US embassy cable - 05OTTAWA1020

UNCLAS OTTAWA 001020 
 
SIPDIS 
 
STATE FOR OES, OES/EGC, EB/ESC/ISC, WHA/CAN 
 
USDOC FOR ITA/MAC -- OFFICE OF NAFTA 
 
DOE FOR INT'L AND POLICY, IE-141 (DEUTSCH) AND BPA (ATKINS) 
 
EPA FOR OFFICE OF THE ADMINISTRATOR, INTERNATIONAL AFFAIRS 
AND BRIAN MCLEAN 
 
E.O. 12958: N/A 
TAGS: SENV, ENRG, CA, Transportation, Environment, Greenhouse Gas Emissions 
SUBJECT:     VEHICLE GREENHOUSE GAS EMISSIONS: 
      CANADA UNVEILS VOLUNTARY DEAL WITH AUTO MAKERS 
 
REF:  OTTAWA 824 
 
1.   AS ANTICIPATED (REFTEL), ON APRIL 5 THE GOC AND 
REPRESENTATIVES OF NINETEEN AUTOMOTIVE COMPANIES ANNOUNCED A 
MEMORANDUM OF UNDERSTANDING (MOU) UNDER WHICH THE COMPANIES 
PLEDGE TO REDUCE GREENHOUSE GAS EMISSIONS FROM NEW CARS. 
THE TARGET IS TO CUT EMISSIONS FROM THE CANADIAN VEHICLE 
FLEET BY 5.3 MEGATONNES BY 2010, OR ROUGHLY A 25 PERCENT CUT 
FROM THE "BUSINESS-AS-USUAL" SCENARIO. 
 
 
2.   THE MOU AND RELATED DOCUMENTS ARE AVAILABLE ON THE 
NATURAL RESOURCES CANADA WEBSITE AT NRCAN-RNCAN.GC.CA. 
ANNEX 3 PROVIDES A LONG LIST OF POTENTIAL TECHNOLOGY 
IMPROVEMENTS WHICH COULD CONTRIBUTE TO THE REDUCTIONS, 
INCLUDING:  TRANSMISSION IMPROVEMENTS (INCLUDING MORE AND 
HIGHER GEARS), ENGINE FEATURES (DEACTIVATION OF SOME 
CYLINDERS UNDER CERTAIN OPERATING CONDITIONS), MANY VALVE 
CONTROL FEATURES, REDUCED INTERNAL FRICTION, LIGHTER VEHICLE 
WEIGHT, BETTER AERODYNAMICS, MORE HYBRID AND PERHAPS 
HYDROGEN TECHNOLOGIES, AND OTHER ALTERNATIVE FUELS. 
 
3.   REFTEL PLACES THIS AGREEMENT IN THE CONTEXT OF CANADIAN 
CLIMATE CHANGE POLICY.  THE 5.3 MEGATONNE CUT IS WELL UNDER 
ONE PERCENT OF CANADA'S TOTAL EMISSIONS, AND A FRACTION OF 
WHAT THE GOC HOPES TO NEGOTIATE FROM LARGE FINAL EMITTERS 
(LFE'S - MAINLY IN THE ENERGY, MINING, METALS AND FOREST 
PRODUCTS INDUSTRIES).  FOR AUTOMAKERS, THE ALTERNATIVE TO 
THIS "VOLUNTARY" DEAL WAS MANDATORY EMISSIONS LIMITS IMPOSED 
BY GOVERNMENT REGULATION.  MEDIA REPORTS IN BOTH THE UNITED 
STATES AND CANADA HAVE NOTED THAT THIS WOULD BE SIMILAR TO 
THE APPROACH PROPOSED BY THE STATE OF CALIFORNIA (THOUGH 
AUTOMAKERS HAVE RAISED A LEGAL CHALLENGE TO THE STATE'S 
JURISDICTIONAL AUTHORITY TO REGULATE EMISSIONS).  HAVING 
AGREED TO REDUCE GREENHOUSE GAS EMISSIONS FROM THEIR 
CANADIAN VEHICLES REDUCES THE INDUSTRY'S ABILITY TO RESIST 
DOING THE SAME IN U.S. MARKETS - AS SOME U.S. 
ENVIRONMENTALISTS HAVE ALREADY POINTED OUT. 
 
4.   ACCORDING TO THE MOU, A JOINT INDUSTRY-GOVERNMENT 
MONITORING COMMITTEE WILL REPORT ANNUALLY ON PROGRESS TOWARD 
THE TARGETED REDUCTIONS.  THE 5.3 MEGATONNE REDUCTION TARGET 
IS BASED ON A "BUSINESS-AS-USUAL" ESTIMATE FOR 2010 
EMISSIONS, WHICH WAS ORIGINALLY DETERMINED IN 1999.  ANNEX 2 
OF THE MOU ALLOWS FOR THIS "REFERENCE CASE" TO BE ADJUSTED 
BASED ON "FACTORS OUTSIDE THE INDUSTRY'S CONTROL."  IT BEARS 
NOTING THAT THIS ENSURES THE GOC CAN AVOID THE POTENTIAL 
EMBARRASSMENT OF SEEING THE INDUSTRY MISS ITS TARGET. 
 
DICKSON