Clear national policies on energy and climate change are needed

Clear national policies on energy and climate change are needed

A view from the private sector
May 1, 2006

The world currently faces two staggering issues—each enormously complex and each intertwined with the other—and both of these issues could have devastating consequences for the state of the global economy and for the viability of the earth’s environment. Yet Canada is without national policies on either subject.

The issues are these: the future of the world’s energy supply and climate change. Canada has a responsibility—and a huge opportunity—to take a global lead in sorting them out.

Where energy is concerned, Canada is in a privileged and perfectly competitive position. Our country is blessed with a magnificent suite of energy sources, including conventional oil, natural gas, hydro and uranium, and we are world leaders in the development of alternative energy sources such as hydrogen. Now that the price of oil has risen above $60, we also can count on the energy potential in the tar sands, the single largest repository of oil in the world.

This current and anticipated energy wealth has already ignited the Canadian economy. Energy companies dominate the buoyant Toronto Stock Exchange, and Canadians of all economic classes are benefiting from the royalties that are streaming back to governments, as well as from increased payout values in their energy-invested pension plans.

But Canada does not exist in isolation and, on the world stage, energy is a security and cost issue, not just an economic one. Canada should be clear about its own future preferences. We need a plan.

The second issue complicates the first. Although there are dissenters, highly credible experts say that human-induced global warming has the capacity to change the face of the planet quickly and forever. Those same experts hold that climate change is driven primarily by the burning of carbon-based fuels—so the energy bonanza that might otherwise rest in the oily sludge of northern Alberta comes with an awkward environmental entanglement.

Setting aside, for the moment, any argument over the science, the implications are obvious:

Trend lines for aggregate global Gross Domestic Product are a proxy for trend lines in annual global greenhouse gas (GHG) emissions, which track the production and consumption patterns of carbon-based fuels almost exactly. If you accept these correlations, then it becomes clear that, as the world’s major and emerging economies heat up, so does the planet—with potentially devastating consequences.

Thus, to contain climate damage, the goal—stated at least tacitly in international agreements such as that negotiated in 1997 in Kyoto—is to break the pattern, to stabilize GHG emissions at a level below the earth’s capacity to reabsorb them. This implies a cut of 75% of current annual emissions. But last year, the GHG emission rate increased faster than ever before. In fact, carbon dioxide levels have risen from 280 parts per million in 1750 (before the industrial revolution) to over 380 ppm today—higher than any previous levels that can be reliably measured (i.e. in the last 420,000 years). If we continue on this trajectory, we will pass 560 ppm by mid-century—double the historic levels, and by no means an upper limit.

The foregoing leaves us with a host of difficult questions and no national consensus on the answers. On the energy front alone, the federal government is paralysed by (legitimate) concern over how the Provinces might respond to any effort to create a national energy plan.

On the economic front, no one really knows the implications of weaning the economy off carbon-based energy sources. For example, whether carbon-based energy prices rise directly (because of shrinking reserves of conventional hydrocarbons) or artificially (through a tax or regulatory policy) energy consumption would be constricted. While mitigating climate change, this could also threaten our standard of living unless the public is prepared to accept a different lifestyle. Whether and how to transition to such a “sustainable” lifestyle is a potent political conundrum.

And on the environmental front, even those who speak with certainty about the broad implications are stumped when it comes to specifics. What are the trickle-down results of climate change, which in sequence of uncertainty, are:

  • the timing and magnitude of physical impacts (e.g. rain, glacial ice melt, storms, surface temperatures, local air quality);
  • positive or negative biological impacts (e.g. disease patterns, agriculture, far northern living conditions, health effects on those with asthma, emphysema or other breathing difficulties);
  • the costs or benefits of those biological impacts (e.g. reduced wheat sales, pine beetle infestations, health costs, relocation costs, human migration patterns);
  • overall impact on quality of life (taxation needs, standards of living, gross domestic product).

Finally, there is an enduring—though less supportable—argument about whether climate change is actually occurring in the way that the majority of the world’s climate scientists describe. This argument must be resolved, publicly and quickly, if Canada’s political leaders are to tackle the energy and climate policy issues.

Two disparate voices in that argument have asserted themselves in the last month. First, on April 6, the Financial Post published an open letter to the Prime Minister from 20 Canadian and 40 foreign scientists who questioned the validity of current climate models and called for “comprehensive public consultation sessions … to examine the scientific foundation of the federal government’s climate change plans.”

In response, on April 18, a group of 90 Canadian climate research scientists sent their own letter to the Prime Minister, in which they said: “We urge you and your government to develop an effective national strategy to deal with the many important aspects of climate change … We believe that sound policy requires good scientific input.”

While the two groups are at odds over the dangers of climate change and the urgency with which government must implement new policy, they agree that we need a public exercise to review the science and advance a national strategy. I agree. But I also would argue that no sensible climate change policy can be conceived in isolation from a corresponding consideration of our energy alternatives. One possible mechanism for such a policy review would be a Royal Commission on Energy and Climate Change.

This is no time for government to abdicate its responsibility. We must engage, quickly and decisively, in a process that resolves national differences and develops clear and practical national policies.

Michael J. Brown is Chairman for Chrysalix Energy Management Inc.

The views and ideas expressed in this column do not necessarily reflect those of the Canada Foundation for Innovation or its Board Directors and Members.