Although nothing decided at meetings between the 18-member Asia-Pacific Economic Cooperation (APEC) club is binding, Mr. Goodale’s comments represent hints of the position Ottawa is developing for a key conference at Kyoto, Japan, in December. There, governments which subscribe to the theory that man-made emissions of carbon dioxide are heating the earth’s atmosphere will attempt to force an international treaty requiring steep cuts in CO2emissions by 2010. That would wreak havoc on energy-intensive economies, none moreso than Canada’s.
“The APEC gathering was supposed to be about trade,” objects Roger Soucy, president of the Petroleum Services Association of Canada. “But a bare handful of the 97 people there were from business. Environment became the number-one topic, and our energy minister spent a huge amount of time talking about it.” Yet those with the most to lose, oil and gas producers, appear remarkably apathetic towards the prospects of being hammered by new taxes or regulations.
In fact, in the mind of David Manning, president of the Canadian Association of Petroleum Producers (CAPP), Mr. Goodale’s statements are a hopeful sign. As CAPP sees it, so many governments, government-funded scientists, journalists and environmentalists fear an impending climatological catastrophe that it is too late to convince them otherwise. The best that can be achieved is to persuade governments to implement less costly measures than taxes.
One such measure is known as joint implementation. A Canadian multinational could receive some form of domestic CO2 reduction credit in return for cutting CO2 emissions at one of its plants elsewhere in the world. For example, it could replace a dirty, inefficient coal-burning plant in a Third World country with a modern natural gas-fired one. Such moves are far more cost-effective than imposing more controls on Canada’s already efficient energy infrastructure.
“If developing nations are not part of the discussion about climate change and global warming, there’s not going to be a solution,” Mr. Manning said at the meeting. In this context, Mr. Manning sees Mr. Goodale’s remarks as highly promising. “We were hoping for such statements from him,” says Mr. Manning. “He’s sending a message. We believe it’s setting the stage to call for measures like joint implementation instead of carbon taxes at Kyoto.”
That is especially important, Mr. Manning believes, with federal Environment Minister Christine Stewart breathing down Mr. Goodale’s neck. Ms. Stewart recently announced her department is readying a national campaign to “help the Canadian public understand” that “dramatic measures” are needed to halt global warming. This was taken as code for the dreaded carbon tax, something Mr. Goodale has twice forsworn.
Mr. Manning points out Mr. Goodale’s remarks also move Canada’s position closer to that of U.S. President Bill Clinton, who is expected to go along with a plan to cut CO2 emissions, but only if major Third World countries participate. “We don’t want to get off-side our major trading partner on this issue,” Mr. Manning warns.
But sceptics argue that CAPP’s strategy is futile, perhaps even self-destructive. Radical greens openly admit their real agenda is to virtually shut down the coal, oil and natural gas industries. They are hostile towards any strategy that reduces CO2emissions at reasonable cost to industry. Developing countries like China and India, meanwhile, have no intention of adopting any measures that hamper their economic growth, much of which depends on rapid increases in energy production. Economists forecast $2.2 trillion will be spent on energy infrastructure within the Pacific Rim over the next 13 years, most of it in East Asia.
“These countries are simply not going to let their economies be hamstrung by first-world environmental policies,” warns Mr. Soucy. “Any belief that Goodale’s remarks are a ploy to push joint implementation is sheer speculation, like reading tea leaves. We could end up cratering Canada’s economy while the Third World tells us to take a flying leap.”
Nor is hitching Canada’s wagon to the U.S. government’s packtrain a sure bet. The Republican-controlled Senate must ratify any treaty endorsed by the White House. The Senate has not hesitated to kill or delay treaties in the past. Pro-industry congressmen quashed President Clinton’s previous plans for a “btu tax,” a charge on every unit of energy consumed. An internationally mandated carbon tax or other industry-killing measure would receive an equally chilly Senate response. Thus CAPP’s appeasement strategy might prove as futile as it is risky.