Inside the Kyoto Deal

Alberta’s energy minister, Steve West, spent much of last week wearing a tight smile, his clenched jaw and square shoulders set as firmly as his conviction that people who blame the oilpatch for the next century’s foul weather have lost their heads.

Inside the Kyoto Deal

Alberta's energy minister, Steve West, spent much of last week wearing a tight smile, his clenched jaw and square shoulders set as firmly as his conviction that people who blame the oilpatch for the next century's foul weather have lost their heads. As the politician overseeing his province's booming oil and gas industry, West accompanied the Canadian delegation to Kyoto, Japan, where negotiators from 159 countries were drafting a convention to cut the world's gluttonous appetite for burning fossil fuels. Most scientists believe those heat-trapping gas emissions will radically alter the Earth's climate over the coming decades, and West was in Kyoto to try to make sure oilpatch interests were heard above the doomsday din warning of cracked prairies and swelling oceans. But as the talks turned into nightly tests of stamina and once-firm positions seemed to shift like so much concrete in a Japanese earthquake, West grew more and more unsettled. "No deal," he kept urging Ottawa's sleep-deprived negotiators, suggesting they should all just pack up and catch the next plane out. "There's no deal here," he told them.

Actually, there was never much doubt that Ottawa would sign whatever treaty emerged from the Kyoto process. "Countries like Canada cannot afford to sit outside international conventions," said Environment Minister Christine Stewart. So before the Kyoto Protocol was even agreed to in the mid-morning of Dec. 11 - long past the conference's own Dec. 10 midnight deadline and after the last talked-out interpreter had begged off to bed - Ottawa officials had already written their post-meeting statement for Stewart to read to reporters. "We got a good deal for Canada," read the text, a copy of which was obtained by Maclean's nine hours before any deal was reached - and at a moment when agreement was so uncertain that a back-up statement was ready in case the entire conference crashed. Because it was written before Canadian negotiators knew how deep Canada's own emissions cut would be, the statement included the line: "For Canada, the reduction number is ____ " - with the blank to be filled in later - and praised whatever was to be agreed upon as "environmentally responsible, economically realistic and internationally equitable."

Hours after those bows were scripted, the magic Canadian number did emerge: a six-per-cent cut in some emissions to below 1990 levels - the benchmark year for measuring - to be reached between 2008 and 2012. The Canadian target was even more ambitious than Ottawa's opening three-per-cent offer, a figure that had already angered energy-producing provinces because it went beyond a federal-provincial compromise reached last month that called for a straight reduction to 1990 levels by 2010. Since Canada's emissions in greenhouse gases such as carbon dioxide and methane have risen by about 10 per cent since 1990, the actual cuts will have to go far deeper. Altogether, the world's 38 most-developed countries - the only ones legally bound by the deal to cut their emissions - set an overall reduction target of 5.2 per cent, ranging from an eight-per-cent cut in the European Union to a 10-per-cent increase allowed for Iceland.

The deal may carry marks of a hasty patch-up job, and no doubt fudged some contentious points. It is laden with jargon, and the last-minute haggling over wording at times seemed as dramatic as corporate lawyers crossing the t's on a merger contract. But there is no mistaking the protocol's significance. Although it still faces a long road to ratification and leaves out burgeoning pollution bad boys like China and India, the world has shifted into the post-Kyoto era. The potential ravages of climate change are no longer dismissed as unknowable and therefore untreatable. And Canadians have likely been set on a path to find new, more efficient ways to generate electricity, heat homes and power their cars.

Some plaintive voices insist opportunities are to be had in the coming economic and lifestyle makeover. But the loudest hollering has come from those who predict that changes will come with great economic pain. "I didn't think we came to Japan to get a deal that would start a recession at home," an upset West snorted to Maclean's, denouncing the agreement as "the placebo that all these big environmental groups seemed intent on getting." Unhappiness with the deal was swiftly and more publicly raised by Alberta Premier Ralph Klein in Ottawa at last week's First Ministers' conference, underscoring the political dangers ahead for the Chrétien government as it tries to find a way to share the costs of complying. "It's not acceptable," Klein said of the deal. "This accord in no way reflects the Canadian position that was established in Regina."

But Ottawa, piggybacking on American negotiating power, did win some important concessions on how those cuts can be calculated. The Kyoto convention allows countries to deduct the amount of carbon dioxide that newly planted forests will inhale, through photosynthesis, out of the atmosphere - which in UN jargon is known as an emissions "sink." It also recognized the complicated but proven principle of emissions trading, which would allow one country or business to buy a permit to pollute from another that has reduced its emissions. And the Kyoto protocol will give developed countries credit whenever they provide financial assistance to reduce gas emissions in the Third World. Chrétien has already declared his eagerness to sell more CANDU nuclear reactors abroad - which would enable Canada to gain credits for displacing brown coal in other countries with emissions- friendly Canadian nuclear power.

To some environmentalists, those provisions amounted to loopholes big enough to drive a gas-slurping passenger van through. Rich countries like the United States could keep burning fossil fuels at high rates, they argue, simply by buying credits from countries like Russia where industrial collapse has cut emissions by about 30 per cent since 1990. That makes Russia a multibillionaire - on paper - in potential pollution credits, and Russian negotiators were among the few seen smiling in Kyoto. But the notion worried European governments, skittish that trade competitors like Canada and the United States would just purchase compliance instead of making more difficult changes to their own economies. In the end, the Europeans agreed to trading emissions in principle, but set the devilish details aside for later.

For a while in Kyoto, the sight of Europeans and Americans butting heads seemed the main obstacle to a deal. Hopes had been high that U.S. Vice-President Al Gore would break the deadlock during his cameo appearance just two days before the deadline. But, on the surface at least, Gore, with his self-proclaimed environmentalist image, disappointed. Making his rather formal Japanese hosts look positively jocular by comparison, a stiff Gore merely instructed his negotiators to show "increased flexibility," offering no indication of what concessions might be coming.

Gore's appearance left gloom in its wake. Only inveterate optimists like Canadian Maurice Strong, a 25-year veteran of environmental diplomacy, saw much hope for a deal at that point - and at a sombre cocktail party even he forecast only a modest outcome at best. Predictions of failure rippled through the convention centre, a surreal landscape of booths and brochures, 24-hour videos promoting the merits of solar power and alternative lifestyle activists demonstrating how to make paper without wood. Kyoto was the lobbyist Olympics. Environmental superpower Greenpeace alone had 30 workers probing delegations for information and whispering spin to journalists. Smaller groups ranged from the Bicycle Clubs of the World to obscure American think-tanks peddling new scientific theories, like the one correlating the Earth's rising temperatures to sunspot activity.

Back on Earth, the sticking point in the back rooms was the European Union's insistence on calculating the emissions of all its 15 countries under one umbrella. This so-called bubble concept would allow heavy per capita polluters like Portugal to hide behind the gains from Britain's shrivelling coal industry, and U.S. negotiator Stuart Eizenstat (supported by equally frustrated Canadian negotiators) spent most of his time trying to burst it. "That's how Eizenstat plays," sneered Britain's John Gummer. "It's never about people's health; it's all about the price of beans."

Eizenstat finally solved the European bubble problem by threatening to create one of his own - with Russia, using all those billions of tons of emission credits to lower the cuts the United States would have to make. Heavy per capita polluters like Australia and Canada (the world's second worst) were happy to join the U.S. threat. According to Steven Guilbeault, a Canadian with Greenpeace, "The Europeans just freaked out at the idea" - and they began making concessions on such American demands as emissions trading. In turn, the Americans agreed to far deeper cuts in their own emissions than anyone imagined - seven per cent - making a mockery of Chrétien's determination to leave Kyoto a smidgen greener than the Americans.

But the divide between rich and poor nations was more difficult to bridge - and carries potentially graver implications for the treaty and the climate. There is widespread acceptance that - from a moral standpoint, at least - the industrialized nations, which grew rich by burning the preponderance of fossil fuels to date, should take the first, costly steps towards changing their ways. But with huge countries like India and China rapidly industrializing in dirty old Victorian fashion, most observers say any attempt to control climate change must include limits on their emissions, too. The U.S. Senate certainly thinks so. It has a resolution on the books promising not to ratify any climate change treaty that fails to include the participation of developing countries, and a few senators showed up in Kyoto just in case it slipped Eizenstat's mind. (The same issue also produced the only open clash inside the Canadian delegation, when Quebec Liberal MP Clifford Lincoln, in an argument with provincial Energy Minister West, forcefully pressed the moral case for countries like Canada to act first. The Albertan finally stood up, said, "That's it, I've had enough," and walked out.)

Led by China and India, the bloc of developing countries rebuffed all attempts to bring them into the accord, even on a voluntary basis. The Chinese devoted their five-minute speech to berating industrial nations for their "highly disappointing progress" in cutting emissions, and repeated that their only responsibility was to lift their people out of poverty. At lunch one day, John Fraser, Canada's ambassador for the environment, chastised a Malaysian negotiator for putting the "rhetoric of righteousness ahead of the political reality that is the U.S. Senate." But in the final hours, China and India leaned on other developing nations to defeat even a gently worded article that would have permitted developing countries to join the protocol at an unspecified future date.

Canada might have helped woo some Third World nations onside had Ottawa not undermined its traditional honest broker's role by failing to produce a coherent position until the conference was already under way. Instead, Stewart's uninspirational speech to the delegates was a cautious checklist of Ottawa's wishes, complete with the requisite Canadian sop to federal-provincial co-operation for the home audience.

As the punching bag for the official confusion over Ottawa's climate change policy throughout the fall, Stewart endured opposition taunts and whispers in her own party that she was "a nice lady," politically out of her league in such a sensitive portfolio. "My problem has been that I'm Christine Who? People don't know me at all," said Stewart in her hotel suite after the last marathon session ended. "My style is to find common ground rather than make a lot of noise, but I can be tough on the things I believe in. And I feel very, very strongly about the environment."

Despite the pounding she has taken, Stewart fought fiercely in cabinet to be the titular head of the delegation to Kyoto. But other senior delegation members noted approvingly that she realized, too, the importance of getting along with Natural Resources Minister Ralph Goodale, the sharp, skilled westerner who was at least her equal during the Kyoto talks. The pair attended meetings together and each was on the line for the crucial phone calls back to Chrétien. Goodale could even smile after his first sampling of the UN's marvelously eccentric diplomacy. "I decided after a while that we were just going to barge into those rooms and make ourselves heard," he said afterwards.

If the Goodale-Stewart team functioned as amicably as suggested, Chrétien can welcome the change in climate from the days when their predecessors - Sheila Copps and Anne McLellan - openly warred with each other. But after weeks of playing defence leading up to Kyoto and bruising relations between Ottawa and the provinces, the Liberals must apply more skill to nursing the country through the coming search for the trade-offs required to meet the targets. It is a minefield of federal-provincial trouble. For example, the House of Commons environment committee called yet again this month for an end to federal tax breaks for the fossil fuel industry that are helping develop Alberta's heavy oilsands. "That will have to be done," Stewart acknowledged last week, before cautiously adding, "over time."

But if Kyoto marked a turning of the old energy order, it also signalled an end to using the lack of scientific certainty as an excuse to do nothing. Not that experts are declaring the scientific debate over, or claiming that predictions of the next century's climate are now perfect. "All the focus on diplomacy, politics and economics obscures the fact that we still need better science," says Gordon McBean, Canada's senior atmospheric scientist who came to Kyoto after attending a conference of meteorologists in nearby Kobe. But now is the time, as British Deputy Prime Minister John Prescott said last week, "to worry about getting the political science right." And in Kyoto, for the first time, that meant following Maurice Strong's closing exhortation to the delegates: that "people routinely take decisions in their own lives with less to go by," and that "precaution now is far wiser than panic later."

Cashing in on Cleaner Air

Dale Johnson could use some good news. For more than 14 years, Johnson has toiled long hours trying to make his company, Wind Power Inc. of Pincher Creek, Alta., a success. During good times he has employed 30 people, but today only he and one other staff member remain in the tough Alberta market for alternative energy. Now, as he struggles with his dream of generating electricity from wind, Johnson cautiously welcomes the news out of Kyoto, Japan, convinced that governments may spend more money on supporting businesses like his. "It leaves room for optimism," Johnson says.

Where there are winners, there are often losers: a number of industries face potential job losses because of the Kyoto protocol. David Manning, president of the Canadian Association of Petroleum Producers, says those losses will exceed any job gains made through alternative energy. "You can't take all the people mining coal today and have them producing windmills tomorrow," he says. Gary Gallon, head of the Montreal-based Canadian Institute for Business and the Environment, concedes some jobs are indeed likely to disappear in the $30-billion a year oil-and-gas sector. But he predicts the job losses will be more than offset by gains in Canada's environment industries, which already consist of 4,000 companies generating revenues of $15.7 billion a year. "There will be dislocation and disruption," Gallon says. "But the only constant in an economy is change."

Among those poised to ride the new wave are entrepreneurs like Tom Tamblyn. As president of Tescor Energy Services Inc., Tamblyn's Toronto-based company counsels clients on upgrades to improve air circulation, heating and lighting - creating energy-efficient "smart buildings." While energy cost savings typically range between 20 and 30 per cent, Tamblyn says many business people still ignore energy efficiency. Kyoto, he adds, will help change that by increasing public awareness and "forcing everyone to have a more holistic look at what we're doing."

An integrated approach is also at the core of Woodrising Consulting Inc. of Erin, Ont. The small firm is marketing a service that analyzes emissions for clients and suggests ways of reducing or offsetting emissions. Instead of attacking the problem at the factory, for example, companies could invest in green alternatives - reforestation, car pooling or public transit. Woodrising consultant Neil Bird says that Kyoto will mean more companies looking for imaginative solutions. "We're going to get busy," Bird says. "Are we going to get busy tomorrow? Probably not. Are we going to get busy in a year? Yes."

While energy savers look forward to the future, so, too, do some energy providers. One of the most formidable is Atomic Energy of Canada Ltd., supplier of CANDU nuclear reactors. And in a greenhouse gas-conscious world, says Allen Kilpatrick, AECL's vice-president of marketing and sales, that can mean only good things. "In our minds, it will unquestionably increase the use of nuclear power," he says.

Power also lies buried in garbage dumps. Methane, produced by decaying organic material, is a greenhouse gas 30 times more potent than carbon dioxide. A study for the Canadian Institute for Environmental Law and Policy reported last week that only 10 landfills in Canada collect and combust methane to generate electricity. According to Greg Jenish, the report's author, if Canada could convert 60 per cent of its landfill methane to electricity, the country could cut a significant portion of its emissions. "Any city of about 100,000 people is likely to have a landfill large enough to support a methane-gas capture system," Jenish says. In a post-Kyoto world, there seems to be an abundant potential for clearing the air.

Maclean's December 22, 1997