They’ll be back to the drawing board in the fall because there’s little chance pegging emissions reductions to 2006 levels (as opposed to Kyoto’s 1990 standard) and establishing intensity-based targets (versus Kyoto’s quantity measurements) will become law.

Although Member of Parliament Bill Casey of Nova Scotia voted against his own party’s budget after the second of three readings before Parliament, the Bloc Quebecois and the other Conservatives banded together to virtually guarantee that legislation’s ultimate passage. (That means the proposed tax on distributions will now be law; we’ll have more on this issue in next week’s Maple Leaf Memo.) Now that he’s won that fight, Harper is likely to prorogue the current parliamentary session rather than watch the Liberal-controlled Canadian Senate pass a House of Commons private member’s bill that would move Canada’s Kyoto Protocol commitments from “best intentions” to “legal obligations.”

(Casey, by the way, got booted from the Conservative caucus.)

Canada’s Liberal Senate majority is threatening to sit through the summer in order to pass the private member’s Kyoto bill in response to Conservative movements, indicating a filibuster. Liberal Senate Leader Celine Hervieux-Payette described a subamendment to the bill introduced by the Conservatives as an indication the government wants to drag out the debate on the bill until Parliament adjourns as scheduled later in June.

The private member’s bill passed the Commons with support from all opposition parties in February. It would force the government to establish regulations that would follow carbon-dioxide emissions reductions as described in the Kyoto Protocol.

The Conservatives’ Regulatory Framework for Air Emissions—introduced April 26 for public consumption as “Turning the Corner: An Action Plan to Reduce Greenhouse Gases and Air Pollution”—is touted as the first-ever attempt to “force industry to reduce greenhouse gases and air pollution.”

It contains “mandatory and enforceable reductions in emissions and air pollutants” and a commitment to reduce Canada’s total emissions of greenhouse gases by 20 percent of 2006 levels by 2020.

Regarding greenhouse gases, the government hopes to establish short-term emission-reduction targets that will take effect in 2010. For existing facilities, the emission-intensity target for each sector (electricity generation, oil and gas, forestry, smelting and refining, iron and steel, some mining operations, cement, lime and chemical production) is targeted at 6 percent improvement each year from 2007 to 2010. The initial enforceable reduction will be 18 percent from 2006 levels by 2010. After 2010, the government plan will require a 2 percent improvement each year for a total industry reduction of 26 percent by 2015.

Companies will have several options to meet their required targets. They can: reduce their emissions through abatement; contribute to a technology fund that will invest in new emissions-reduction technology; use emissions trading; or use a one-time recognition of early action for companies that took measurable action between 1992 and 2006.

National caps will also be set for air pollutants of concern: nitrogen oxide (40 percent reduction from 2006 levels); sulphur oxide (55 percent); volatile organic compunds (45 percent); and particulate matter (20 percent). Limits will also be set for other air pollutants such as mercury from electricity generation and benzene emissions from natural gas, and iron and steel sectors. These targets will be enforceable as of 2012. Companies can also meet their requirements via abatement or trading of nitrogen-oxide and sulphur-oxide credits.

But it’s not going to pass. One of the consequences of prorogation is that all legislation pending before the Senate as well as the House of Commons is dead; Harper will spike Bill C-288 in the Senate and his government’s environment plan in the Commons.

Harper will open a new session with the same Parliament membership in October. Prorogation doesn’t dissolve the government and won’t require new elections; it’s basically a do-over for Canada’s self-styled New Government

What will the New, New Government have to say about emissions?

Harper characterizes Canada as a high-growth economy with a rapidly expanding population, similar in many ways to emerging economies—think China—that are angling for special treatment within whatever system the United Nations (or the Group of 8–G-8–or the top 15 polluting nations) eventually implement. “It’s impossible to realistically implement any emission control program unless you take into account of the national economic circumstances of the country,” Harper said.

The focal point of media discussion and political criticism is Alberta’s oil sands. To accommodate the industry’s growth, the Conservatives would use intensity-based targets to govern allowable emissions. Those targets, which mandate cuts on a per-barrel-produced basis rather than fixed goals, will cut emissions by 20 percent per barrel from 2006 levels by 2020. 

Harper has said he didn’t consult President Bush before the April 26 rollout of his emissions framework, and he denied consulting with the US leader in advance of this week’s pre-G-8 emissions kerfuffle.

Whether the two North American heads of state talked on the issue is irrelevant. The timing and similarity of the recent pronouncements—Harper’s legislative package and accompanying PR blitz, Bush’s public acceptance of certain Kyoto elements and commitment to new global negotiations—amply illustrate a meeting of the minds.  

The Alberta oil sands hold the largest pool of oil reserves outside the Middle East; resource extraction–drilling, mining, infrastructure–is a critical part of Canada’s economy. Alberta, a bastion of Canadian conservatism, added nearly 26,000 jobs in resource extraction during 2005-06, driving the province’s unemployment rate down to 3.1 percent, a 30-year low, according to the government. For the first time, every Albertan received a CD400 (USD340) check from the government earlier this year from an unexpected fiscal surplus.

Oil sands projects are large, use considerable amounts of energy–particularly natural gas–and release both gaseous and particulate emissions into the atmosphere. Oil sands processes have become more efficient and have reduced greenhouse gas emissions per unit of production, but an increase in output could lead to an increase in total emissions. Producing one barrel of oil from oil sands emits three times more greenhouse gases than from conventional light or medium crude oil. The extra emissions are due to the use of natural gas used to separate the bitumen from the sand and to upgrade it to synthetic oil.

Oil sands production is expected to triple to meet growing global demand. The Conservatives’ framework doesn’t set out any overall emissions caps, so companies can continue to increase production; their emissions can also go up as long as they maintain those intensity levels.

New oil sands projects will face a traditional environmental assessment process and then will have three years before they must begin reducing their emissions. The new plan seeks to balance the environmental goals with the needs of a growing economy.

In the days ahead of the official G-8 meeting in Germany, Harper said that Canada’s short-term targets for cutting greenhouse gas emissions are more ambitious than those imposed by the European Union (EU), widely considered the leader in the developed world at tackling climate change. Harper has been selling Canada’s green plan hard this week, and his diplomatic overtures have so far been politely received in Europe. He told German business leaders that Canada’s plan could be used as a model for other growing or developing countries.

The EU agreed in March to reduce greenhouse gas emissions to 20 percent below 1990 levels by 2020. Canada has also pledged to cut emissions by 20 percent by 2020, but it uses a base year of 2006 rather than the 1990 baseline set by Kyoto, which Canada and 172 other countries have ratified. Canada’s targets could produce a greater reduction in emissions in the next 13 years than in Europe if you base it on 2006 levels.

Emissions can be limited by an absolute cap on the quantity of emissions or by some maximum allowable intensity relative to some measure of output or input, such as the number of cars or refrigerators purchased by consumers, the amount of energy input required by some production process or even GDP.

Cap-and-trade systems limit emissions to some prespecified absolute quantity. Intensity-based limits restrict emissions to some prespecified rate relative to input or output.

Both quantity or intensity limits may be voluntary in the sense of expressing a sincere aspiration and good-faith intent; either may be mandatory in the sense that well-defined sanctions will follow nonattainment of the limit.

Intensity versus quantity, 2006 versus 1990: Those debates will frame the next round of negotiations President Bush committed to, and with a little help from Prime Minister Harper, it looks as though “intensity” and “2006” have more traction.