Too many holes in Liberals’ Kyoto plan

With the federal government's recently announced package for dealing with climate change, the Liberals are hoping to spend their way toward meeting Canada's commitments under the Kyoto Accord. The $1.7-billion plan includes incentives for installing energy-efficient technology in homes and commercial buildings, money to encourage people and businesses to switch to cleaner fuels, as well as $100-million to build ethanol plants.But absent from the package is any hint of regulation, or the removal of subsidies for polluting industries. Consistent with Prime Minister Jean Chretien's promise to the oil and gas industries that they will not have to spend any significant sums to reduce greenhouse gas emissions, the plan includes added subsidies to the oil industry to encourage cleaner extraction and refining, especially for the Alberta Tar Sands project, a highly polluting endeavour that is already marinating in subsidies from various levels of government.Reducing emissions from cars is perhaps the biggest air pollution challenge. The average car spews four tonnes of carbon a year, and driving is the leading cause of smog. It is also one of the easiest areas to achieve pollution reductions, since inexpensive technology already exists and is being used in hybrid and other energy efficient vehicles.But more efficient cars are smaller cars, with lower profit margins. More importantly, they consume less gas, so oil companies have aggressively fought legislative efforts to encourage fuel efficiency.Shortly after the 1973 oil embargo, the United States passed the Corporate Average Fuel Efficiency (CAFE) standards, requiring auto manufacturers to make more fuel-efficient cars or else face fines. The standards have resulted in fuel efficiency climbing from nine miles to the gallon in 1975 to 20 miles per gallon by 1990.Today, the standards are not as strong as they should be, largely because U.S. industry lobbying has forestalled upgrading the standards. In addition, because the fines for failing to meet the standards are too low, some companies simply view the fines as a cost of doing business. The standards have been further undermined by the exclusion of gas-guzzling SUVs from the law. (Auto-makers exploit a loophole that allows them to consider SUVs as trucks instead of cars that are subject to the standard.)However, CAFE standards do offer a proven legal mechanism to encourage reductions in air pollution from cars, and many Canadian environmentalists wish our government would pass a similar law.And actually, they did. In 1981, Parliament passed Canada's own version of CAFE, the Motor Vehicle Fuel Consumption Standards Act. The act passed both the House and the Senate, but while it waited for the Governor General's signature, industry launched a remarkably successful last-minute lobby. To stall the GG's signature, they made a voluntary agreement with the government to make more efficient cars, but with no penalties for failing to do so.Internal Transport Canada documents show how poorly the auto companies have complied with the voluntary agreement. A discussion paper last year noted, "the voluntary fuel consumption program has been subject to a number of deficiencies including the failure of some vehicle manufacturers to submit fuel consumption data to Transport Canada. Furthermore, there has been a failure on the part of certain manufacturers to meet the annual fuel consumption target."Nonetheless, the act is still collecting dust on the GG's desk.With the federal government's recently announced package for dealing with climate change, the Liberals are hoping to spend their way toward meeting Canada's commitments under the Kyoto Accord. The $1.7-billion plan includes incentives for installing energy-efficient technology in homes and commercial buildings, money to encourage people and businesses to switch to cleaner fuels, as well as $100-million to build ethanol plants.But absent from the package is any hint of regulation, or the removal of subsidies for polluting industries. Consistent with Prime Minister Jean Chretien's promise to the oil and gas industries that they will not have to spend any significant sums to reduce greenhouse gas emissions, the plan includes added subsidies to the oil industry to encourage cleaner extraction and refining, especially for the Alberta Tar Sands project, a highly polluting endeavour that is already marinating in subsidies from various levels of government.Reducing emissions from cars is perhaps the biggest air pollution challenge. The average car spews four tonnes of carbon a year, and driving is the leading cause of smog. It is also one of the easiest areas to achieve pollution reductions, since inexpensive technology already exists and is being used in hybrid and other energy efficient vehicles.But more efficient cars are smaller cars, with lower profit margins. More importantly, they consume less gas, so oil companies have aggressively fought legislative efforts to encourage fuel efficiency.Shortly after the 1973 oil embargo, the United States passed the Corporate Average Fuel Efficiency (CAFE) standards, requiring auto manufacturers to make more fuel-efficient cars or else face fines. The standards have resulted in fuel efficiency climbing from nine miles to the gallon in 1975 to 20 miles per gallon by 1990.Today, the standards are not as strong as they should be, largely because U.S. industry lobbying has forestalled upgrading the standards. In addition, because the fines for failing to meet the standards are too low, some companies simply view the fines as a cost of doing business. The standards have been further undermined by the exclusion of gas-guzzling SUVs from the law. (Auto-makers exploit a loophole that allows them to consider SUVs as trucks instead of cars that are subject to the standard.)However, CAFE standards do offer a proven legal mechanism to encourage reductions in air pollution from cars, and many Canadian environmentalists wish our government would pass a similar law.And actually, they did. In 1981, Parliament passed Canada's own version of CAFE, the Motor Vehicle Fuel Consumption Standards Act. The act passed both the House and the Senate, but while it waited for the Governor General's signature, industry launched a remarkably successful last-minute lobby. To stall the GG's signature, they made a voluntary agreement with the government to make more efficient cars, but with no penalties for failing to do so.Internal Transport Canada documents show how poorly the auto companies have complied with the voluntary agreement. A discussion paper last year noted, "the voluntary fuel consumption program has been subject to a number of deficiencies including the failure of some vehicle manufacturers to submit fuel consumption data to Transport Canada. Furthermore, there has been a failure on the part of certain manufacturers to meet the annual fuel consumption target."Nonetheless, the act is still collecting dust on the GG's desk.Jim Fulton, now executive director of the David Suzuki Foundation, was an NDP MP during Parliament's debate on the Standards Act. "The legislation passed by a large majority," he recalls, "but five prime ministers in a row have not given royal assent to a democratically passed piece of legislation," said Mr. Fulton"If you can lower someone's gas bill over a year, the consumer says thank you very much, and from a human perspective, fewer people will die from air pollution," he adds. "But certain powerful interests - especially the oil industry - don't want efficiency standards."The government's Kyoto plan calls for a 25 per cent increase in automobile fuel efficiency, but the plan is not clear on how this target will be obtained."Money is critical for reaching our Kyoto targets, but we can't spend our way out of this crisis," says Fulton. "Regulation has to supplement financial incentives."However, the government's preferred mechanism appears to be voluntary agreements with auto manufacturers. Not surprisingly, there are no plans to make the Motor Vehicle Fuel Consumption Standards Act law.Aaron Freeman is a founding board member of Democracy Watch. The opinions expressed are his own.The Hill Times

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Too many holes in Liberals’ Kyoto plan

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