Canada's Kyoto Concerns Go South

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Appeared in the New London Day (Connecticut), November 8, 2002 and The Providence Journal

While the United States has been focused on the mid-term elections and Iraq for the past several months, Canadians have been focused intently on the question of whether or not Canada should ratify the Kyoto Protocol on Climate Change.

The firestorm of debate erupted in September 2002, at the Johannesburg “Earth Summit,” where Canadian Prime Minister Jean Chrétien pledged to ratify the Kyoto Protocol by Christmas. If Chrétien lives up to his promise, Canada would be the first, and likely the only country in North America to sign on to the Kyoto Protocol.

Recent developments will take Canada’s debate southward as well, as Alberta Premier Ralph Klein plans to head to New York to drum up opposition to the ratification by warning international financiers about the damage that their Canadian operations will face in the event the Protocol is ratified. And there’s a lot to warn about. Canada’s greenhouse-gas reduction target under Kyoto is a stiff one.

Though it emits only 2 percent of the world’s greenhouse gas emissions, Canada’s negotiators in Kyoto got snookered, and agreed to drop its greenhouse gas emissions to a level six percent lower than that produced in 1990. As energy use and greenhouse emissions have gone up since 1990, Canada’s Kyoto obligation really requires a cut in greenhouse-gas emissions by thirty percent from the level expected by 2012. Cost and job-loss estimates are high, even under optimistic scenarios. University economists in Canada estimate that between 60,000 and 240,000 fewer jobs are likely to be available in the years after Kyoto implementation, and up to two percent of the Canadian gross national product could be sacrificed to the treaty. Economic studies suggest that the cost of electricity could double, natural gas prices would increase by sixty percent and gasoline prices could reach 1.10 per liter (over US $4.00 per gallon).

With the memory of previous Federal intrusions into what are considered Provincial prerogatives still rankling, provincial premiers (the Canadian equivalent of state governors) are arguing vociferously for a “Made in Canada” approach to reducing greenhouse gases. At Canada’s environmental pressure groups, such as Greenpeace and the David Suzuki Foundation, the rhetorical dogs have slipped their leashes. The daily papers are full of exhortations to Chrétien to fulfill his ratification pledge, and vilification of anyone who dares to oppose ratification. One pressure group has gone so far as to brand Kyoto opponents as “environmental criminals” simply for speaking in opposition.

Meanwhile, discussions about the impact of Canadian Kyoto ratification on the United States are not common. Such discussions would imply that Canadians care about such things, an implication anathema to many Canadians whose primary sense of identity is that they’re “not Americans.” But Canadian ratification of Kyoto has both positive and negative implications for the United States. On the positive side, after the economic impacts start to materialize, the United States can expect an influx of Canadian businesses relocating southward, bringing jobs and revenue with them. As Canada’s economy suffers, the flight of Canada’s most productive businesspeople and entrepreneurs is likely to accelerate as well. Canada’s competitive self-mutilation would decrease its competitive ability, taking some competitive pressure off American firms internationally. With Canada’s already-low dollar, Canadian businesses could be up for grabs at fire-sale prices in the post-ratification economy.

On the negative side, Canada’s ratification will hurt American efforts to avoid ratification itself, and will be used by the international community as a moralistic baseball bat, casting America as Goofus to Canada’s Gallant. Canadian ratification makes it more likely that the Protocol, which requires a certain number of national signatories in order to “come into force” internationally, might be brought into force through the ratification of many small countries, even without the agreement of America or China. Such a situation could force President Bush to formally withdraw the signature of the U.S. from the Kyoto Protocol, a diplomatic move that would almost certainly spark a festival of international America bashing, making it harder for the United States to gain international cooperation in the War on Terrorism and other international endeavors. Finally, America imports a massive amount of its energy from Canada (nearly 27 percent, according to the U.S. Energy Information Administration) as well as virtually all of its natural gas. Canada also exports electricity to the United States, supplying one percent of America’s electricity needs, and 14 percent of gross crude oil imports. As Kyoto is likely to negatively impact energy exports, America’s energy security could be compromised.

Under Canada’s system of government, nothing can stop Prime Minister Chrétien from ratifying Kyoto if he’s intent to do so – despite recent parliamentary maneuvering, Chrétien has nearly dictatorial powers when it comes to setting federal policy. But one thing is for sure: though Canadian ratification of the Kyoto Protocol would have little impact on the heat of the planet, it has cranked up the heat in Canada’s political atmosphere that may simmer for years.

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