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UNCLAS SECTION 01 OF 08 OTTAWA 000795 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
DEPARTMENT FOR WHA, OES, EB 
PARIS ALSO FOR USOECD 
EPA FOR OFFICE OF THE ADMINISTRATOR AND INTERNATIONAL 
AFFAIRS 
DOE FOR POLICY AND INTERNATIONAL AFFAIRS 
WHITE HOUSE FOR CEQ 
 
E.O. 12958: N/A 
TAGS: SENV ENRG CA
SUBJECT: TURNING THE CORNER - CANADA'S NEW REGULATORY 
FRAMEWORK FOR EMISSIONS 
 
REF: A. 06 OTTAWA 3182 
 
     ¶B. 06 OTTAWA 3423 
     ¶C. 07 OTTAWA 0627 
 
This message is Sensitive but Unclassified.  Please protect 
accordingly. 
 
Summary 
------- 
¶1. (U) Saying "the time has come for action," Environment 
Minister John Baird released the government's long-awaited 
"Turning the Corner" plan, its framework to regulate 
emissions of greenhouse gases and air pollutants, in Toronto 
on April 26.  The plan's targets will force significant 
action by Canada's main industry sectors:  Mandatory targets 
will require industry to reduce the intensity of GHG 
emissions by 18 percent (from current levels) by 2010 and a 
further 2 percent annually thereafter.  The plan sets 
nationwide caps for air pollutants (NOx, SOx, VOCs, and PM, 
as well as for mercury and benzene from some applications) 
that will see emissions of these pollutants fall from current 
levels by 20 percent (for PM) to 55 percent (for SOx) by 
¶2015.  The plan allows for several mechanisms industry can 
use to meet targets, ranging from own action to emissions 
trading (domestic, but Canada will actively explore 
opportunities with the U.S. and individual states) to the 
Kyoto Protocol's Clean Development Mechanism to payments 
(initially at the rate of C$15 per tonne of carbon) into a 
technology fund.  In making the announcement, Baird stressed 
other initiatives, such as reducing emissions from 
transportation and stricter efficiency standards for 
appliances, will continue to be important elements in 
Canada's overall climate change strategy. 
 
¶2. (U) Baird noted the new plan will impose significant costs 
on the Canadian economy, estimating it may cost up to C$8 
billion and cut up to 0.5 percent off GDP in its costliest 
years.  However, he said the plan will yield C$6 billion in 
health care savings annually by 2015, widely benefit the 
environment, and present opportunities for long-term economic 
gains primarily deriving from investments in technology. 
 
¶3. (U) Reaction from opposition parties was swift and 
unanimous:  Green Party leader Elizabeth May called it a 
"climate disaster plan," and other leaders and environment 
critics voiced similar views.  Environmental groups were 
harsh in their own criticism, bemoaning along with the 
political opposition the plan's final rejection of Kyoto 
Protocol targets for GHGs.  (Baird estimated Canada will meet 
the Kyoto target of cutting emissions by 6 percent from 1990 
levels, but not until 2025.)  Al Gore's comment (in response 
to an question from a Toronto audience) that the Plan was 
"fraud" prompted a swift retort from Baird and an offer to 
brief the former-VP on the Plan's specifics.  Reaction from 
industry groups seemed less strident, though most called the 
targets aggressive, "difficult to meet," and more ambitious 
than those proposed by the Liberal government in 2005.  In 
fact, Baird seemed largely unbothered, noting in 
post-announcement interviews that criticism from opposite 
ends of the interest spectrum had to be indication the plan 
was balanced. 
 
¶4. (SBU) The government had announced its intention to 
release a new regulatory framework for GHG and air pollutant 
emissions last October in its Notice of Intent to regulate, 
Qemissions last October in its Notice of Intent to regulate, 
and last week followed through with "Turning the Corner." 
Critics have charged the government with trying to rule on 
the environment by administrative decree rather than 
legislation, ignoring the fact that the government announced 
its intentions six months ago and already has the authority 
to regulate as outlined in the plan under the Canadian 
Environmental Protection Act of 1999.  Even if Turning the 
Corner makes good progress in establishing the Conservative's 
environmental credentials, such charges do highlight the 
continuing problem the government faces in what to do with 
the re-drafted Clean Air Act, the Kyoto Protocol 
 
OTTAWA 00000795  002 OF 008 
 
 
Implementation Act already passed by the House and awaiting 
Senate action, and another similar bill in the House, none of 
which the government wishes enacted.  With the odds on an 
early election getting longer, speculation is now shifting to 
the possibility the government might clear the legislative 
calendar by proroguing parliament. 
End Summary. 
 
Contents 
-------- 
Summary and Introduction                  paras 1-4 
Early Tory efforts on climate change      paras 5-9 
Pre-announcement drama              paras 10-11 
Emission targets for industry       paras 12-15 
Compliance mechanisms               paras 16-18 
Other Plan elements                       paras 19-21 
Costs and benefits                        paras 22-23 
Opposition, ENGO reaction                 paras 24-26 
Industry reaction                   paras 27-28 
Kyoto stance                              para 29 
The way forward                     paras 30-31 
Emissions statistics                      paras 32-33 
 
 
A Long and Winding Road 
----------------------- 
¶5. (U) Stephen Harper and his Conservative Party campaigned 
on a platform that did not include climate change, and when 
his government took power in early February 2006, its stated 
focus was on law and order, health care, and tax breaks for 
the middle class.  In March Environment Minister Rona Ambrose 
went so far as to state publicly "...the Kyoto accord is 
seriously flawed and the emissions targets it imposes on 
Canada are unrealistic and unattainable."  Throughout the 
spring of 2006, opposition parties and the environmental NGO 
community railed against the government's lack of interest in 
climate change, but action in parliament produced only a 
private member's bill, the Kyoto Protocol Implementation Act 
(C-288), that would force the government to comply with 
Canada's Kyoto Protocol obligations, if enacted. 
 
¶6. (U) Introduced in mid-May 2006, C-288 proposed a 
compressed timetable to "ensure Canada takes effective and 
timely action to meet its obligations under the Kyoto 
Protocol."  The bill would have authorized a cap-and-trade 
system with limits on permits to emit GHGs.  It easily passed 
its first and second readings and was sent to committee just 
before the summer recess.   With C-288 galvanizing the 
opposition, and public opinion polls showing concern for the 
environment was a top-of-mind issue, the Tories began giving 
greater prominence to the climate change and environment 
files by early summer and repeatedly promised that a "Made in 
Canada" plan to address climate change and air pollution 
would soon be unveiled. 
 
¶7. (U) But it was not until October 19, 2006, that Rona 
Ambrose introduced the government's "Clean Air Act," Bill 
C-30, into the House (ref A).  Opposition reception was 
extremely chilly, with NDP leader Jack Layton pointedly 
characterizing the bill as a "Xerox copy of a 
made-in-Washington solution, delayed."  Environmental groups 
also reacted with dismay, with the Sierra Club calling it 
mostly "smoke and mirrors."  On the other hand, business 
groups were largely relieved.  The Canadian Chamber of 
Commerce applauded the Clean Air Act's movement away from 
QCommerce applauded the Clean Air Act's movement away from 
"unrealistic short-term Kyoto targets" to "more practical 
medium- and long-term targets...which will ensure that Canada 
takes the time to make the right decisions and that companies 
have time to develop, implement and commercialize new 
technologies." 
 
¶8. (U) In fact, the Clean Air Act proposed a number of new 
initiatives and approaches (such as mandatory nation-wide 
regulation of air pollutants, greatly expanded efficiency 
standards for appliances, and mandatory intensity-based 
targets for GHG emissions) for Canada.  At the same time the 
 
OTTAWA 00000795  003 OF 008 
 
 
government issued a Notice of Intent to Regulate, which 
announced plans for the administrative measures it would use 
to regulate emissions of GHGs and air pollutants and 
promising targets would be issued in early 2007. 
(Importantly, the bulk of the measures the government 
contemplated in the Clean Air Act and the Notice of Intent 
depended for their legislative authority not on the new Act, 
but on the existing Canadian Environmental Protection Act.) 
But from the standpoint of the opposition and environmental 
groups, it failed the litmus test: it ignored Kyoto and 
seemed to pay more attention to air pollution than climate 
change. 
 
¶9. (U) Shortly after its introduction, NDP leader Layton 
engineered referral of the bill to an ad hoc House committee 
for re-drafting (ref B), and the committee (on which Tories 
were in the minority) began revising the Act in January 
(about the same time John Baird replaced the ineffective Rona 
Ambrose as Environment Minister).  On March 30 it emerged, 
now emphasizing hard caps for reducing greenhouse gas 
emissions and penalties for non-compliance (ref C).  It came 
as no surprise that the government opposed the changes, but 
since it controlled the parliamentary calendar, the bill has 
not been re-submitted to the House for a final vote.  The 
fate of C-288, the Kyoto Protocol Implementation Act, is a 
bit more certain: the bill is now before the Senate Energy 
and Environment Committee.  It was, in fact, at that 
Committee's hearing on C-288 just two weeks ago that Baird 
announced his apocalyptic vision of the costs of implementing 
C-288 and meeting Kyoto. 
 
Laying the Groundwork 
--------------------- 
¶10. (SBU) Release of the "Turning the Corner" framework and 
emissions targets had been promised in the Clean Air Act and 
the Notice of Intent and expected for months.  Many observers 
thought March, or early April, and John Baird himself had 
been saying for sometime the announcement would happen in 
"coming weeks."  But by last week, Embassy began picking up 
increasing signs that the long-promised announcement was 
imminent.  Baird's presentation on April 19 to the Senate 
committee considering C-288 of the economic modeling study 
demonstrating very hefty costs to the Canadian economy of 
meeting Kyoto commitments was the final clue.  The estimated 
impacts (GDP down by 4 percent and 275,000 jobs lost, for 
example) were so dire, the study's major usefulness could 
only have been to set up an announcement of the government's 
own targets, whose economic costs would appear much more 
manageable in comparison. 
 
¶11. (U) All question as to whether the targets would be 
released last week was resolved when a draft of John Baird's 
speech announcing them was accidentally faxed to the House 
opposition lobby late on April 24.  Liberal environment 
critic David McGuinty told hastily assembled press that he 
could not reveal details under threat of prosecution, but he 
did describe the plan as potentially market-moving. 
Environment Canada essentially confirmed the fax was 
authentic by posting the text of Baird's speech late that 
night.  As promised, Baird made his announcement in Toronto 
Qon the 26th, though the circumstances were unusual.  After 
Tuesday's misstep, the government went to extraordinary 
lengths to control the official release of the actual plan. 
Separate segregated briefings for the media, business, and 
environmental groups were held in different locations, and 
the groups were locked in briefing rooms from noon to 4 pm, 
with no outside electronic access.  Observers noted that 
security for the announcement rivaled that traditionally put 
in place for release of the federal budget, even though many 
details of the plan were already known. 
 
The Plan Says -- on Emissions Targets... 
---------------------------------------- 
¶12. (U) The government proposed its basic regulatory approach 
last October in its "Notice of Intent to Develop and 
Implement Regulations and Other Measures to Reduce Air 
 
OTTAWA 00000795  004 OF 008 
 
 
Emissions," which in essence described the mechanisms by 
which the government intended to implement its Clean Air Act 
(ref A).  Among the elements in the Notice of Intent, the 
government promised action on greenhouse gases and air 
pollutants, and stressed that its regulatory framework for 
both classes would depend for legislative authority largely 
on the Canadian Environmental Protection Act (1999), rather 
than the Clean Air Act itself.  In the Notice, the government 
also announced that it would develop targets for emissions of 
greenhouse gases and air pollutants based on consultation, 
with provinces, territories, aboriginal peoples, and other 
stakeholders on the overall framework, and then with industry 
sectors on the specific targets for those sectors. 
 
¶13. (U) The document released April 26, the Regulatory 
Framework for Air Emissions (the central element, really, of 
Turning the Corner) largely addresses air emissions from 
industry, which account for around half of Canada's 
emissions, with a view to stabilizing GHG emissions by 2010 
and cutting emissions of air pollutants by up to 55 percent 
(from current levels) by 2012.  Under the Framework, the 
government will apply short term targets for emissions of 
both classes to the following sectors: thermal power 
generation; oil and gas; forest products; smelting and 
refining (including aluminum and alumina); iron and steel; 
cement, lime, and chemicals production; and some mining. 
Final consultations with stakeholders on sector-specific 
provisions will conclude by the end of this year, and 
specific draft regulations will be gazetted in early 2008. 
 
¶14. (U) In his announcement, Baird called targets for 
industry "concrete and challenging, yet realistic."  In terms 
of the specifics for reducing GHG emissions, the Plan 
requires affected industries to reduce the intensity of their 
GHG emissions by 18 percent from current levels by 2010, and 
by a further 2 percent per year from 2011 to 2015.  The 
government calculates these targets will lead to an absolute 
reduction in GHG emissions as early 2010 and by 2012 at the 
latest.  Over the medium-term the government estimates GHG 
emissions will fall from current levels by 20 percent by 
2020, and in the longer-term by up to 70 percent by 2050.  In 
justifying its intent to stick with intensity-based targets 
for GHGs, the government stresses that these will "allow 
(Canada) to reduce greenhouse gases now and prepare for 
deeper cuts later without de-railing Canada's economy." 
 
¶15. (U) For air pollutants, the government said Turning the 
Corner will introduce for affected industries fixed caps on 
emissions of nitrogen oxides, sulfur oxides, volatile organic 
compounds and particulate matter.  In some sectors, caps will 
also be introduced for other pollutants, such as mercury from 
thermal power generation and smelting, and benzene from the 
refining, natural gas, and iron and steel sectors.  The 
framework will provide an adjustment period for industry, and 
caps will not go into effect until 2012-2015.  The government 
intends to finalize the caps for specific sectors, as well as 
the exact date they will come into force by the fall of 2007. 
Qthe exact date they will come into force by the fall of 2007. 
 At the national level, the government expects the caps to 
force reductions from 2006 levels of around 40 percent for 
NOx, of around 55 percent for SOx, of around 45 percent for 
VOCs, and of around 20 percent for PM.  The Plan states the 
government is holding to its commitment in the Notice of 
Intent last fall to impose targets that "are at least as 
rigorous as those in the U.S. or other environmental 
performance-leading countries." 
 
...and on Mechanisms for Industry 
--------------------------------- 
¶16. (U) "Turning the Corner" provides industry a number of 
compliance mechanisms, ranging from own action to emissions 
trading to deposits into a climate change technology fund for 
non-compliers.  New facilities will be allowed a three-year 
grace period, but will have to employ best available clean 
fuel and technology standards and make 2 percent annual 
improvements thereafter (putting them on the same schedule as 
existing plant after 2010).  Firms will also be allowed a one 
 
OTTAWA 00000795  005 OF 008 
 
 
time credit (up to 15 megatonnes nationally and distributed 
among firms proportionally) for verified abatement actions 
taken between 1992 and 2006.  Industry will have access to 
domestic trading and domestic offsets, and firms can 
discharge up to 10 percent of their obligation with 
investments in Kyoto Protocol Clean Development Mechanism 
projects.  Additionally the government announced intent to 
actively explore possible linkages to potential GHG trading 
mechanisms in North America, including at sub-national 
levels.  The government says it would be willing to consider 
credit for participating in other emissions trading schemes 
globally in the future but that it will not purchase credits 
itself, domestically or internationally. 
 
¶17. (U) As for the technology fund, firms could meet a 
portion of their GHG reduction obligations by paying into the 
fund at the rate of C$15 per tonne of CO2 equivalent (between 
2010-2012) and at the rate of C$20 per tonne of CO2 
equivalent during 2013, after which the rate would increase 
annually at the rate of growth of nominal GDP.  Firms would 
be able to discharge up to 70 percent of their total 
obligation through such payments in 2010, but this limit will 
decline to zero by 2018.  While complete details remain to be 
finalized, based in part on further consultation with 
industry, the provinces and territories, the government 
expects the fund will be administered by a non-profit, 
non-governmental body and used principally to fund technology 
deployment and related infrastructure projects that have a 
high potential to reduce GHG emissions in the near-term, such 
as carbon capture and storage infrastructure in Alberta or an 
east-west electricity grid.  The fund may also help finance a 
limited amount of R&D on transformative technologies with 
payouts over the mid- to longer term.  Baird stressed that 
the fund will have no inter-province wealth transfer impacts 
and that payments into the fund will be used in the 
originating province or territory. 
 
¶18. (U) For emissions of air pollutants, the Plan will 
establish a Canada-wide cap and trade system for NOx and SOx 
only, even though caps will be put in place also for VOCs, 
PM, and mercury and benzene from some industrial 
applications.  The allocation of caps among facilities, as 
well as the exact date (between 2012 and 2015) the caps will 
come into effect will be determined in consultation with 
provinces, industry and other stakeholders in the coming 
months and announced, the government said, by June 2007.  In 
the Plan, the government stresses its intent to set targets 
"at least as rigorous as those in the U.S." and re-iterates 
the important role U.S.-Canadian cooperation, such as through 
the Air Quality Agreement, will play in addressing pollution 
issues in shared cross-border airsheds.  (In 2005 Canada and 
the U.S. completed a study under the Air Quality Agreement 
which suggested a cross-border cap and trade system for NOx 
and SOx could be feasible.)  For the other regulated air 
pollutants, the CEPA provides the government with several 
compliance and enforcement provisions, including 
administrative and judicial orders and prosecution, with 
Qadministrative and judicial orders and prosecution, with 
maximum fines of up to C$1 million per day. 
 
Also in the Portfolio 
--------------------- 
¶19. (U) "Turning the Corner" does not reserve all its focus 
for Canada's industrial sector: the Plan also emphasizes the 
government's commitment to addressing emissions from 
transportation, strengthening energy efficiency standards, 
and improving indoor air quality.  In addressing emissions in 
the transport sector (which contributes over 25 percent of 
GHG and air pollutant emissions) the Plan, for the first time 
in Canada, will impose mandatory fuel efficiency standards 
for cars and light trucks beginning with the 2011 model year, 
and the government says it wants to develop a "Clean Auto 
Pact" with the U.S. to harmonize standards for such vehicles. 
 More broadly, the government will in the future develop 
additional regulation to continue to align Canadian vehicle 
and engine regulations with U.S. standards for motorcycles, 
outboard engines, snowmobiles, all-terrain vehicles, on-road 
 
OTTAWA 00000795  006 OF 008 
 
 
heavy-duty engines, and off-road diesel engines.  (Canada 
originally passed a Motor Vehicle Fuel Consumption Standards 
Act in 1982, but it was never put in use.  Currently the auto 
industry is operating under the terms of a voluntary 
memorandum of understanding covering the period 2005-2010 
that commits the industry to reducing GHG emissions by 5.3 
megatonnes.  The government's regulatory approach under an 
amended MVFCSA will continue to use fuel efficiency standards 
as the mechanism for reducing emissions.)  Final regulations 
are expected to be in place by the end of 2008. 
 
¶20. (U) Consumer and commercial appliances will also have to 
become more efficient.  Amendments to the Energy Efficiency 
Act will institute efficiency standards for 20 presently 
unregulated products (such as vending machines, commercial 
refrigerators and freezers, commercial washers, traffic 
signals, residential furnaces, commercial boilers, and 
digital converter boxes) and strengthen standards for 10 
already regulated products (such as air conditioners and heat 
pumps, dishwashers, icemakers, residential refrigerators and 
freezers, and dehumidifiers) between 2007-2012.  Plus, the 
government will phase out the use of incandescent light bulbs 
in common applications by 2012.  (This measure was actually 
announced on April 25 by Baird and Natural Resources Minister 
Gary Lunn.) 
 
¶21. (U) The plan goes a bit further afield in committing 
Health Canada to develop guidelines and measures to improve 
indoor air quality, starting with the development of a 
priority list of indoor air contaminants.  The government 
also intends to issue regulations limiting the VOC content of 
architectural and industrial maintenance coatings, automotive 
refinishing coatings, and selected consumer products.  The 
government expects that reducing the VOC content of solvents 
(which account for 21 percent of urban VOC emissions in 
Canada) will provide scope for significant gains in reducing 
VOC emissions overall. 
 
Costs and Benefits 
------------------ 
¶22. (U) In making the announcement, Baird admitted there will 
be costs to the Canadian economy from implementing the Plan. 
These costs could amount to up to C$8 billion a year and 
knock 0.5 percent off Canada's GDP in the costliest years. 
However, Baird said, few jobs would be lost.  (This in 
comparison the costs of implementing C-288, the bill passed 
by the House to mandate adherence to Kyoto, which Environment 
Canada economic modeling estimated in a worst case scenario 
would slam Canadian GDP by over 4 percent and cost 275,000 
Canadians their jobs.) 
 
¶23. (U) On the other hand, Baird cited significant health 
benefits for Canadians, stemming largely from reductions in 
summer ozone levels (by 3 percent) and particulate matter (by 
8 percent) by 2015.  These reductions, said the minister, 
would eliminate 1200 premature deaths annually and save C$6.4 
billion annually in health costs.  There would of course be 
major benefits for the environment, according to Environment 
Canada modeling.  Agricultural production should benefit by 
at least C$123 million, and losses of fisheries stocks and 
forests to acid rain should be reduced.  Lower GHG emissions 
Qforests to acid rain should be reduced.  Lower GHG emissions 
would have a positive impact, of course, on climate change. 
 
Survey Says: Reactions from Pols and ENGOs 
------------------------------------------ 
¶24. (U) Reaction to the announcement was swift and pretty 
much unanimous, but it focused almost exclusively on the 
plan's climate change elements.  Leaders of opposition 
parties of course panned it.  NDP head Jack Layton told TV 
interviewers that Turning the Corner "wouldn't get the job 
done," and challenged the government to put the plan before 
parliament.  That would be "democratic" and allow parliament 
to select the best elements from the environmental plans put 
forward by all the parties.  Elizabeth May, head of Canada's 
Green Party, called it a "climate disaster plan" that was 
both shameful and despicable.  She went on to announce that 
 
OTTAWA 00000795  007 OF 008 
 
 
in her thinking the Kyoto targets were just a "modest first 
step."  The real target, she continued, must be an 80 percent 
reduction from 1990 levels of GHG emissions.  Liberal 
environment critic David McGuinty called the plan defeatist 
and bad for the country, continuing that by finally 
disavowing the Kyoto targets, Canada no longer stood any 
chance of convincing the U.S. to join the Kyoto Protocol(!) 
 
¶25. (U) A representative of the World Wildlife Fund said the 
plan failed the test of what the planet needs; that it was on 
"the wrong side of science, the wrong side of business, the 
wrong side of public opinion, and the wrong side of Canada's 
international obligations."  A Green Peace representative 
commented that in walking away from Kyoto, Canada was now 
alone, and international leaders were already commenting on 
the lack of Canadian action on Kyoto.  Canada's best known 
environmental activist, David Suzuki, sought Baird out Friday 
to convey his disappointment.  "What you promised is a long 
way from what you delivered," he said.  The plan is "not 
enough." 
 
¶26. (U) Even former-Vice President Gore, in Toronto on April 
28 to present "An Inconvenient Truth" at an environmental 
trade show, got into the act, calling the plan (in response 
to a question) a "complete and total fraud...designed to 
mislead the Canadian public."  According to media reporting, 
Gore concluded the plan was "shocking," since the rest of the 
world looks to Canada for moral leadership.  John Baird 
wasted no time, firing back in a statement that evening that 
it was "difficult to accept criticism from someone who 
preaches about climate change, but who never submitted the 
Kyoto Protocol to a vote in the United States Senate, who 
never did as much as Canada is now doing to fight climate 
change during eight years in Office..."  Baird offered to 
meet with Gore "to discuss the climate change threat and our 
Government's tough plan to reduce Canada's emissions." 
 
But Industry More Positive 
-------------------------- 
¶27. (U) Early reactions from industry groups were a bit more 
positive, but hardly let the government off the hook.  A 
fairly common view seemed to be that the targets would be 
difficult to meet and were more challenging than those 
proposed by the Liberals back in 2005 when they were in 
power, but that they were more "realistic" than current 
opposition proposals and would at least provide some guidance 
for business going forward.  A few specifics:  The Forest 
Products Association complained the plan did little to 
recognize and give credit for that industry's claimed 54 
percent reduction in intensity of GHG emissions since 1990. 
A policy executive with the Canadian Chamber of Commerce 
worried about adding an extra layer of bureaucracy to handle 
the additional "regulatory burden."  Alberta oil patch 
executives seemed to feel the plan would not threaten major 
oil sands developments, but would impose greater costs on the 
industry across the board. 
 
¶28. (U) In speaking to the press after the plan's release an 
upbeat Baird claimed Turning the Corner was balanced.  He 
cited criticism from both ends of the supposed "climate 
Qcited criticism from both ends of the supposed "climate 
change spectrum" as the best evidence the government had 
gotten the targets about right. 
 
So, What about Kyoto? 
--------------------- 
¶29. (U) Baird admitted Canada won't reach its Kyoto Protocol 
target of reducing GHG emissions by 6 percent from 1990 
levels by 2012, the end of the first commitment period.  But 
he did say the reductions will put Canada on pace to meet 
that original Kyoto commitment in 2025.  Officially, Canada 
continues to support Kyoto and remains active in discussions 
about an international climate change regime for the 
post-2012 period.  Taking a page from the U.S. climate change 
play book, the government says effective future international 
cooperation on climate change will require all major emitting 
countries to do their part to reduce emissions. 
 
OTTAWA 00000795  008 OF 008 
 
 
 
The Way Forward 
--------------- 
¶30. (SBU) While the government now has an announced framework 
to regulate GHGs and already has the legislative authority to 
accomplish much of what it proposes in "Turning the Corner," 
there are pending items still to be finalized.  These range 
from the technical (additional consultations with industry 
and the provinces will be needed through the end of this year 
to finalize sector-specific regulations) to the policy level. 
 Clearly the government's most important policy decision will 
be how to handle the climate change legislation already in 
parliament.  Given the somewhat tortuous progress to the 
present state of affairs, one suspects the government would 
prefer to regulate only by decree.  One also suspects the 
opposition and environmental activists will be loath to let 
the government ignore the climate change legislation now 
pending before parliament.  Proroguing parliament would solve 
the immediate problem by taking this legislation (the 
re-written Clean Air Act (C-30), the Kyoto Implementation Act 
(C-288), and a similar NDP bill (C-337)) off the table, but 
re-introducing some of this legislation would certainly be an 
early order of business for the opposition in a new 
parliamentary session. 
 
¶31. (SBU) The government also still faces the even greater 
challenge of managing public perceptions of its environmental 
record (which really does not suffer in comparison to the 
Liberal's record).  How can the government sideline the 
pending legislation (through proroging parliament or by 
simply not submitting for royal assent a bill that has passed 
both chambers of parliament) without seeming cynical or 
manipulative or even (in a possibly emerging theme) 
anti-democratic?  And, how can the government gain 
credibility on "green" issues in the face of unrelenting 
criticism from the Kyoto-centric press, environmentalists, 
and opposition?  The government has to address both aspects 
of its environmental dilemna, and seems committed to the 
fray.  But whether Turning the Corner will prove an effective 
weapon for the Conservatives in their battle to convince a 
skeptical electorate remains to be seen. 
 
Canada's Emissions (a Postscript) 
--------------------------------- 
¶32. (U) Canada committed in the Kyoto Protocol to reduce its 
GHG emissions in 2012 to 6 percent below their 1990 levels of 
599 megatonnes.  By 2004, however, total GHG emissions had 
grown to 758 megatonnes, 26.5 percent above their 1990 level, 
and 34 percent above the Kyoto target.  The latest business 
as usual projections from Natural Resources Canada put 
Canada's GHG emissions at 830 megatonnes in 2010 and 850 
megatonnes in 2012, nearly 51 percent above the original 
Kyoto target.  The government estimates that cuts embodied in 
"Turning the Corner" will bring total emissions down to the 
Kyoto target in 2025, and to 60-70 percent below present 
levels by 2050. 
 
¶33. (U) Sources of Current Canadian Emissions by Sector 
                            GHG           Pollutants 
                           (2004)            (2002) 
Agriculture        8 percent        10 percent 
Commercial/ 
Residential Heating     11 percent         1 percent 
QResidential Heating     11 percent         1 percent 
Commercial/ 
Consumer Appliances      1 percent         8 percent 
Industry                51 percent        52 percent 
Transportation          25 percent        27 percent 
Other              4 percent         2 percent. 
 
Visit Canada's Classified Web Site at 
http://www.state.sgov.gov/p/wha/ottawa 
 
WILKINS