OTTAWA — Canadian corporations can expect growing pressure in the coming years to reduce greenhouse gas emissions beyond what the federal government has already pledged after Ottawa reluctantly accepted new targets at an international climate change conference in Bali.
The Conservative government is now finalizing regulations for large industrial emitters and for the auto industry as part of its plan to reduce greenhouse gas emissions by 20 per cent from 2006 levels by 2020.
But before the ink is even dry on those rules, Canada will be facing pressure to cut further and faster - which will inevitably result in new demands on business, Christine Schuh, director of sustainable business practices for PricewaterhouseCoopers LLP in Calgary, said yesterday.
"This is just the start," Ms. Schuh said.
An activist stands on a giant banner at the UN climate change meeting in Nusa Dua on the island of Bali on Friday. (Sonny Tumbelaka/AFP/Getty Images)
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She said the two-week Bali conference, which ended Saturday, set an aggressive timetable to negotiate a global agreement on post-2012 climate change targets, and endorsed the International Panel on Climate Change view that dramatic action is needed to avert an environmental crisis.
"Business can expect new demands to reduce greenhouse gas emissions ... There are still a lot of people who thought they could negotiate their way out of the impending regime, but that is clearly not on."
Recent surveys of Canadian companies indicate relatively few have allocated budgets to cut greenhouse gas emissions, or had senior management focus on how the climate change issue will affect their business.
Companies say they are waiting for clarity from the federal government in terms of the new climate change regulations.
However, Julia Langer, of World Wildlife Federation, said it is unlikely the current government plan will be the last word.
At Bali over the weekend, Canada grudgingly accepted broad targets to reduce emissions by 2020 by between 25 per cent and 40 per cent from 1990 levels.
The agreement is part of an accord that covers all 38 of the countries that ratified the Kyoto Protocol.
Canada's former Liberal government signed and ratified Kyoto but did little to put in place the mechanisms to achieve Canada's target of cutting emissions by 6 per cent from 1990 levels by 2012.
The Conservative government has never formally repudiated Kyoto, but said the country would not meet its obligations.
But Ms. Langer said the Conservative policy is unlikely to achieve the government's own targets of reducing emissions by 20 per cent from current levels by 2020.
But the pressure to cut deeper will only grow, she said, particularly if the United States embraces climate change action under a new administration after the 2008 elections.
"Bali is meant to get us to the next round, but we haven't even caught up to the first round" under Kyoto, she said.
Jayson Myers, president of the Canadian Manufacturers & Exporters association, agreed the government's current proposals are unlikely to achieve its target for reductions in 2020.
Mr. Myers complained that the exercise in setting targets has been divorced from economic realities, and devoid of any clear strategy for achieving those goals without undermining economic growth.
"Bali was not really an environmental meeting - it was a discussion about the world economy," he said.
"It's going to take billions and billions of dollars - dollars that will come either from consumers or taxpayers - to provide the necessary investments to get the job done. And I haven't seen anything yet to suggest that governments are prepared to drive those investments."
He said that large manufacturers in sectors such as pulp and paper, aluminum and steel have reduced their greenhouse gas emissions by as much as 20 per cent from 1990 levels.
They did so by investment in new plant and equipment in order to drive down energy use and operating costs - which in turn reduced emissions.
He said tax measures aimed at encouraging corporations to make capital investments would be more effective than regulated limits on greenhouse gas emissions.
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