International Climate Policy Shouldn’t Punish Growth

Commentary, Climate, Ben Eisen

The United Nations Climate Change Conference is convening this week in Durban, South Africa. A major objective is to extend the Kyoto Protocol, currently set to expire next year, by establishing new targets for greenhouse gas emissions reductions. Canadian negotiators should consider the reasons for Canada’s inability to meet the last set of targets to which our government committed us. The Kyoto treaty failed in this country largely because it was structurally flawed, unfairly disadvantaging fast-growing countries. Canada should refuse to participate in any future pact that similarly punishes growth.

Environment Minister Peter Kent has already stated that Canada will not accept new binding targets unless all major emitters, including developing nations, participate. This is entirely sensible. China is the largest greenhouse gas emitter in the world. Any treaty that doesn’t address Chinese emissions wouldn’t be worth the paper it’s printed on, and would leave Canada at a disadvantage in a competitive world. However, Canadian negotiators should demand further changes to the Kyoto structure beyond including developing countries. Kyoto featured additional design flaws that should be rectified as a precondition for Canada’s participation.

For starters, Kyoto unfairly punished population growth. Kyoto committed Canada and the European Union to similar sized cuts in overall emissions, despite the fact Canada’s population is growing more than twice as fast as Europe’s.  Between 1990 and 2009, Canada’s population grew by 22 per cent. By comparison, total population grew by only 9 per cent in the 15 original European Union countries. A growing population means more people driving cars and heating homes, which in turn makes it harder for fast-growing countries to cut total emissions.

The United States – another fast growing country – declined to ratify Kyoto.  The wisdom of this decision is demonstrated by the fact that although the United States has cut emissions per person by 13 per cent since 1990, that country would have missed its Kyoto target by a long shot because of its rapid population growth. As a result, even though the United States achieved larger per capita emissions cuts than several European countries with sterling environmental reputations, Kyoto participation would have subjected the United States to strong criticism for failing to reach an unrealistic target for a fast growing country.

This problem can be addressed easily by expressing emissions reduction targets in per-capita terms instead of absolute emissions. Unless other countries are willing to accept this common-sense structure, Canada should not participate.

The Kyoto treaty didn’t just punish population growth – it also punished economic growth. A simple regression analysis shows fast-growing economies have found it harder to achieve overall emissions cuts than jurisdictions where economic growth has been sluggish.  Over the past twenty years, Canada has been one of the faster growing affluent economies, which has made cutting emissions more difficult. Canadians should continue their record of growth, and should not be punished for doing so.

Canada has made meaningful progress toward making our economic activity more sustainable. Each dollar’s worth of economic activity in Canada today generates, on average, 25 per cent less greenhouse gas than the same dollar of economic activity did in 1990. In other words, despite hand wringing over oil sands activity and other types of development, our economy is environmentally much more efficient than 20 years ago. Despite efforts to cast Canada as a climate rogue, the dull reality is that Canada’s performance in recent years is closely aligned with several other countries that have experienced equivalent population and economic growth.

Simple national emissions caps such as Kyoto’s make no allowances for the fact it is harder to cut emissions in growing economies. Again, there is a simple fix. Emission targets can be expressed in terms of greenhouse gas emissions per dollar of economic activity. This approach would ensure that countries are not rewarded for economic stagnation. 

Canada is a dynamic, fast-growing country.  Emissions targets based on absolute emissions levels disadvantage such jurisdictions. Of course we should try to make our economic activity more efficient and environmentally sustainable. We should not, however, embrace policy structures that punish this country for having the audacity to grow and prosper.