It will take more than stern government warnings and voluntary reductions in greenhouse gas (GHG) emissions for Canada to meet its Kyoto accord commitments, says Bob Page, TransAlta Corp.'s vice-president for sustainable development.

Page says Canada still doesn't have a clearly defined economic blueprint for reducing up to 300 million tonnes of GHG emissions a year up to and including 2012, Canada's Kyoto target. The accord was scheduled to become a binding international treaty on Feb. 16.

"The complexity of the problems and solutions are mind-boggling. The only thing we know for sure is that Kyoto is here and the business community has to find a way to link efficiency with least-cost options," says Page, who recently co-chaired a Biocap Canada Foundation conference in Ottawa. About 400 people attended.

While the federal government has put dozens of incentives, subsidies and even a revolutionary emission-trading system on the table, it still has no co-ordinated plan that will guarantee a cleaner atmosphere at an acceptable price. Page and others at the conference believe Canada's best hope is to build efficiencies into systems that already exist rather than pinning hopes solely on new technology.

David Layzell

"Let's be honest here, there isn't a great appetite in Canada for cutting emissions right now so we have to find a way to drive a cleaner economy, not just with new technology like cogeneration systems and cleaner coal, which help, but only work if the business model is right, but also with systemic methods that reach right down into the cellular level," said David Layzell, Biocap's CEO and chief researcher.

"One thing people don't seem to understand is that, in our world, carbon is neither created or destroyed, just shifted around," said Layzell, who is also a member of the Queen's University biology department. "Our job is to help manage that cycle, to put a flywheel on it to see if we're getting enough efficiency out of our natural resources."

Biocap is a not-for-profit research foundation based at Queen's University in Kingston that collaborates with industry, governments, non-government organizations and university researchers. It believes the best emissions solutions can be found in biology and biotechnology because the planet already has the biological tools to filter, scrub and recycle most of the pollutants people release into the ecosystem. Afterward, the biological tools can be used as fuel to replace, to a large extent, oil.

Biocap's main focus is the carbon cycle and its carbon dioxide component that makes up about 75 per cent of the GHGs that scientists say are accelerating global warming and other climate changes.

Canada is the world's largest per-capita energy consumer as well as the third-leading producer of GHGs, despite having just 0.5 per cent of the globe's population. Canada also has 10 per cent of the world's forests and 60 million hectares of arable land, both of which reduce the amount of carbon dioxide in the atmosphere.

It's that biomass - sawdust, grasses, branches, leaves - that has potential for emission control, both as a biosphere cleaner and supplier of abundant fuel. There is general consensus within the scientific community that biomass, wind and solar power are the three renewable-energy pillars for mitigating the effect of GHG emissions.

"We used to be called lumberjacks, now we're called carbon-cycle managers," joked Avrim Lazar, president and CEO of the Forest Products Association of Canada.

"Since 1990 the forest industry has increased production 30 per cent and reduced its GHGs 28 per cent by rethinking how to use materials. For example, using waste as fuel would annually allow three nuclear reactors to be taken offline," Lazar said.

Burning wood scraps or residual plant material has only about half the energy potential of fossil fuels, but that means it also releases less GHGs, which makes it a cleaner fuel.

The same theory applies to bio-fuels, such as bioethanol and biodiesel.

Bioethanol made mostly from corn is closest to joining mainstream fuels. When mixed with gasoline it's 40-per-cent cleaner burning. A new form made from straw cellulose has the potential to burn 90-per-cent cleaner.

Producers around the world are anticipating a sufficient increase in demand that will create the economies of scale necessary for green fuels to become widely used.

Shell Canada is following this lead, partnering with biotech innovator Iogen Corp. in a $40-million cellulose-bioethanol test plant outside Ottawa and planning a $350-million plant in Western Canada that will be the world's largest.

"We need novel ways like this to get anywhere near our Kyoto targets," says Tim Bancroft, Shell's vice-president for sustainable development, technology and public affairs, who is also a Biocap board member.

Allan Amey, president and CEO of Calgary-based Climate Change Central, sees bio-energy as an ideal component for cutting emissions. Not only is it cleaner and in most cases cheaper than fossil fuels, it also increases customer choice and creates local jobs.

The biggest barriers currently are high capital outlays to get bio-projects going, investment to make them acceptable in the market and social barriers such as convincing people to allow bio-refineries in their backyards, close to the feedstock. Those sorts of barriers keep bio-solutions a medium-term reality although Kyoto commitments need appeasing today, delegates were told.

A faster solution may come from a controversial carbon-emissions trading system that Canada is about to adopt. Based on an existing system used by 12,000 institutions in the European Union, carbon trading will allow Canadian entities to balance their emissions by purchasing credits from countries that produce fewer GHGs.

Biocap delegates learned the federal government's draft plan is due in March, with trading possible in 2006 and full implementation set for 2008.

Carbon trading has some obvious problems, said Page, who is also a Biocap board member.

Among the problems are how to quantify carbon capture, whether it will be a regulatory or open market, how to achieve a critical mass of traders and how to integrate into the economy something as intangible as a tonne of carbon.

"There are lots of potential conflicts," Page said. "Business wants an open market, while government wants to entrench environmental integrity.

"Because Canada has a heavier burden under Kyoto, we desperately need emissions trading using market mechanisms because business can make a buck on it and it's so much cheaper than (enforcing) regulations," Page said.

"One thing for sure, we desperately need the best brains in the country working on it," he said.

(Mike Levin can be reached at levin@businessedge.ca)