Canada to ignore pressure for deeper emission cuts

on December 16 2009 11:42 AM

OTTAWA/CALGARY - Canadian Prime Minister Stephen Harper is likely to ignore pressure to adopt tougher emissions targets this week, preferring instead to let the United States craft a North American climate change policy.

And, depending on what Washington decides, Canada might even end up diluting its own plan for cutting emissions, further raising the ire of environmentalists.

Green groups regularly portray Canada as the dirty man of the world, citing its soaring emissions and refusal to clamp down on a booming oil industry. Last month British green activist George Monbiot wrote that Canada was becoming a corrupt petro-state.

But as Harper prepares for U.N. climate change talks in Copenhagen on Thursday and Friday there is no sign of any meaningful change in the stance of the minority Conservative government, which draws major support from Canada's western oil-producing region.

Canada also happens to be the largest single supplier of oil and natural gas to the United States. And Ottawa has clearly concluded that as long as it can keep Washington onside, there is no reason to detail how it plans to cut emissions by a promised 20 percent from 2006 levels by 2020.

Environment Minister Jim Prentice says Ottawa has to wait for the United States to outline its own plans for emission cuts and a proposed cap-and-trade system.

If we do more than the United States, we will suffer economic pain for no real environmental gain, he said. But if we do less, we will risk facing new border barriers into the American market.

One option being discussed in Washington would allow energy-intensive so-called trade exposed industrial sectors to initially cut emissions by less than other sectors.

Prentice made clear that if the United States did go down this path, Canada would have to follow suit.

The Canadian Broadcasting Corp said this week it had obtained a copy of a draft cabinet policy document that suggested the energy sector be allowed to cut emissions at a lower rate. Prentice said he had not seen the document.

Even before the CBC report, environmentalists had predicted the government would try to drag its feet on the issue.

This is all a game of delay. The more they wait the less they'll have to do, and there's no significant risk to them in terms of alienating their base, said Dale Marshall of the David Suzuki Foundation, a green activist group.

In theory, Canada's weakest spot is its increasing reliance on the vast oil sands of northern Alberta, where huge mining operations and upgrading refineries emit millions of tonnes of greenhouse gases each year.

Although some U.S. critics have suggested banning imports of the so-called dirty oil from these operations, Canada says the United States cannot survive easily without the oil sands.

Natural Resources Minister Lisa Raitt noted in a recent New York speech that the other major suppliers of oil to the United States include Saudi Arabia, Iran, Iraq, Kuwait and Venezuela.

Without the oil sands, the pursuit of North American energy security would be an entirely different ball game, she said. The Obama administration conceded the same point in August when it approved the construction of a pipeline to carry oil sands oil from Alberta.

One reason given was increasing the diversity of available supplies ... in a time of considerable political tension in other major oil producing countries.

The language reflects official thinking in Canada, which positions itself as a unique energy superpower.

No one has the capacity for growth in its energy sector in the way that Canada does. So we have an emissions footprint that reflects those realities and we will need targets and public policies that reflect those realities, Prentice told Reuters in an interview.

For its part, the powerful energy lobby seems relaxed about what to expect from Ottawa and the Copenhagen talks.

We don't want a cost burden imposed on our industry that's misaligned with that of our competitors, said David Collyer, president of the Canadian Association of Petroleum Producers.

We certainly see no indication from the federal government in their public commentary around policy that that will be the case, he told Reuters.

Although polls show most Canadians want the government to do more to fight climate change, there is little sign yet that issue has major domestic political consequences.

The oil industry is largely concentrated in the western provinces of Alberta and Saskatchewan, where the Conservatives hold 40 of the 42 available parliamentary seats.

The leader of the main opposition Liberal Party, which stands little chance of winning power without at least some of these seats, has frequently praised the oil sands.

Ottawa says critics do not understand the unique challenges facing any government in Canada, where just 33 million people are spread through the world's second largest nation.

We are ... subject to climatic extremes, hot weather and particularly cold weather, and we have an industrial base that is very much focused on primary industry, Prentice said.

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