Ratifying the Kyoto accord without a clear understanding of its costs and implications to the Canadian economy “is intrusive federalism at its very worst,” says the president of the Edmonton Chamber of Commerce.

Mike Percy, the dean of the University of Alberta’s business school and a member of the Alberta government’s anti-Kyoto advisory committee, says unilateral federal action to implement the climate change pact could forever change its relationship with the provinces by defining the pace and location of regional economic development in Canada.

Mike Percy

“It tends to reinforce the role of the federal government as a vehicle for income redistribution, both among provinces and certainly to the rest of the world,” Percy told an Alberta Chambers of Commerce board of directors meeting in Calgary on Friday.

Percy joined a panel of speakers in condemning the protocol, which commits Canada to reducing its carbon dioxide and other greenhouse gas emissions to six per cent below 1990 levels over the next decade.

A plan touted by Alberta takes the right approach by harmonizing its strategy with the United States, which has refused to ratify Kyoto, Percy said.

“It focuses on incentives for new technologies, it’s collaborative with industry but sets targets, and it focuses on the intensity of emissions as opposed to an absolute cap . . . and it stretches out the period by which we abate greenhouse gases over a much longer period,” Percy said. “From the perspective of productivity and industry, that’s a good thing.”

Under the plan proposed by Alberta, there would be no guarantee of overall greenhouse-gas emission reductions. In fact, emissions would actually increase over the short term.

Pierre Alvarez, president of the Canadian Association of Petroleum Pro- ducers (CAPP), took issue with federal Environment Minister David Anderson’s assertion that consultations with the provinces and industry have been going on for the past five years.

“When you hear ‘five years’, that’s utter bunk,” Alvarez said, adding allocations, costs and mechanisms were only initially unveiled by the government just over two months ago.

The federal approach to Kyoto fails to recognize steps already taken by the oil and gas industry in cutting emissions, effectively imposing a cap on growth and taxing efficient operations, he added.

Premier Ralph Klein said last week that he plans to travel to New York next month to ask American business and political leaders to lobby Prime Minister Chretien to reject the treaty. But Alvarez said the wrong leader will be talking to the U.S.

“The issue is not for Premier Klein to explain, in the sense that the federal government is the one making the decision to proceed in the absence of a plan that’s been agreed to either by provinces or industry,” he told Business Edge. “(Klein) is just talking about an issue the investment community is already aware of. This is a major policy decision, and we’ll have to see how it’s going to play out.”

Meanwhile, the head of Canada’s largest oil-producing company says even if Canada reaches its Kyoto targets over the next decade, it would take other countries not constrained by the accord only eight months to replace those emissions. “30 million Musketeers valiantly trying to carry the environmental responsibility of the 830 million people living in our hemisphere and competing with us for jobs,” Gwyn Morgan, chief executive of EnCana Corp., told an audience attending a technical energy symposium in Calgary.

Gwyn Morgan

Countries with less-stringent environmental regulations will benefit from Kyoto, Morgan said, adding: “This may even cause global emissions to increase.”

“All of those years of economic hardship and sacrifice will have no measurable impact for Canada.

“If the Kyoto accord is approved in its current form, we’ll be transferring money, jobs and exports of oil to Russia, Saudi Arabia and other parts of the world with no net gain to the environment,” he added.

Morgan said he recently attended a meeting of international oil and gas CEOs, and spoke with a Russian oil company. “They stated they intended to increase oil production from its current six million barrels a day to ten by 2010, ironically the same year the Kyoto accord forces Canada to cut back its emissions 30 per cent, which would kill Canada’s ability to grow its own total exports.

“Let’s get this straight: One of the world’s dirtiest sources of oil accelerates production and pollution, while one of the world’s cleanest industries cuts back, and we send them millions to buy emission credits from them so they can do even more.”

The energy industry has been an environmental leader in Canada, insisted Morgan. Canada must act responsibly on the issue of climate change, he added, but also realistically.

“I’m not questioning the need for environmental protection and greenhouse gas reduction, but Kyoto is truly the wrong mechanism.”