Senior Alberta government and petroleum industry officials say the Kyoto Accord will collapse and be replaced with a new international plan that will involve the U.S. and developing countries.
Kyoto is a “one-shot deal” to reduce greenhouse gas emissions and it won’t survive past the first compliance period at the end of 2012, predicts Rick Hyndman, senior policy adviser, climate change for the Canadian Association of Petroleum Producers (CAPP).
There won’t be any more Kyotos or any more structured (emission-reduction) targets, because the U.S. and developing nations that are big emitters will refuse to participate, Hyndman told the Canadian Energy Research Institute World Oil Conference in Calgary last week.
Bob Taylor, Alberta Energy’s assistant deputy minister responsible for oil development, agreed, saying: “I don’t see the continuation of that (Kyoto) regime.”
Hyndman said he expects Kyoto to be replaced with a plan that rewards countries for reducing their emissions intensity – the amount of greenhouse gases emitted for each unit of energy produced. Unlike Kyoto, such a plan wouldn’t penalize a country’s economic growth, he said.
Alberta has followed the lead of the Bush administration in the U.S., with a climate-change response plan based on emissions intensity rather than a binding cap on total emissions as required under Kyoto.
Critics say the approach taken by Alberta and the U.S. won’t reduce total emissions as quickly as the Kyoto Accord. If economic growth is strong, they say, emissions could actually increase in Alberta and the U.S.
The Alberta government and the oil and gas industry are taking an enormous risk if they think the rest of the world will simply abandon Kyoto, says Matthew Bramley, director, climate change, for the Pembina Institute for Appropriate Development.
The accord was negotiated as part of the United Nations Framework Convention on Climate Change, to which the U.S. is still a signatory, he said.
The initial Kyoto compliance period of 2008-2012 is just the beginning of a series of international agreements aimed at reducing global greenhouse gases by more than 50 per cent, Bramley added.
Negotiations on the second compliance period, with even tougher national targets, are supposed to start in 2005.
Subsequent agreements will include the U.S. and countries such as China and India, Bramley predicted. “Climate policy is becoming a serious rival to energy policy.”
Alberta’s oilsands are in a financially liable position because they’re projected to emit 10 per cent of Canada’s total greenhouse gases by 2010, compared with 2.5 per cent in 1990, Bramley said.
“Developers of oilsands projects today should be building greenhouse gas pricing into their business planning.”
But, Hyndman said, rapidly rising demand for energy will keep pushing up emissions regardless of Kyoto, particularly in the developing world which, he said, will emit more greenhouse gases than industrialized countries within two decades.
Increasing energy demand means Canada’s total greenhouse gases are likely to be even higher than the forecast 810 million tonnes by 2010, he said.
This would widen the gap of 240 million tonnes of emissions that Canada needs to reduce to meet its Kyoto target.
“The real answer to this issue has got to be investing in technology” that will allow the continued use of fossil fuels without generating greenhouse gases, Hyndman said.
Alberta Energy’s Bob Taylor said a draft order-in-council before the provincial cabinet would kick-start projects using carbon dioxide for enhanced oil recovery, while permanently storing the greenhouse gas in deep rock formations.
The province would provide up to $15 million over five years, to cover up to 30 per cent of the costs for up to five demonstration carbon sequestration projects, Taylor added.
Alberta would look for matching funds from Ottawa. The provincial cabinet is expected to make a decision on the investment by the end of March.
