European Fuel Regulation

Prime Minister Harper promised in 2006 to reduce Canadian emissions 20% by 2020 (in 2009 he changed it slightly to 17%). Only two policy approaches can achieve this: emissions pricing or regulations (or a combination). But he rejected emissions pricing, whether carbon tax or cap-and-trade. So this leaves regulations on technologies and fuels, which he promised. However, he has not implemented regulations to achieve his 2020 target, and, according to Canada’s Auditor General, even an immediate aggressive effort is unlikely to succeed – he only has 7 years left after doing virtually nothing since making the promise 7 years ago. In any case, he is instead promoting rapid expansion of the Alberta oil sands, which, according to Environment Canada, will leave Canadian emissions in 2020 at least 7% above rather than 17% below their 2006 level.

In contrast, both the European Union and California have adopted serious fuel and technology regulations that independent experts agree will achieve the more aggressive 2020 emissions targets of these jurisdictions. Both governments also recognize that it is futile and foolish to spend money on domestic emission reductions if these are offset by higher emissions elsewhere. It makes no sense to switch to hybrid-electric cars in California if the resulting increased demand for electricity is provided by coal-fired power plants in Arizona or Alberta. And it makes no sense to improve vehicle efficiency if a growing amount of gasoline sold in California is produced from high emitting production processes, like that of the Alberta oil sands. This is why California has adopted a renewable portfolio standard for electricity, that restricts imports of high emission electricity, and a low carbon fuel standard for vehicle fuels, that restricts imports of high emission gasoline and diesel. There really is no other way to act responsibly in a world in which global-scale emissions pricing is unlikely to happen any time soon.

In the same vein, Europe is trying to finalize the implementation of a Fuel Quality Directive that looks upstream to consider the emissions caused by producing a given fuel, and restricts market share for high emitting sources, including oil from the Alberta oil sands. If one takes a regulatory approach to climate policy, as Stephen Harper professes to support, these are the kinds of regulations you have to implement. They are messy. But there is no alternative to such regulations that try to distinguish and restrict higher emission fuels and technologies, whether the high emissions occur at the point of consumption or production.
 
This is why it is so ironic that the Harper government, with its “apparent” preference for regulations, has undertaken an aggressive lobbying campaign to convince Europeans to emasculate their Fuel Quality Directive so that Canada’s high emission oil sands are treated no differently than low emission sources. It has been joined in this effort by the Alberta government and, of course, the oil industry. All together, the Harper government’s approach can be summarized as follows. (1) It promises to reduce emissions by a specific amount. (2) It promises to use regulations to meet its emission promises. (3) In 7 years, it has not implemented regulations that would meet its emission promises. (4) Instead, it lobbies Europeans to prevent regulations that would actually help Canada achieve its targets.
 
Tired of this hypocritical position of the Canadian government, some European politicians invited Jim Hansen and me to Europe in early May of this year to provide an alternative perspective, one that focuses on how to achieve the promise that Harper and other global leaders made in 2009 to prevent global temperatures from increasing more than 2° C in this century. [For Jim's perspective on this, see this post]. In Brussels we spoke to an audience of European parliamentarians (as well as Canadian and Albertan government lobbyists who seemed to be tracking us). In Berlin, Paris, London and The Hague we met with elected officials, senior bureaucrats, and senior political advisors to Chancellor Merkel of Germany and President Holland of France. We also met in London with the UK Minister of Transport and appeared before a parliamentary committee.
 
As a climate scientist, Jim explained that the 2 °C promise of Harper and other leaders means that most fossil fuel resources on the planet cannot be burned; virtually all leading climate scientists agree that these are “unburnable assets” if we are not to exceed a 2 °C increase. As an energy and environment economist, I explained that virtually all leading energy system analysts agree that the oil sands, and other unconventional oils, should not be rapidly expanding. As a team from MIT said in a recent report, “The niche for the oil sands industry seems fairly narrow and mostly involves hoping that climate policy will fail.”
 
How was our tour?
 
To be honest, I was shocked at how warmly we were received. I think every person we met mentioned several times how happy they were to finally meet a Canadian who was not trying to convince them that expanded oil sands production (and hence greater carbon pollution and climate change) was in their interests. I left feeling that many European politicians will work hard to sustain their climate policy, difficult as this is with economic concerns so dominant.
 
But will the Europeans have the fortitude to stick with their policy? That’s more difficult to say. Lobbyists for oil companies with a lot of money can wield a lot of influence. And when they have a national government using all sorts of trade threats and diplomatic pressure on their behalf, their power is that much greater. Still feels like these are very dark times for us all.