder how much Canada is spending in Russia and some of the developing countries to support. You mentioned that EnerCan was spending some money in Russia. Do you have any figures at all?

Ms Comeau: I do, but I don't have them with me. I do have information that is accessible to the committee. CIDA will give you a list of all of the projects it's financing that are energy projects. I just didn't bring that particular piece of information with me, but I happen to have a recent list on disk. On the World Bank information, certainly our office would be happy to provide you with whatever information we can on what's being spent there, but that isn't always easily available. For example, if you look at the annual report of the Export Development Corporation, there's no information at all in it. So that's a more difficult case. But on any of the publicly funded ones we're making some progress and getting information.

EnerCan is harder. They show some listing of the projects they're spending on, but from what I can see the resources are coming from staff time, which is not going to be reflected as project spending in their estimates.

Mrs. Kraft Sloan: But we can get a listing of programs and projects that are going on and extrapolate from there.

I was wondering, Mr. Bruce, if you could go over chart 8.4 again. I need some clarification. I was madly trying to take some notes.

Mr. Bruce: Which one was that?

Mrs. Kraft Sloan: This one, on alternative use and costs of emissions reductions.

Mr. Bruce: One of my favourite charts.

Mrs. Kraft Sloan: Because of the work the committee was doing last week with our forum on various disincentives to sound environmental practice, it might be useful to have this more fully in the record.

Mr. Bruce: I have provided a copy of those to your chairman.

Mrs. Kraft Sloan: Yes, and we were actually provided with a copy, as well, during the meeting.

Mr. Bruce: Do you want further explanation of this?

Mrs. Kraft Sloan: Yes, if you could just go through it again and perhaps help my slow little mind.

Mr. Bruce: Macro-economists, the people who look at it from the top down, have come up with this curve A, which is a curve that expresses the rising costs of emission reductions as these increase. They make a number of assumptions, as all modellers do. Their major assumption is that there are no market imperfections -

Mrs. Kraft Sloan: That's always my favourite one.

Mr. Bruce: - that the energy market is a perfect market, that the other markets that contribute to greenhouse gas emissions are all perfect markets, and that if there were benefits to be gained, they would be picked up in the marketplace - a touching part of the economists' faith.

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The second curve, B, says that those market imperfections do exist but that some of them can be corrected by various kinds of action, such as educational and regulatory programs and other kinds of actions on the part of government and industry. That will start you from below the zero line and give you some benefits for small emission reductions. You can get to some point out here on the emission reduction line at zero cost or at a net benefit. That line, studied for a whole lot of countries, is somewhere between 10% and 30% at the present time and could increase to 50% in the future as new technologies come on stream.

Curve C takes this negative cost potential, shown by the curve B modellers, and says that if you're going to achieve the emission reductions by increasing taxes on carbon, by charging for permits for emission or in other ways raising revenue, recycle that revenue in an efficient way, and you can actually improve the net benefits to the economy by using say a carbon tax and replacing more distortionary taxes by a carbon tax.

Finally, curve D says that there are a whole lot of other environmental benefits that can be achieved if you reduce our dependency on fossil fuels. Louise has talked about these, which include the reduction of smog, toxic chemicals in the environment and acid rain.

These benefits, according to studies done in Europe, give at least a 30% offset to any cost of emission reduction. A study in the U.K. gave a 100% offset to the cost of emission reduction. In other words, the whole cost of moving away from fossil fuel dependency could be attributed to what we've called here the secondary environmental benefits, without counting greenhouse gas reduction benefits at all.

So that's what these three curves imply.

Mrs. Kraft Sloan: That's where I had a question. The only difference between C and D is that you've had some accounting for the environmental benefits.

Mr. Bruce: D takes into account all of these things plus environmental double dividends.

Mrs. Kraft Sloan: That's terrific. Thank you very much.

Mr. Forseth: As we go out on the right scale, you're talking about percentages of what?

Mr. Bruce: Emission reductions.

Mr. Forseth: Yes. Can you put some numbers on that?

Mr. Bruce: I tried to. What the report says is that this reduction here is in the range of 10% to 30% now, with presently available technologies, for developed countries. They say it averages around 20%, so you can get out here 20% with curve B - that is, negative cost potential, energy efficiency measures, fuel switching measures and so on. As time goes on, we could probably move that out to about a 50% reduction, with improved technologies and improved experience.

The question of how far you'd get out with curve C, the economic double dividends by recycling a carbon tax, is very country specific. The ranges are very great, and only a few studies have been done. However, the studies do suggest that you can get some economic double dividends. In other words, if you recycle the carbon tax wisely, you can actually improve the economy.

For this next one, the environmental double dividends, no study I've seen gives you less than a 30% additional emission reduction at a zero cost. One study in the U.K. gave you that 100% of the emission reduction costs were justified by these environmental double dividends.

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Mr. Forseth: Okay. So what is the significance of D1 and D2 on the chart?

Mr. Bruce: They're just points on the D curve. I don't think they're anything.

Mr. Forseth: Okay. And the cost scale, the X and Y....

Mr. Bruce: This is a schematic curve. The costs in here are just to illustrate the point. The figures that I just quoted give you some idea of the size of these amounts.

If you take a look at A, for example, the top-down modellers say that it might cost 2% or 3% of the gross domestic product of a country if you just assume that you put on a carbon tax and that's it.

Mr. Forseth: So in essence these curves are really quite speculative and actually the shape of the curve could be quite different.

Mr. Bruce: The shape of the curve is probably okay, but the quantities on the curve will vary greatly from country to country and very greatly from model analysis to other model analysis. But the range of the distance you can get along the emission reduction line at zero cost is about along the lines that I've just given you.

The Chairman: Ms Comeau, you had an energy-related reduction plan in your brief. Are you aware of any other made-in-Canada energy-related reduction plan prepared by sector? If so, by whom?

Ms Comeau: Ralph Torrie and Danny Harvey have just completed a piece that will be in Energy Journal quite soon. They looked at what it would take to meet the kinds of reductions the IPCC is talking about. He was able to generate reductions of 50% to 70%. I can certainly make that study available to you. He basically concluded what I did: we require structural change as well as significant investment in the hydrogen economy. You know, you move out and move out and move out, but in the end, if you want to get the real changes, you have to invest in renewable energy and make those shifts. That's one study.

There's a range of studies that look at all of these issues from a variety of points. The Cogger study is one, of course. They looked at how we could stabilize emissions. DRI also looked at it. Unfortunately, they were not developed. It's true that DRI's is a stabilization plan, but it is not on the table now. It's quite old. This is the latest one that I think is politically astute, in that it builds on the climate change task group's work, which developed this list of 88 measures. But of course where there was no consensus on that process they weren't able to do anything with them. So the Climate Action Network actually did something with them. We found that we could actually achieve the goals we had set for ourselves, which the committee itself was unable to do.

The Chairman: And what does adipic acid mean?

Ms Comeau: Adipic acid is something that results from nylon production and it releases nitrous oxide.

The Chairman: Individually or collectively we will certainly talk to the chair of the finance committee and try to exert a gentle pressure on him to see if we can convince him to organize a hearing in his committee when his work is finished, maybe with the chair of the natural resources committee, if we have any success.

A voice: Do you mean joint hearings?

The Chairman: No, just on their own. They can handle it themselves or we can always join and listen.

We thank you very much. Your presentation is also very timely because we are producing a report on the necessity of identifying obstacles in reaching or in moving toward sustainability, and energy is a very important sector. We'll keep in touch. We're very grateful you were able to come.

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Ms Comeau: Thank you.

Mr. Bruce: Thank you.

The Chairman: This meeting is adjourned.