The federal government's plan to cut emissions blamed for global warming will fall short of Canada meeting its obligations under the international Kyoto treaty, experts say.

While some critics give the plan credit for measures aimed at boosting clean "green" energy development, they say Ottawa's newest Kyoto strategy comes too late, is still too vague and is too expensive.

Even those who support parts of the plan released last week predict it will fail to reduce Canada's greenhouse gas emissions by 270 million tonnes (or megatonnes - Mt) by the end of 2012 as required under Kyoto. The country's projected emissions gap has grown to 270 Mt from 240 Mt in the last few years.

"We've said for the last five or six years that we're not, as a country, going to meet the (original) 240-megatonne target though domestic actions alone. Therefore, it's only more so for the 270 megatonnes," says Pierre Alvarez, president of the Canadian Association of Petroleum Producers (CAPP).

Pierre Alvarez

It might be possible for Canada to meet its Kyoto target if the government spends billions of dollars to buy emission-reduction credits from foreign countries, Alvarez says. "But that's an issue that the (federal) government is going to have to decide."

Matthew Bramley, director, of climate change at the Alberta-based Pembina Institute for Appropriate Development, says the plan as proposed "is inadequate to meet the Kyoto target."

"I don't think the government has much credibility on Kyoto," Bramley says. "Clearly the Kyoto target has become a major challenge, with all the time that's been wasted and all the dithering."

Federal Environment Minister Stephane Dion, in releasing the plan, defended it as "pragmatic and results-driven.

"The balanced measures allow Canadians to honour our Kyoto commitment while improving our competitiveness in a sustainable economy," Dion said.

But Aldyen Donnelly, president of the Greenhouse Emissions Management Consortium of energy companies, says: "It's not physically or financially possible for Canada to comply with the Kyoto Protocol - end of story, full stop."

The plan proposes spending $10 billion to reduce the 270-Mt emissions gap within the 2008-2012 Kyoto timeframe.

However, the federal government intends to achieve most of these reductions - up to 115 Mt - by buying emission-reduction credits either from businesses, communities and other sources within Canada or by purchasing foreign credits in a still-developing international market.

The foreign credits alone will cost Canadians at least $2.6 billion - either that or "order the shutdown of all TransAlta's coal plants in Alberta," Donnelly says.

In releasing the plan, Industry Minister David Emerson said that industry will get onside because companies are seeing the "positive business advantages and opportunities that environmental action can provide."

But Nancy Hughes, president and CEO of the Canadian Chamber of Commerce, says the government's cost estimates for its Kyoto plan have increased from $4 billion to $10 billion in just seven weeks.

"It is very unclear to me where the government intends to find the money to pay for this plan, and it is also unclear how accountable the government will be to Canadians on the use of these funds," Hughes said in a statement.

Bob Mills, the federal Conservative party's environmental critic, says he suspects the Liberals plan to raise the funds needed for their Kyoto spending by taxing electricity, natural gas and transportation fuel.

"I think this (plan) is more about distracting from the Gomery inquiry than it really is about achieving any greenhouse gas (reduction) goals," Mills says.

The plan also lowers the emissions-reduction target for some 700 large industrial emitters, including Alberta's electricity-generation and oil and gas sectors, to 36 Mt from a 55-Mt cut proposed in Ottawa's 2002 climate change plan.

These so-called large final emitters are responsible for half of Canada's greenhouse gases, yet they only have to reduce about 13 per cent of the emissions required under Kyoto, say environmental groups.

But CAPP's Alvarez says that oil and gas producers and other Canadian industries have been making progress on cutting their emissions.

"On the other hand, individual consumption across the country continues to grow by 1.5 to two per cent a year," he says. "Our view is that it's time the consumer - read 'voter' - needs to understand that there's a role for them to play."

Oil and gas producers and other industries now have to bear a cost of implementing Kyoto that non-signatories to the treaty, such as the U.S., aren't subject to, Alvarez says.

But Bramley argues that the Canadian oil and gas-producing sector's emissions have risen by 56 per cent between 1990 and 2002, and they are largely responsible for Canada's Kyoto gap growing to 270 million tonnes.

The industry has acknowledged that, thanks to previous federal guarantees that capped its total emissions-reduction costs, Kyoto cost amounts to about 25 cents per barrel of oil on average for most companies, he says.

Yet Ottawa's plan shifts more than $2.6 billion of the costs of complying with Kyoto to taxpayers, Bramley says. "That makes no sense and it really weakens the credibility of the plan."

The plan also confirms a federal budget commitment to spend $1.8 billion over the next 15 years to encourage renewable energy development, which Ottawa expects will reduce 15 million tonnes of emissions by 2012.

This measure includes quadrupling a federal financial incentive to boost wind-power production by 4,000 megawatts, or enough energy to power one million homes.

"I question whether they've given renewable energy enough attention and focus," says John Keating, CEO of Calgary-based renewable energy developer Canadian Hydro Developers Inc. "But I'm not going to say 'no' to the $1.8 billion over 15 years, either."

Michael Carten, president and CEO of Sustainable Energy Technologies Inc., a Calgary firm that makes equipment for solar-powered systems, says although the plan talks about encouraging solar power "they (Ottawa) are not doing anything on the solar side."

"I'd like to see the government put more money into bringing these technologies into the mainstream in Canada ... and less money into buying credits in foreign countries," Carten says.

Alvarez says the plan still doesn't answer oil and gas industry concerns about how the federal and provincial governments will harmonize regulation of emissions, nor does it spell out specific mechanisms for implementing new technologies and a $250-million Partnership Fund with the provinces to initiate emissions-reduction projects.

(Mark Lowey can be reached at mark@businessedge.ca)