Alberta’s energy sector and other businesses will need to buy and sell greenhouse gas emissions in an open market for Canada to meet its commitment under the Kyoto accord to slow global warming, experts say.

Trading in greenhouse gases and in “green” credits for reducing emissions could save Canadian industry hundreds of millions of dollars, based on experience with a U.S. market that trades in emissions that cause acid rain, speakers told a seminar in Calgary last week.

The National Round Table on the Environment and the Economy (NRTEE) hosted the educational seminars on emissions trading in five major Canadian cities this month.

Most scientists blame industrial gases, including carbon dioxide and methane, for trapping more of the sun’s heat in the Earth’s atmosphere, increasing global temperatures and the risks of widespread climate change.

Several Alberta firms have voluntarily started trading in greenhouse gases, including amassing credits by investing in projects that reduce emissions in other countries.

But the federal government has yet to recognize these initiatives and has fallen behind other countries in implementing a countrywide trading system, speakers told about 300 people attending the NRTEE seminar in Calgary.

“The leadership in Alberta has been real and it has been impressive,” said Douglas Russell, president of the Global Climate Strategies Institute in Ottawa.

Companies including TransAlta, Suncor, PanCanadian Energy and Shell Canada have engaged in emissions trading as much as possible, because they “understand that in the longer term, a carbon-constrained world is going to mean something to their bottom line,” Russell said.

Countries including Denmark, The Netherlands, Norway, the United Kingdom and New Zealand have already implemented or are poised to introduce domestic emission-trading systems. But “the national debate has not yet occurred” on how to structure such a Canadian program, Russell said.

Gerard Protti, senior vice-president of new ventures at PanCanadian Energy Corporation, agreed.

“We are not seeing what the clear policies are,” he said, even though Ottawa has announced its intention to ratify the Kyoto Protocol as early as August.

Ottawa at times appears to be in “a plunge towards ratification” without having a full discussion on the policies and objectives in responding to global warming, Protti said. “Engagement in this debate is critical.”

Under the Kyoto accord, Canada would have to cut its projected greenhouse gas emissions of 770 million tonnes in 2010 by about 200 million tonnes. Alberta, which is expected to have the country’s highest level of greenhouse gases by 2010 due to a doubling of fossil fuel emissions in the province, faces the biggest challenge.

The oil and gas industry wants the flexibility offered by emissions trading in trying to meet the Kyoto target. But the industry also wants credits for shipping natural gas to the U.S and reducing emissions there that would otherwise be produced by coal-burning power plants, Protti said.

Most environmental groups support emissions trading, as long as the federal government sets a mandatory cap on national emission levels and penalizes businesses that fail to reach their targets.

But most of industry – including Alberta’s oil and gas sector – argues for a voluntary rather than a regulated trading system.

Robert Hornung, policy director of the Alberta-based Pembina Institute for Appropriate Development, said industry’s voluntary efforts, while welcome, amount to “nibbling at the edges” of the level of emissions reductions that will be required to slow global warming.

“It’s been years that we’ve been talking about climate change,” Hornung noted. “We still don’t have any coherent plan from any level of government to deal with this issue.”

Alberta Environment Minister Lorne Taylor has predicted that compliance with the Kyoto accord would cost the provincial economy $6 billion and the country 70,000 jobs.

Noreen Smith, assistant deputy minister for Environment Canada, told the Calgary seminar that the costs will be significant but manageable. The country will also realize considerable benefits, such as savings in health care, by reducing harmful air emissions, she said.

Ottawa plans to launch countrywide consultations in early to mid-March on how to best meet Canada’s Kyoto commitment, Smith said.