US embassy cable - 05OTTAWA1203

UNCLAS SECTION 01 OF 02 OTTAWA 001203 
 
SIPDIS 
 
SENSITIVE 
 
STATE FOR G, OES/ETC, OES/EGC, EB/ESC/ISC, AND WHA/CAN 
USDOC FOR 4320/ITA/MAX/WH/ONIA -- WORD 
DOE FOR INTERNATIONAL AFFAIRS (DEUTSCH) AND BPA (ATKINS) 
EPA OF OFFICE OF THE ADMINISTRATOR, INTERNATIONAL AFFAIRS 
AND BRIAN MCLEAN 
 
E.O. 12958: N/A 
TAGS: SENV, ENRG, CA, Environment 
SUBJECT: DETAILS EMERGE ON CANADA'S CLIMATE CHANGE STRATEGY 
AND PLANS FOR COP-11 
 
REF: A. OTTAWA 1125 
     B. OTTAWA 886 
 
1.  (U)  Sensitive but Unclassified. 
 
2.  (U)  This is an action message.  Please see paragraph 12. 
 
3.  (SBU)  Summary:  According to a senior official at 
Environment Canada, the GOC's recently unveiled climate 
change strategy (reftel) reflects an attempt to meet Canada's 
Kyoto targets while growing the Canadian economy and 
preparing for a post-Kyoto emissions regime.  Issues such as 
competitiveness with the United States, as well as differing 
regional priorities within Canada, will be difficult to 
resolve, and the GOC sees continued engagement with the 
United States as critical to its climate change strategy. 
Domestically, the purchase of foreign emissions credits will 
be especially controversial.  The debate over the plan takes 
place as the GOC begins to organize itself for the UN 
Framework Convention on Climate Change 11th Conference of 
Parties meeting in Montreal in November.  End summary. 
 
LIMITING EMISSIONS, GROWING THE ECONOMY 
--------------------------------------- 
 
4.  (SBU)  According to Jean Boutet, Senior Departmental 
Policy Advisor to Minister of Environment Stephane Dion, the 
GOC believes that continued engagement with the United States 
will be fundamental as Canada struggles to reduce emissions 
and grow its economy.  Clean coal is one area that offers 
opportunities for increased bilateral cooperation, he said, 
and suggested that the U.S. FutureGen project should be on 
the agenda of future U.S.-Canada energy bilats.  Boutet told 
Emboffs that Canada's climate plan envisions a deep 
transformation of the economy in the coming decades, as a 
steady shift takes place towards renewable and clean energy. 
He added that interagency differences have largely been 
resolved, and that while Environment Minister Dion and 
Natural Resources Minister John Efford agree on the need to 
honor Canada's obligations under Kyoto, Environment Canada 
now has the lead on this issue within the GOC.  An early 
visit to Canada by Undersecretary of State for Global Affairs 
Paula Dobriansky, Boutet said, would be welcomed by Dion and 
other senior GOC officials involved in the climate change 
portfolio.  The visit, he suggested, would optimally take 
place before this summer's G-8 summit. 
 
5.  (SBU)  Boutet acknowledged that the Alberta oilsands 
represent an especially difficult problem for the GOC, as 
production is expected to double in the next 10 years to more 
than two million barrels of oil per day.  Greenhouse gas 
(GHG) emissions from the oilsands are higher than from 
conventional petroleum sources, and while technological 
improvements are reducing emissions-per-barrel, the problem 
remains of how to achieve absolute reductions.  Boutet said 
components of the GOC's strategy (reftel) such as emissions 
trading, green surplus credits, and the "Climate Fund" are 
intended to offset the higher emissions from oilsands 
expansion. 
 
6.  (SBU)  Although the GOC "will do its utmost" to reduce 
GHG emissions, Boutet said, it makes no apology for plans to 
purchase emissions credits from abroad.  Despite the negative 
optics of paying foreigners for "hot air," Boutet said that 
purchasing foreign credits is environmentally sound, is 
consistent with GOC foreign policy priorities, can lead to 
direct environmental benefits for Canada (e.g., reduced soot 
deposits in the Arctic).  Further, the GOC's Finance Ministry 
appears prepared to fund such purchases.  Boutet acknowledged 
that among other problems, the GOC's plan to spend up to C$5 
billion (approximately $4 billion U.S.) on a "Climate Fund" 
to purchase GHG emissions credits does not provide 
recognition for early emissions reducers, and also that 
emissions prices may rise significantly over time. 
 
REGIONAL CONSIDERATIONS 
----------------------- 
 
7.  (SBU)  One of the key elements of Canada's plan is an 
East-West electrical transmission corridor.  The goal, Boutet 
said, is to bring clean hydropower into Ontario from 
Manitoba, Quebec, and Newfoundland (at present, much of 
Quebec's surplus hydropower is sold to the United States, 
primarily to New York and New England).  Boutet explained 
that the GOC envisions a "green" transmission line, one which 
would be able to pick up co-generation assets along the way. 
The project, which would likely be done in stages, would need 
considerable support from both the federal and provincial 
governments. 
 
8.  (SBU)  The East-West transmission corridor takes on added 
importance as the provincial Ontario government shows no 
inclination to back away from plans to close all of its 
coal-fired power plants, about 7,500 megawatts total capacity 
(one quarter of Ontario's generation assets) by 2007.  Boutet 
opined that the Ontario government is simply "not interested" 
in clean coal technology.  Rather, the provincial government 
is focused on promoting wind and other renewables, as well as 
the transmission corridor. 
 
9.  (SBU)  Boutet told Emboffs that reaction in Quebec to the 
climate change plan has been dismay over the fact that 
emissions credits may be available for new gas-fired 
generation, but not for new hydropower.  Quebec's power 
strategy, Boutet explained, will continue to depend on a 
complementary blend of hydropower and renewables.  Manitoba, 
he added, is seeking to take a leading role among the 
provinces in developing sources of renewable energy, and the 
provincial government has signed a memorandum of 
understanding with the Government of Iceland to advance joint 
projects. 
 
PLANS FOR COP-11 
---------------- 
 
10.  (SBU)  As Canada prepares to host the 11th Conference of 
Parties (COP-11) to the UN Framework Convention on Climate 
Change beginning in late November, the GOC is examining how 
the meeting can promote a useful dialog regarding climate 
change strategies.  Boutet said that the hope is for real 
discussion, rather than "189 monologues."  Among the topics 
under consideration for the agenda, he said, are post-2012 
commitments, emissions reductions and economic growth, 
development and deployment of new technology, carbon markets, 
and adaptation strategies.  In addition, the GOC may want to 
open talks regarding a global agreement on coal. 
 
11.  (SBU)  The COP-11 meeting will include a technology 
fair, Boutet said, and the mayor of Montreal wants to hold an 
international mayor's conference on the margins of the 
meeting.  The GOC, he added, is hoping that heads of 
government from around the world will attend the conference. 
In September, Montreal will host a meeting of the 
Intergovernmental Panel on Climate Change, where the GOC 
intends to raise the use of climate change science for 
regional modeling.  Boutet added that the GOC may also seek 
to involve First Nations, the Arctic Council, and traditional 
societies in climate change discussions. 
 
12.  (SBU)  Action request:  Per paragraph 4, Embassy 
requests that Department consider a visit by Undersecretary 
Dobriansky to Ottawa in the near future, primarily to discuss 
climate change and plans for COP-11 with senior GOC 
officials.  Embassy would also be pleased to arrange public 
diplomacy events during the visit if so desired. 
 
Visit Canada's Classified Web Site at 
http://www.state.sgov.gov/p/wha/ottawa 
 
DICKSON