Mark: Canada is an interesting case. Yes, it has ratified the Kyoto Protocol - but it's not yet clear how the Canadian government will deliver on that commitment. The provincial government in Alberta, which happens to be Canada's energy capital, is characterized by many as being solidly in the camp of climate "skeptics." So you can imagine the complications of developing Canadian compliance policy for Kyoto. This is one reason that the promotional materials selling compliance with the Protocol in Canada focus on such economic opportunities as developing and exporting new emissions-reducing technologies. But this same focus makes it hard to figure out exactly where Canada's needed reductions will come from by the Kyoto Protocol’s deadline of 2012.

It’s not that there isn’t a lot of activity in Canada on this front. The federal government is developing a long list of initiatives, including:
  • A multi-billion dollar Climate Fund, which will finance domestic and international emissions reduction efforts. The Fund will finance a wide variety of measures, including R&D and technology development activities, making it difficult to project what the Fund will actually deliver by 2012 for Kyoto compliance purposes.
  • A major domestic offsets program, for which the rules are now being written. International market mechanisms like the Clean Development Mechanism were seen as a major victory for Canada and the United States when the Kyoto Protocol was signed in 1997. Today, they seem out of political favor, and it’s much more common to hear that Canada should "keep its money at home."
  • A Large Final Emitters program, in which Canada’s larger companies are given emissions reduction obligations, albeit expressed in largely intensity-based terms. These obligations can be met internally, through offsets, or by buying allowances from the federal government [at a fixed cost of $15/ton (Canadian)].
Notwithstanding the fact that Canada and the U.S. are in very different places when it comes to Kyoto, a particularly notable distinction in Canada’s stance, as compared to the direction the United States might well have gone, is the distribution of compliance burden between government and industry. In Canada, the primary burden of meeting Kyoto, at least for now, appears to lie with the federal government. The national government has accepted responsibility for the dominant fraction of the needed reductions, established intensity-based targets for industry that make it difficult to know the absolute reductions that will be delivered, and guaranteed to major emitters that their liability won’t exceed $15/ton (Canadian).

It’s a bit early to say conclusively whether and when Canada will need to scramble to adapt its current lineup of programs to the needs a 2012 Kyoto deadline, and whether it will have enough time to do so in a cost-effective manner. Of course, Canada is not alone among industrialized countries in being in this boat.

Additional information about what Canada is looking at, including its domestic offsets program design documents, is available online.

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Dr. Mark C. Trexler has more than 25 years of energy and environmental experience, and has focused on global climate change since joining the World Resources Institute in 1988. He is now president of Trexler Climate + Energy Services, which provides strategic, market, and project services to clients around the world.

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