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For release: March 27, 2008

New Loopholes in Federal Climate Plan will allow Oil Sands Emissions to Increase


Ottawa - Major new loopholes in the federal government's climate change plan will allow greenhouse gas emissions to grow and lets the polluting oil sands industry off the hook by delaying emission reductions for a decade, say representatives of the Climate Action Network Canada-Réseau action climat Canada, based on a new analysis from the Pembina Institute.

“At a time when Canada should be getting tough on major polluters, the country is going in the opposite direction,” said Arthur Sandborn, Greenpeace Canada. “We need absolute caps on emissions and mandatory targets for the industrial sector that come into effect now, not 10 years down the road.”

Earlier this month, the government updated its proposal for regulating the greenhouse gas emissions created by large industries. The federal government claims new measures in the regulatory framework show it is getting “tough” on industrial pollution.

“The new measures give new oil sands facilities close to a free ride for the next decade, and, when combined with new loopholes that the government has introduced, likely result in an even weaker framework than it proposed a year ago,” said Clare Demerse, Pembina Institute, an author of the analysis.

One of the federal government's new measures is to set targets based on carbon capture and storage (CCS) for oil sands starting operations that come on stream after 2011 - an obligation that won't come into effect until 2018.

The government's own projections show that its timeline for CCS targets will allow oil sands companies to nearly triple their emissions by 2017 before dropping once the new targets take effect in 2018. And by exempting facilities that start up before 2012 from these targets, the federal government's timeline actually creates an incentive for companies to bring new oil sands facilities on stream more quickly to “beat the deadline” and avoid the CCS targets altogether.

Canada is also presenting misleading information to the international community. In documents submitted to the UN, the Government of Canada states that “Canada will require new oil sands facilities and coal-fired power generation plants to put in place large-scale carbon capture and storage and other green technologies,” leaving out the fact that there is no “requirement” (only targets based on CCS); that facilities starting up before 2012 are exempt; and that the CCS-level targets will only be applied starting in 2018.

“If the federal government put half as much effort into implementing real solutions that actually reduce emissions as it did into creating delay tactics and misleading communications strategies, we'd be well on our way to reducing our emissions,” said Emilie Moorhouse, Sierra Club of Canada.

Other weaknesses of the regulatory framework include:

• The use of intensity targets instead of absolute caps on industrial pollution. Intensity targets allow emissions to increase if production grows rapidly. (Canadian emissions grew 25% from 1990 to 2005, in spite of intensity decreases of 17% over the same period.) A better solution would be to regulate absolute emission reductions through a cap-and-trade system, or to charge a carbon tax high enough to significantly reduce emissions.
  
  
• The use of a Technology Fund, which allows emitters to meet their targets on paper by making payments to the federal government rather than reducing their emissions.
  
  
• The use of 2006 as a base year for calculating targets. The federal government plans to cut emissions 20 per cent below 2006 levels by 2020. However, when converted to the internationally-recognized base year of 1990, Canada's target is actually about 2% above the 1990 emission level. This leaves Canada far short of doing its fair share in the global effort to prevent dangerous climate change.
  
  
• New “corporate” targets for the electricity sector open the door to double-counting. In the case of Ontario's coal-fired power plants alone, these new targets could weaken the system by 20 million tonnes a year after 2014.
  

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