OTTAWA - Oil and gas producers in Alberta and large industrial plants and electrical power generators in Ontario will bear the brunt of the costs of combating climate change under the Kyoto Protocol, according to a framework plan set forth by David Anderson, the Minister of the Environment.
In outlining the plan to implement Kyoto, Mr. Anderson said the biggest producers of greenhouse gases will either have to curb emissions or buy credits from other companies, domestic or international, who have cut below their targets.
Mr. Anderson identified the biggest emitters as major industrial plants, oilsands operations, petroleum refineries and electricity generators.
"A trading scheme can be the most effective [in reducing greenhouse gases] and, theoretically, from an economic point of view, gives you the cheapest possible cost of achieving these goals," Mr. Anderson said.
He said the trading scheme was part of a three-part strategy under consideration, one which includes targeted measures designed to reduce emissions from other sources, such as the consumer, transportation sector and municipalities, as well as a proposal for Ottawa to buy international credits it could allocate to industries or parts of the country that are having trouble meeting the Kyoto targets.
Mr. Anderson cautioned that his ideas are part of framework for discussion and not the final plan.
"We want to consult and adapt it (the framework plan) according to the view of provinces and stakeholders," he said.
Industry groups and provinces, particularly Ontario and Alberta, reacted angrily to the framework plan.
Lorne Taylor, Alberta's Minister of the Environment, said Alberta will oppose any plan that puts sectors of the economy, and particularly the Alberta-based oil-and-gas sector, at a competitive disadvantage by making them incur additional costs.
"I am not at all happy the way it's going. Once again, they are putting plans out that there is no estimates of costs. How much does it cost to buy emission [credits], how much does it add on to a gigajoule of natural gas or a barrel of oil? And who is going to pay for it?
"Quite frankly, only 15% of the energy that Alberta produces is used in Alberta. The rest is shipped to Eastern Canada and the U.S. Do they want us not to produce energy, so we don't produce CO2, so we don't ship it to Eastern Canada?" he asked in an interview.
Elizabeth Witmer, the Ontario Minister of the Environment, said the province's Conservative government was unaware that Mr. Anderson would be making such pronouncements without consulting them.
"This whole conversation about signing the Kyoto agreement has been done in a vacuum. Tell us what the impact is going to be," she demanded of her federal counterpart.
Kyoto requires Canada to cut its greenhouse gas emissions to levels produced by the economy in 1990. Greenhouse gases - mostly caused by burning fossil fuels - are believed to be the cause of global warming. The U.S. has rejected Kyoto and is implementing its own less stringent plan. The European Union (EU) announced earlier this week it is committed to ratifying the treaty.
The Canadian government has said it would like to announce its intention to ratify the treaty by June, when Jean Chrˇtien, Prime Minister, plays host to the G7 industrial country leaders in Kanananskis, Alberta.
The Canadian Manufacturers and Exporters, which recently said implementing the Kyoto climate change deal, could cost 450,000 jobs, said the framework still does not answer key questions facing industry. "He has identified those sectors that will bear a burden. But, how much of a burden? Will emissions trading really be able to work effectively? There are a lot of questions," said a spokesperson.
Nancy Hughes Anthony, Canadian Chamber of Commerce president, also said the framework plan is lacking in details. The chamber recently put the cost of implementing Kyoto at $30-billion by 2010. "The oil and gas industry is around 20 % of current emission, electricity is 17 % ... the consumption and utilization side [as a source of emissions] is over 60%. I still don't think we see a clear plan of what people are going to have to do [to meet the greenhouse gas reduction targets]," she said.
Pierre Alvarez, Canadian Association of Petroleum Producers, said the framework leaves out how Ottawa will deal with the bulk of emissions.
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