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Annual Report 2007-2008 – The Year in Review

Program Areas

Drawing on the wealth of insight and experience represented by its diverse membership, the NRTEE examines the environmental and economic implications of priority issues, and offers independent advice on how best to address the challenges and seize the opportunities that emerge from them. Its activities are directly relevant to Canada’s national interest and to the government’s objective of building a globally competitive, sustainable, technologically innovative economy.

Over the last year, the NRTEE has focused its attention and research on the critical issues of climate change and clean air. We have looked at the issue in terms of: (1) long-term policies to reduce greenhouse gas (GHG) and air pollutant emissions in Canada; (2) policies for adaptation to climate change in the Canadian North; as well as (3) providing an evaluation of the federal government’s 2007 Climate Change Plan for the purposes of the Kyoto Protocol Implementation Act. A brief explanation of these Program areas are described below.

Clean Air Act Program

The program objective was to provide advice to the federal Minister of the Environment on: (1) how Canada could achieve significant emission reductions of GHGs and air pollutants by 2050; and (2) national ambient air objectives for particulate matter (PM) and ozone for the medium (2020 – 2025) and long term (2050). The results of the program were provided in two separate reports: Getting to 2050: Canada’s Transition to a Lowemission Future; and Developing Ambient Air Quality Objectives for Canada (released in June 2008).

Getting to 2050: Canada’s Transition to a Low-emission Future

In November 2006, the federal Minister of the Environment requested advice from the NRTEE on how Canada could significantly reduce its GHG and air pollutant emissions by 2050. In June 2007 the NRTEE released the initial findings. This preliminary report provided information on the environmental and economic implications of longterm GHG emissions reductions by 2020 and 2050. The report also provided findings in relation to potential long-term air pollutant reductions, specifically for sulphur dioxide, nitrogen oxides, volatile organic compounds and particulate matter.

In January 2008 the NRTEE released the final results of this research in a report entitled Getting to 2050: Canada’s Transition to a Lowemission Future. In this report, the NRTEE set out five enabling conditions that should be reflected in Canada’s climate change policy framework:

• Canada will have to work in concert with the world;
• Policy certainty – beyond the short term – is central;
• An economy-wide emission price signal, implemented with complementary measures, is the core element of a policy framework;
• Technology deployment will be imperative; and
• An integrated approach to climate change and air pollution should be pursued.

The report set out seven specific recommendations for the federal government. The key recommendation is that the federal government should institute a market-based policy that takes the form of an emission tax or a cap-and-trade system or a combination of the two; and that this price signal should be complemented with regulatory policies in order to address sectors of the Canadian economy that do not respond effectively to such a price signal or where market failures exist.

A copy of the Getting to 2050 report can be downloaded by visiting www.nrt-trn.ca.

Getting to 2050 Outreach Initiatives

In September and October of 2007, the NRTEE held half day outreach sessions in six Canadian cities across Canada, with select groups of knowledgeable stakeholders. The purpose of these sessions was to present the findings of the NRTEE’s research prior to finalizing our report. Participants provided their views and opinions on the NRTEE’s approach and findings of the research. This outreach allowed the NRTEE to ‘ground-truth’ the research findings, thus strengthening our understanding of the issues before us.

In March 2008, after the release of the Getting to 2050 report, the NRTEE held three half-day sessions in Calgary, Toronto and Ottawa. Again, the purpose was to present the final findings of our report to larger groups of interested stakeholders, and to enter into a dialogue on the future work of the NRTEE with regard to this subject matter. These outreach sessions are particularly important to the NRTEE research in that it allows us to effectively communicate the findings of our research to those interested stakeholders, and receive direct feedback on our programs.

Developing Ambient Air Quality Objectives for Canada

As a result of the Minister’s request for advice regarding national objectives for ambient air for particulate matter and ozone for both the medium-term and the long-term the NRTEE released a report entitled Developing Ambient Air Quality Objectives for Canada. The NRTEE research and this Advisory Note focuses our advice on the process of setting national objectives, rather than specific numerical targets. The key findings conclude that:

• National long-term ambient air quality objectives should be supported by medium-term standards;
• The Government of Canada should play the lead role in developing national ambient air quality objectives for all Canadians; and
• An independent science-based process should be established to develop Canada’s long-term national ambient air quality objectives.

This Advisory Note was released in June 2008. A copy of this report can be downloaded by visiting www.nrt-trn.ca.

Climate Change Adaptation Program for Northern Infrastructure

The overall objective of this program is to contribute to an important national dialogue on how to enhance the resilience of Northern communities, businesses and governments to the current and emerging impact of climate change. Initiated in June 2006, the purpose of this NRTEE program is to examine the influence of Canadian public policy on how our communities and economic sectors plan for and manage the effects of climate change. It is focused on the territories and portions of the provinces north of the 60^th parallel, in recognition of the severe and sustained character of climate change in the Canadian North.

Human-induced climate change is already occurring and could intensify over the next decades regardless of any success in reducing green-house gas (GHG) emissions. Many of these changes will result in direct impacts to ecosystems, human infrastructure, and to our economies, safety and well-being. Some will be of a negative nature and will require a response; others may yield opportunities and benefits.

Specifically, this program aims to:

• Examine the role of government in fostering sound adaptation to the impacts of climate infrastructure change by Canadian sectors, communities and households related to infrastructure;
• Identify areas of government policy of strategic significance for the way in which Canadians, their economic sectors and governments manage risks related to climate change, and,
• Evaluate how key mechanisms within these identified policy areas might be adjusted, strengthened or restructured such that climate change impacts become recognized as a serious risk management issue.

Three policy areas have significant influence in relation to the risk management of climate change impacts in Northern infrastructure: disaster management; insurance and alternative riskspreading mechanisms; and codes and standards.

The NRTEE will make recommendations relating to these areas of strategic policy to help develop a strong adaptive capacity across Canadian sectors and regions of the North. The report will be released in the fall 2008.

Response of the National Round Table on the Environment and the Economy to its Obligations Under the Kyoto Protocol Implementation Act

On June 22, 2007, the Kyoto Protocol Implementation Act (henceforth KPIA, or C-288), received Royal Assent. The KPIA stipulates that the Government of Canada is obligated to prepare—on an annual basis—a Climate Change Plan describing measures and policies enacted by the government to “ensure that Canada meets its obligations under Article 3, paragraph 1, of the Kyoto Protocol” [Subsection 5(1)]. The KPIA further provides that the government shall prepare a statement setting out the GHG emission reductions that are reasonably expected to result for each year up to and including 2012, as a result of the Climate Change Plan.

Subsection 10(1) of C-288 requires the NRTEE to:

1. undertake research and gather information and analyses on the Plan or statement in the context of sustainable development; and
2. advise the Minister on issues that are within its purpose, including the following:
   1. the likelihood that each of the proposed measures or regulations will achieve the emission reductions projected in the Plan or statement;
   2. the likelihood that the proposed measures or regulations will enable Canada to meet its obligations under Article 3, paragraph 1, of the Kyoto Protocol, and
   3. any other matters that the Round Table considers relevant.

The NRTEE undertook the required analysis to comply with our obligations under KPIA and our findings were provided in a report to the Minister of the Environment in September 2007. The NRTEE offered the following conclusions in its report:

• The policies and measures contained in the government’s Climate Change Plan and Statement will result in carbon emission reductions during the 2008–2012 period. There is a likelihood that the Statement overestimates the extent of emission reductions in the 2008–2012 period but we cannot definitively conclude at this time by how much.
• With respect to the realization of Canada’s Kyoto commitments, we concluded that the Plan and Statement will likely not allow Canada to meet those commitments.
• A number of issues and concerns were raised including:
  • differing and inconsistent forecasting methods used among various federal departments to describe the emissions reductions accruing from a particular initiative which lead to issues of additionality, free ridership, rebound effect and policy interaction effects;
  • the importance of transparency and clarity with respect to key assumptions and methods;
  • the consideration of important sensitivities and uncertainties; and
  • the importance of consistency in approaches across different departments/programs, and the need to integrate the findings in a holistic framework.

The NRTEE report provides suggestions for improved methodological and information-gathering practices for future Plans and Statements. Furthermore we suggested that the government consider undertaking an analysis of international best practices in this area and applying relevant lessons to the Canadian context.

The detailed findings and conclusions of this report can be found on the NRTEE’s web site at: www.nrt-trn.ca.