Environmentalists I spoke to today were “pleasantly surprised” that Corporate Canada, including titans of the oil patch like Suncor's Rick George, endorsed a call for an “aggressive” plan to reduce the greenhouse gases, like carbon dioxide, that cause global warming.
What really seemed to raise some eyebrows was the assertion by the Canadian Council of Chief Executives (CCCE) that Canada must commit itself to an absolute reduction of greenhouse gases. In other words, the total amount of greenhouse gases produced in Canada must, at some point in the future, be smaller in one year than in the previous year — even if economic output were to jump, say, 50 per cent from one year to the next.
That's quite a change from the Conservative government's widely criticized “intensity” targets in which the amount of greenhouse gases per unit of economic output must decrease. With intensity targets it is possible that greenhouse gases could rise if economic output continues to rise from year to year.
Now, mind you, Environment Minister John Baird asserts that his government's intensity targets are so severe that they essentially amount to an absolute target. You won't be surprised to hear, though, that climate change scientists, including some of who have, at times been seen as sympathetic to the government's view, generally disagree with him.
So here's the CCCE today:
“While intensity targets make sense as a means of encouraging Canadian firms to become more efficient without being penalized for growing, the ultimate goal must be to achieve a substantial absolute reduction in emissions of greenhouse gases, in Canada and globally.”
This statement is part of a document, one should add, that is not produced by a policy wonk in some industry association — this is a document signed by the chief executive officers of 33 of Canada's largest companies, including Rick George, the chief executive of the Suncor, the biggest producer in Alberta's oil sands.
Environmentalists were also encouraged by the chief executives reference to the fact that carbon needs to have a fair and appropriate price attached to it. The thinking there is that if carbon has a price on it, it will show up on a firm's balance sheet as an asset or a liability — just like a factory or a loan to be paid — and that means firms will make rational decisions that should tend, over time, to reduce their liabilities, i.e. reduce their creation of carbon. Here's what the CEOs said:
“The price signal is an important means to ensure that energy use reflects its environmental costs, and these signals can be strengthened through market-based mechanisms such as emissions trading and environmental taxation. However, any such tools must be designed so that industries and consumers are not merely penalized, but have positive reasons to act. Policies aimed at changing behaviour through price signals must deliver positive environmental outcomes in ways that foster an innovative economy and strengthen Canada's competitive advantage.”