As the G8 countries prepare to meet later this week, one of the items they are expected to discuss is the creation of a post-Kyoto agreement for greenhouse gas reductions. During today's episode of OnPoint, Minister Jim Prentice, Canada's Minister of Indian Affairs and Northern Development, who was recently appointed chair of the Canadian government's cabinet committee on the environment and energy security, discusses his country's expectations for the G8 Summit. Minister Prentice talks about Canada's regulatory framework relating to greenhouse gases, and he explains why Canada has had difficulty meeting Kyoto targets. He also comments on corporate average fuel economy standards and the responsible exploration of the Alberta oil sands. Please note, this interview was taped on May 23, 2007, prior to the White House's global greenhouse gas emissions announcement.
Monica Trauzzi: Welcome to OnPoint. I'm Monica Trauzzi. Joining me today is Jim Prentice, Canada's minister of Indian Affairs and Northern Development. Minister Prentice was recently appointed chair of the Canadian government's Cabinet committee on the environment and energy security. Minister Prentice, thanks for coming on the show.
Jim Prentice: Monica, it's nice to be here.
Monica Trauzzi: As I noted at the top, the Canadian government recently created a Cabinet committee on environment and energy security. You already have an environmental minister in place. Why did they have to create this extra committee?
Jim Prentice: Well, this Cabinet committee is, I guess, the clearinghouse at the intersection of all of our policies relating to the environment, relating to the economy and energy security. So, our challenge, specifically by the prime minister, has been to strike a balance between, on the one hand, our obligations as environmental stewards and on the other, protecting our prosperity and our economy. So it's this committee that strikes that balance.
Monica Trauzzi: The upcoming G8 summit is set to have a major focus on climate and we're already hearing that the U.S. officials are trying to water down some of the language in a post Kyoto climate legislation. What are you expecting from the meeting? Do you think that the Europeans are going to stick to their guns as far as climate does?
Jim Prentice: Well, it should be a very interesting meeting and, of course, climate change is one of the issues that will be discussed. We've made great strides in Canada over the course of the last year as we've developed a regulatory framework for greenhouse gases and for air pollutants, so we're certainly interested in discussing those issues with other participants.
Monica Trauzzi: What are your thoughts on some of the changes that the U.S. has made?
Jim Prentice: Well, in terms of what's happening in the United States right now, I think it's quite fascinating because the debate in the United States surrounding climate change is really following upon the debate that we've had in Canada. Over the course of the last six to eight months we've put in place a national approach to greenhouse gas emissions that regulates the industrial sector, which we think involves tough, but really achievable targets. And it's interesting, I'll be meeting with political leaders here in the United States, and I think the States is moving in a similar direction towards the kind of approach that we followed in Canada. So that will be fascinating.
Monica Trauzzi: The prime minister has long doubted Canada's ability to meet its Kyoto commitment and as a result he's proposed, like you mentioned, a domestic solution to attacking climate change. Why? Were the targets set in Kyoto too aggressive?
Jim Prentice: Well, the targets that were set at Kyoto for Canada were very aggressive. But, in addition, the previous government essentially did nothing in moving Canada towards those targets for many years. So by the time our government formed office a year and a half ago, we essentially inherited a situation where we were significantly behind in the targets, a long, long ways behind. What we've tried to do is to follow an approach where we want to be sound stewards of the environment, we want to fight the climate change battle, but we want to do it over time, in a way that does not destroy our economic competitiveness, does not destroy our economy, and that allows for technological innovation. You know, I think here in the United States people will encounter a lot of the same public policy issues that we did.
Monica Trauzzi: What do you think post Kyoto legislation should look like?
Jim Prentice: Well, I think you have to begin with the regulation of industrial emitters. And in the context of Canada, that's about 50 percent of the greenhouse gases that we're speaking of and, of course, more of the air pollution. So, we started with a regulatory framework that sets target, ambitious targets, an 18 percent reduction in greenhouse gases by 2010, and then 2 percent per year thereafter. So these are tough targets and there are compliance auctions that will allow industry to either reduce their greenhouse gases or comply with the framework in other ways. It takes Canada well down the road of being a very, very responsible world player in terms of climate change.
Monica Trauzzi: As your country looks forward to strengthening its relationship with the U.S. and creating a situation where you work together on energy and the environment, how important do you think it is to maintain a partnership with European nations?
Jim Prentice: Well, that's important, absolutely, and we all need to be responsible allies here in the cause. But in terms of Canada's relationship with the United States, I go back and just point out that Canada is the United States' largest supplier of uranium, of natural gas, of oil and of hydro electricity. So we have economies here that are very intertwined. Our economic competitiveness is linked. And, first and foremost, we need to be cooperative partners in North America, in moving forward to deal with climate change.
Monica Trauzzi: So how would the U.S.'s push for energy independence affect Canada's economy?
Jim Prentice: Well, I think one of the things that American policy makers have looked for is diversity of supply and a safe, secure supply of energy. Canada, in that sense, is an important trading partner for the United States. We're not only the largest supplier of energy to the United States; we suggest that we're a very green supplier. We are trying to produce, in Canada, the ingredients to be a green energy superpower. And I know that that's something that American citizens are interested in as well. But we offer security of supply done in a responsible way, in a way that is commensurate with the objectives of American citizens also.
Monica Trauzzi: There's a lot of talk on Capitol Hill here about passing emissions legislation. What kind of climate proposal do you think U.S. legislators should be focusing on?
Jim Prentice: Well, I'm certainly going to be discussing the Canadian approach over the next day or so with some of the political leaders here. I think an approach that focuses on a regulatory framework to deal with industrial emissions, both for air pollution, I would say, and greenhouse gases. This is not just about greenhouse gases. It's about the common air shed that we have, in particular in central North America. And it's about dealing with air pollution and greenhouse gases together and with the regulatory framework that tackles the problem head on and reduces emissions in an orderly way over time without destroying our economic base.
Monica Trauzzi: And Canada and the U.S. also have an integrated auto industry. What kind of a CAFE, corporate average fuel economy, standards would you support?
Jim Prentice: Well, again, what we've said is that we are supportive of working together with the Americans to arrive at a stringent, dominant North American standard. The auto industry is completely integrated across our borders and we want to ensure that we have an auto industry that is competitive, both in Canada and the United States and one where we adopt standards that are stringent, that are the dominant standards. That we all agree on those standards, and then we move forward and ensure that we're competitive with each other and competitive with the rest of the world. Nothing could be more important.
Monica Trauzzi: Several of the 2008 presidential candidates in the U.S. are touting the Alberta oil sands as an energy solution. How will the Canadian government ensure that increased production is handled in a responsible way?
Jim Prentice: Well, the oil sands are, of course, one of the largest sources of petroleum in the world and at full production we'll ramp up to anywhere from 4 to 5 billion barrels per day, much of which is available for export. So, it is an important part of energy security in the United States. We, as Canadians, want to ensure that that resource is developed, is exploited in a responsible way. There are greenhouse gas emissions associated with upgrading the bitumen. And our regulatory approach applies to those and we've developed our regulatory framework taking cognizance of what's happening in the Canadian oil sands and how we can be responsible stewards of the environment as well as the producers of energy. So the plan deals with that, but it involves tough standards that companies will have to meet.
Monica Trauzzi: Recently we heard that oil sands production in Alberta would be the only national industry allowed to increase smog producing emissions over the next 10 years. Explain how that fits into the overall energy policy and why was this the only industry that government gave an exemption to?
Jim Prentice: Well, it isn't that it's been exempted, but the circumstance in the oil sands is that the production of oil from the oil sands is undergoing a dramatic increase at this point in time from something in the neighborhood of 1.2 million barrels per day up to, as I say, something in the nature of 4 or 5 million barrels per day. So the consequence of that is that there will be absolute increases in the production of greenhouse gases. The intensity-based approach that we followed will see absolute Canadian reductions in greenhouse gases. But we have to take into account the fact that certain parts of the Canadian economy are expanding and that includes the oil sands sector. But we've worked together with stakeholders, including the oil sands players, to make sure that these standards are ones that are tough, but they're fair. They're achievable standards that will make Canada a leader in the environment, but will allow us to be a safe and secure exporter of energy.
Monica Trauzzi: So, will you get to a point where the Alberta oil sands are regulated in the same way that all other industry is?
Jim Prentice: Well, they are. They are regulated in exactly the same way that all of Canadian industry is, under the Canadian approach. This is an approach that applies to the 700 largest producers of greenhouse gases and air pollutants in Canada, including the oil sands plants. So, it is universal in its application and it's quite fairly applied. I should say as well that under the Canadian approach there's a focus on technology and the development of technological advances, such as carbon sequestration. And I think we all know that in North America to achieve quantum reductions in greenhouse gases, it will be technology that drives that, whether it's carbon sequestration or coal gasification, technologies that will allow us to produce energy, but produce a lot less greenhouse gases.
Monica Trauzzi: Former Vice President Al Gore has called your government's plan to reduce emissions a complete and total fraud. And environmentalists are saying that emissions may continue to rise under the current proposal. How do you respond to that?
Jim Prentice: Well, I could not disagree more vehemently with Al Gore. This plan is one that I personally worked very hard on over the course of my last six months of my life in politics, as did Minister Barrett and others. It's a good plan. I think it is one of the most advanced plans in the world. We have stepped forward and done, as Canadians, what no one else has gone, which is to regulate the industrial sector. And, certainly, we can have a debate about the level at which targets have been set and the compliance options and so on. But what we're doing in Canada is to apply, in a practical way, a plan that will reduce greenhouse gases, will at the same time allow for technological innovation and turn Canada into a green energy superpower. So it's an excellent plan and, I'll tell you this, as more and more people look at it they're going to find that they'll be drawn to a very similar approach.
Monica Trauzzi: How important are China and India in the equation? Will you be reaching out to these countries as well and urging them to reduce their emissions?
Jim Prentice: Well, certainly in any international forum that we take part in we make the point that China and India in particular are responsible for a significant portion of the growth in both air pollution and carbon emissions. So, they need to be part of the solution. Canada, you know, is only responsible for 2 percent of the world's greenhouse gas production. So we can't do this alone, anymore than the United States can do it alone. We'll need a worldwide effort and, of course, that's been part of the difficulty, the challenge of Kyoto, is that some of the major producers of greenhouse gases haven't really been signatories to it, and the future has to have them as equal partners in fighting climate change.
Monica Trauzzi: California Governor Arnold Schwarzenegger and his advisers are set to meet with the prime minister shortly. What are your thoughts on California's stringent greenhouse gas emissions standards?
Jim Prentice: Well, what we have in North America, at this point, between Canada, the United States, and Mexico, is one of the largest free market energy economies anywhere in the world, where energy travels back and forth across borders. We really need to ensure that at the end of the day we have national climate change policies that are similarly aligned. And the reason for that is that in addition to the protection of carbon, the consumption of carbon and the production of greenhouse gases are the flip side of the same coin. So a series of sub national or provincial or state policies doesn't really achieve the objective at the end of the day. You'll need national action from the government. In Canada that's what we've done and I suggest that you'll eventually move towards the same approach here in the United States.
Monica Trauzzi: But Governor Schwarzenegger will be talking to the Canadian government.
Jim Prentice: Right.
Monica Trauzzi: What's that talk going to be like? Is he going to be convincing you to increase the standards that you guys are trying to implement?
Jim Prentice: Well, I actually will be seeing the governor next week when he is in Canada and I look forward to those discussions, and I applaud efforts of all provincial or state legislators that are focused on climate change. And we have the same issues going on in Canada as between the provinces and the national government. And there is a way to harmonize all this that it works in a responsible way. We managed, in the case of Canada, to strike that harmonious balance with the provinces and worked very closely, for example, with the Alberta government. And I think that, over time, you'll do exactly the same thing here.
Monica Trauzzi: Are the targets that he's set too high or can they be met?
Jim Prentice: Well, I'm not sure in the context of California. I'm not an expert in the state of their economy or the targets that he's focused on, but I'll be interested in discussing that with him next week.
Monica Trauzzi: All right, we're going to end it right there. Thanks for coming on the show.
Jim Prentice: Thank you.
Monica Trauzzi: This is OnPoint. I'm Monica Trauzzi. Thanks for watching.
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