Tories in sprint to match Obama on climate change

Fuel standards and emissions targets on harmonization agenda

Allan Woods
Ottawa Bureau

OTTAWA–Prime Minister Stephen Harper says he is breathing a sigh of relief that U.S. President Barack Obama is serious about climate change, but the pace of change in Washington could leave him struggling to catch his breath.

From world-leading automobile fuel standards to a clean energy surge and greenhouse gas restrictions, the U.S. is set to accomplish over the next year what Canada has been promising for a decade.

While the Tories have put pollution regulations on hold until the American playbook becomes clearer, Obama called Tuesday in his address to Congress for an emissions cap-and-trade system that is anticipated to raise $300 billion in new revenue and set the course for economic recovery.

"History reminds us that at every moment of economic upheaval and transformation, this nation has responded with bold action and big ideas," Obama said, calling climate change, along with health and education, his top priorities for the year ahead.

The Conservatives have pledged to keep pace with Washington both to do what is politically popular and to stay competitive economically, but signs have emerged that Harper's team has not completely changed its stripes.

Asked this week about threats in the U.S. to ban oil imports from Alberta, Harper insisted Canadian taps would continue to slake the U.S. thirst, regardless of political rhetoric.

It was reminiscent of the diatribes he once reserved for opposition parties urging a carbon tax or Kyoto compliance. This time, his target was green U.S. governors like California's Arnold Schwarzenegger, who has passed legislation to outlaw dirty energy sources in favour of cleaner fuels.

"There should be no illusion that economic reality will hit those environmental policies pretty hard when one goes to implement them," Harper told a like-minded CNBC host, Larry Kudlow.
But Harper attacks the state's environmental stewardship at his peril; the White House and Congress are littered with Californians leading the climate change fight.

Henry Waxman, a Democrat from Los Angeles, is chair of the House of Representatives' Energy and Commerce Committee and has the backing of San Francisco's Nancy Pelosi, the House Majority Leader, to move quickly on environmental legislation. In the Senate, California Democrat Barbara Boxer is quarterbacking the creation of a system to cap emissions and trade carbon credits, which administration officials said could be passed into law this year or next.

California is also represented in the senior ranks of Obama's White House, with Nancy Sutley running the Council on Environmental Quality. She, along with climate change czar Carol Browner, Environmental Protection Agency director Lisa Jackson and Nobel-prize winning scientist Steven Chu, Obama's energy secretary, figure prominently in the U.S. global warming revolution.

Environment Minister Jim Prentice needs to ingratiate himself to all of them when he visits Washington next Monday and Tuesday to try to start lining up Canada's climate change policy with the one emerging in Washington.

The first stop in the harmonization agenda comes next month when the U.S. government sets national fuel-efficiency standards. The Harper government, which has been negotiating Canadian standards for more than a year with little to show, is expected to fall in line with the Obama auto edict, one industry insider told the Star.

If, as many expect, California's more stringent fuel standard is eventually adopted nationally, the auto industry also expects Canada will follow suit.

"Are we waiting for Obama? I guess to some extent we are," the insider said. "That's been made more clear than ever by Harper, or his environment minister, Jim Prentice."

Melding the two countries' climate change policies will be complete when the Tories, as expected, abandon targets based on the intensity of emissions in favour of an absolute cap, which would allow Canadian firms to enter directly into a U.S. cap-and-trade market. That transition was to have taken place in 2020 or 2025, though the government's own 2007 plan said it could happen sooner depending on the actions of other countries, including the U.S.

Harper downplayed controversy over Canada's intensity approach after he met Obama, and a PMO official suggested that converting one to the other is like switching from metric to imperial measurements. No one could explain why the government's own plan calls for such an arbitrary switch in 2020 or 2025.

The government has been warned by experts that trading carbon credits based on an intensity system would require more oversight, more costs and more uncertainty than switching to a hard emissions cap like the U.S. is proposing.