How Copenhagen Could Cost Canada Most

Climate Change, Energy, Environment, Frontier Centre, Role of Government, Uncategorized, Worth A Look

For a global gathering ostensibly designed to harness international ingenuity to arrest global warming, the United Nations Copenhagen Climate Conference at least has a fitting name. The website advertising UNCC seems to fit the bill, too, with the requisite photos of spewing smokestacks, parched landscapes and natural disasters juxtaposed with wind turbines and adorable penguins.

All the more odd, then, that the draft treaty being proposed for the December meeting devotes roughly as much of its text to new foreign aid programs as it does to a plan to reduce greenhouse gases.

The Kyoto Protocol — which expires in 2012, and which Copenhagen is intended to replace — was in some corners accused of being a covert wealth transfer plot, since it required rich nations, unable to reach difficult targets, to buy carbon indulgences from poorer ones: “a socialist scheme to suck money out of wealth-producing nations,” was Stephen Harper’s assessment, long before he became Prime Minister.

With Copenhagen, however, there is no hidden agenda: its authors say that transferring wealth is exactly what they aim to do. Though its draft form is a menu of optional language and policies intended to be narrowed in the lead-up to the conference, and at the conference itself, the spirit of the document is unmistakable. It proposes in plain language an arrangement that will see nations like Canada guarantee to send billions of dollars every year for decades to the developing world as payment of a “climate debt” owed for our long history of emitting carbon dioxide into the atmosphere. There is, of course, some talk of emission reduction targets, maximum CO2 concentrations in the atmosphere, limiting global temperature increases, and plans to adapt to inevitable climate shifts, with most of the details remaining to be hammered out. But as much as anything else, the Copenhagen treaty calls for the payment by rich countries of what can probably best described as climate reparations.

This may be what Yvo De Boer, executive secretary of the UN Framework Convention on Climate Change, alluded to last month when he doused expectations that Copenhagen would produce a “comprehensive” international climate treaty. It would be “impossible to craft and draft” a detailed plan to effectively combat climate change in time for December. “That is not possible. But it is also not necessary,” Mr. De Boer said. “I think what Copenhagen has to achieve is a basic political understanding.”

These are some of the understandings proposed in the treaty’s current working version: industrialized countries should compensate developing nations for not just the cost of preventing and adapting to climate change, but for “lost opportunities, resources, lives, land and dignity” triggered by it; industrialized countries are to commit “at least 0.7%” of their annual GDP, above and beyond existing foreign aid commitments, to compensate the developing world for lost dignity and other distress (in Canada’s case, roughly $10-billion a year, based on current GDP levels, on top of the $4-billion already spent on foreign aid); and that the money will be deliverable to the United Nations, which will be in charge of handing it all out. “By 2020,” the treaty insists “the scale of financial flows to support adaptation in developing countries must be [either] at least USD 67 billion [or] in the range of USD 70 to 140 billion” every year. If Ottawa signs on to Copenhagen, the size of our resource-based export economy means Canada may pay more dearly for the UN’s latest climate change arrangement than almost any other country on the planet. And in the end, because it may only shift carbon-intensive production from cleaner countries to less efficient ones, the entire exercise may do very little to limit emissions.

“The best thing we can do for the planet is get this Copenhagen process over with as soon as possible so that we can move on to real action,” says Aldyen Donnely, president of the Vancouver-based Greenhouse Emissions Management Consortium, an industry association aimed at reducing CO2 emissions. If Canada does sign the treaty, she warns, we “will lose all control over our sovereignty and resource base in a matter of years.”

Environment Minister Jim Prentice’s office would not say whether he or his staff was alert to the apparent and special risks to Canada in the current version of the Copenhagen treaty. “We won’t be commenting on drafts,” said a ministry spokesman, by e-mail, in response to an interview request.

The Copenhagen draft is similar to the Kyoto protocol in its basic cap-and-trade plan for reducing emissions: essentially dividing up the atmosphere into emissions portions that are allotted to nations based in part on historic levels, and then putting each country’s allowable emissions on reduction schedules. But while the 1999 accord required countries that exceeded their limits to purchase unused credits from developing nations with surpluses — something Copenhagen also allows — it had nothing like the outright, quantified demand for billions in transfers from wealthy nations to poorer ones. Nor did it, as Copenhagen does, entrust these billions to the management of the United Nations, whose administration of the severely corrupted oil-for-food program in Iraq bred widespread skepticism of the world body’s transparency and accountability. The fact that this UN body anoints itself a “government” responsible for taxation, enforcement and redistribution according to paragraph 38, Annex 1, of the treaty should worry any nation that values its sovereignty, says Christopher Monckton, a former policy advisor to Margaret Thatcher’s U.K. government, and an advisor to the British-based Science and Public Policy Institute, a research and advocacy group that rejects the theory of man-made global warming. Paragraph 200, Annex 3b, for example, requires signatories to submit to the UN their plans to reduce emissions, which “shall be reviewed as part of the annual compilation and accounting of emission inventories and assigned amount,” suggesting that if the UN doesn’t like a certain country’s plan to cut greenhouse gases (GHGs), it has the power to deny assigned emission allowances until it sees a plan it does — potentially, he says, leaving countries without full control of their own environmental policy.

“Any elected leader who signed the climate treaty would be signing the death-warrant of his nation’s democracy,” says Lord Monckton.

Those championing Copenhagen as the second chance of a Kyoto treaty that never quite lived up to expectations see billions in new foreign aid as a necessary part of any climate pact: developing countries are most vulnerable to the climate change caused, they say, by the West’s carbon-based economy, will suffer the brunt of the damage from droughts and floods, and will themselves need help in developing economies less reliant on conventional, carbon-intensive technologies. “Industrialized countries are hugely responsible for the global warming pollution that’s been pumped out into the atmosphere, but on the other side, people in the developing world are on the frontlines, they’re the ones that are already experiencing some of the harshest impacts of climate change,” says Kristen Ostling, a spokeswoman for the David Suzuki Foundation. “What would be fair is that we need to, in the developing world, enable and support poor countries to adapt to the worst consequences of the climate crisis and to help them reduce their own emissions.”

But the particular design of Canada’s economy could mean far stiffer costs, well beyond just paying our “climate debt” to the developing world. Because developed nations must work to reduce emissions from historic benchmarks, those countries with older, less-efficient industries are actually given a leg-up by Copenhagen’s cap and trade plan, says Ms. Donnelly. Compared to the U.S., for instance — let alone once-heavily polluting former Soviet countries — Canada’s more recently developed, and thus, more modern industrial sector is already significantly more efficient. We have, says Ms. Donnelly, largely installed some of the most potent efficiency-enhancing technologies in this country; to reduce their own industries’ emissions by 80% will be a far easier task for Americans, with older infrastructure, than it will be for Canadians to tighten up their own already relatively low-emitting factories and resource extraction processes. As bad a rap as Alberta’s oilsands get, for instance, Canada’s petroleum products actually rank in the lowest 25% of emissions-intensity in the world, Ms. Donnelly points out. Yet, she says, under Copenhagen’s model, investors will actually be attracted to countries with far worse environmental records, where easier emissions reductions will make it cheaper to operate.

“It is much more expensive to cut GHGs from an historical baseline in Canada’s already mostly efficient … sectors than to do so in the EU and U.S.’s outdated industrial and agricultural bases,” Ms. Donnelly says.

It also figures that the more countries that rely on Canada’s exports, as the U.S. increasingly does, the more Canada would be seen, using the Copenhagen model, as an ever-larger emitter, even if it is other countries demanding the goods. This, says Ms. Donnelly, explains why Washington may well be keen to sign the treaty: with their own oil reserves in decline in recent years, Americans can collect quotas based on a period back when their oil production peaked, while continuing to consume energy, from Canada, without having to be responsible for all the CO2 emitted in the drilling process.

It gets trickier: Under the proposed treaty, developing countries — which would include such Canadian trade competitors as China, South Korea, India, Brazil and Mexico —are under far looser obligations to reduce emissions than wealthier nations like Canada; they are, after all, generally less equipped to modernize their infrastructure. But under Copenhagen’s paragraph 23, Annex 1, and paragraph 7, Annex 3e, no nation is permitted to impose “any form of unilateral measures including countervailing border measures, against goods and services imported from developing countries on grounds of protection and stabilization of the climate.” So, although China might impose duties on any Canadian steel it imports, if it can show we have fallen short on CO2 reductions, Canada could not do the same to Chinese concrete imports. And while World Trade Organization rules prohibit any foreign government from slapping tariffs on Canadian exports on the excuse that we refused to sign Copenhagen, if we do sign it, and then don’t live up to our promises, it could well be legal for our trading partners — even our NAFTA partners — to claim that our failure to live up to emission-reduction targets gives us an advantage, permitting them to put barriers up to our goods.

In fact, as a wealthy and growing net exporter of carbon-intensive products, particularly energy, Canada is looking at a world of different trade obstacles under Copenhagen that almost no other country in the world faces. Growing exports of natural resources and emissions-heavy agricultural and building product; a comparatively modern industrial base with relatively less room for improvement; and, to top it off, a Kyoto emissions benchmark agreed to by Jean Chrétien’s government that likely understated our historic emissions levels by as much as 13%, means Canada — even it its environmental intentions are just as noble as any other country — may stand to bear a uniquely heavy burden under Copenhagen if the agreement looks anything like what the working draft promises.

How much our federal government appreciates this is unclear. What is certain is that a Conservative minority government will face immense pressure from opposition parties, and environmental groups, to commit Canada to the Copenhagen treaty. And that it will be particularly challenging for any political leader here to turn away from an internationally popular plan billed as something to save the planet, even if, in reality, Copenhagen probably have as much to do with unleveling the planet’s economy as it does with protecting its ecosystem.