Canada to review Kyoto Protocol implementation policies

Washington, DC (Platts Emissions Daily)--26Jan2006

The newly elected, Conservative-led Canadian government has launched a broad 
review of the country's policies to implement the Kyoto Protocol, government 
officials said Wednesday.

Although climate change policies under the Kyoto treaty are not a top priority
for the new Conservative Party government, Carolyn Stewart-Olsen, a
spokeswoman for Prime Minister-elect Stephen Harper, told Platts the
government was reviewing what it viewed as a set of inadequate measures
crafted by Environment Canada under departing Prime Minister Paul Martin.

"The Liberals never did anything" meaningful on implementing the climate
change treaty, she said. "We are looking at everything," she quickly added.
"We don't have any faith [in the Kyoto accord]. We think it's going to be
expensive and will not make a big difference in the environment."

Despite the Conservative rhetoric on Kyoto, emissions market experts said they
do not think the new government will back out of the treaty or completely
scrap the greenhouse gas market rules that Environment Canada began under the
Martin regime.

Doug Russell, technical director at the asset management firm Natsource, said
his personal opinion is that the Harper government will delay these rules
between four and six months with a climate change policy review.

That's because the Conservatives captured only 124 of 308 seats in the House
of Commons in nationwide elections Jan 23, more than any other party but not
enough seats to win a mandate for governing. Consequently, Harper will have to
form a coalition government with the outgoing Liberal Party and the New
Democratic Party, Russell said. The Liberals and NDP officials are ardent
supporters of the treaty.

The climate policy review could change government policies, Russell said. "I
think you will ultimately see policies that push domestic [emissions] offsets
more and give the energy industry in Alberta more flexibility."

Oil- and gas-rich Alberta, the Conservatives' political base and the province
where Harper is from, is largely responsible for Canada's economic boom since
2000 and the new government is loathe to slow that down, Russell said. That
could mean easing the emissions reduction burden on the oil and gas industry
or other measures, he said. The growth in Alberta oil production has helped
push the economy and GHGs 23% above 1990 levels.

In order to meet its Kyoto target of 6% below 1990 levels, Canada has to cut
its current annual emissions by nearly 300-mil mt, the bulk of which the
Liberals had planned to seek in the international carbon market.

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