POLICY OPTIONS: Mr. Baird, thanks for doing this. In January 2007, when you became the environment minister, you were sworn in on a day of a January thaw when you didn’t even have to wear a coat to Rideau Hall. And now in 2008, we’re coming out of the longest winter in history. There’s never any global warming around when you need it. Is that a measure of some of the progress that’s been made on your watch?

JOHN BAIRD: I have had more than one person, after all the snow we’ve had this winter, confide in me they wanted Rona Ambrose back.

PO: It seemed to me that you had a three-pronged strategy in the rollout period after January 2007. One was to attack the Liberal record on Kyoto, particularly on global warming, and to deconstruct Mr. Dion’s own record during the time that he was in office. Second, to consult the stakeholders, the business community and the provinces. And, third, to work on the international aspect of a strategy.

But at the time, you didn’t really have a product. Now, a year and a quarter later, how do you measure the progress?

JOHN BAIRD: I think today Canada has a credible plan to absolutely reduce greenhouse gas emissions by 20 percent. It’s thoughtful, it’s measured, it’s achievable. It’s the result of a significant amount of work with industry, with environmental groups, with the provinces. We’ve got to move away from what might have been, if Canada had begun acting under the previous government, in terms of what real and meaningful achievement can we accomplish by 2012, or by 2020, and that’s what we’re committed to do.

We’ve got a reductiom of 330 mega-tonnes over what business as usual will be by 2020 an absolute reduction of 20 percent over 2006 levels. We’ve put forward a specific, tangible plan that’s achievable, that will deliver that reduction, the centrepiece obviously of which is the one action of a 165-megatonne reduction in greenhouse gases from the large final emitters.

PO: So that in terms of both domestic and global objectives, the target is 20/50, 20 percent reduction by 2020 and at least 50 percent, if not 60 to 70, by 2050. So the question there on the international side is the Prime Minister’s been trying to sell this product, or these objectives, at the G8, at the Commonwealth and the APEC Summit, probably at the Francophonie this fall in Quebec City when they meet. It was on the table obviously at Bali. What is your sense of how we are doing in terms of moving along a new emerging international consensus, if one could call it, a post-Kyoto framework?

JOHN BAIRD: Any post-Kyoto framework has to have math behind it. If we want to see, as Canada does, at least a 50 percent reduction globally, we’re prepared to do more. Canada is a rich country. We can lead by example. We’re prepared to do 60 or 70 percent ourselves. But if we’re going to get to that absolute 50 percent reduction globally, we’ve got to work our way back on the map.

If Canada and every Kyoto signatory country, combined with the United States, were to eliminate 100 percent of the greenhouse gases, by 2050 [global] emissions would almost double. So it’s obviously unattainable to continue to go down the trajectory that we’ve gone. Industrialized countries have got to take leadership, they’ve got to do more. We strongly support common but differentiated objectives for each country. Obviously, a country like Canada can do a lot. A country like Sudan can do not nearly as much. But there is something in between, a country like China, a country like India, a country like the United States who have got to accept reduction plans, reduction targets between now and 2050.

And I was asked, has Kyoto been successful? Kyoto has galvanized the world into action, but emissions are going up in both the developing world and the developed world. And we simply don’t want to export our carbon emissions, carbon leakage as some referred to it, from Canada to China. We can close down steel mills in Hamilton and you simply buy the steel from China. But that will actually make matters worse because we won’t be producing efficiently in China, plus you’ll have the transport of getting it to the other side of the world.

We can close a coal-fired generating station at Lambton and buy dirty coal-fired electricity from Michigan. We’ll have reduced our emissions in Canada but it’ll be neutral across the border, plus we’ll continue to have the smog and that air quality that comes from it. And the price will be about 50 percent more and soon industry will just move to Michigan.

PO: So part of the problem here in the Kyoto framework is that while China and India, for example, are signatories, they had no binding targets. That’s 25 percent of the world’s emissions and the Americans, who have another 25 percent, walked away from the table. Fifty percent of the world’s emissions were in the pockets of three countries that weren’t doing anything about it.

JOHN BAIRD: Yes. I mean, the decision by the previous American administration not to submit Kyoto for ratification in the United States Senate obviously was a problem. So what is it, what have we learned from that: not having emerging economies, major emerging economies like China and India, on board has been a problem. What have we learned from that?

It means, we need to get everyone on board, everyone with an oar in the water and everyone rowing together. Now some oars will be bigger than others and some will require greater power. But we need to get everyone on board in agreement to see emissions stabilize in the world by 2015, and then it’s the absolute reductions, and we can’t do it with only 38 or 39 countries out of 188. It will not be successful.

PO: Everything that you laid out in your guidelines of the 10th of March can clearly be achieved by regulation rather than legislation. So there’s no apparent need to come back to the House of Commons with a bill on any of this, is there?

JOHN BAIRD: Well, we’ve had an opportunity twice in this session of Parliament to have our environmental agenda voted on. We clearly laid it out in the Throne Speech, which got the support of the House of Commons. We clearly laid it out in a debate of non-confidence in the government’s environmental programs. And we succeeded both times in the House of Commons. We’ve got a mandate. We first got it in the last fall and it was reconfirmed this March.

PO: But there’s no need for further amendments.

JOHN BAIRD: No, we’re going to use the Canadian Environmental Protection Act.

PO: Okay. Now obviously there’s some success stories to be told here. Sequestration is one of them. In Saskatchewan in particular, there are some big industrial examples like EnCana that I gather you’re familiar with, that you’ve seen up close.

JOHN BAIRD: You know, I met with two scientists from the Intergovernmental Panel on Climate Change in Paris when they released their first report in 2007, and it was a report to policy-makers, just presenting the science. And it basically says here’s the problem; the solution is up to you. So I asked the two scientists, if you were minister of the environment of Canada, what would you do? The first one paused and wasn’t quite sure what to say. The second one paused and said two things: cultural change and technology. And there’s a lot of promising new technologies out there. There’s a lot of research and development that’s needed, but we’ve got a lot of technologies that exist, that have demonstrated that they work. They’ve just got to be commercialized. Carbon capture and storage is one of those. It’s being used on a mass scale for full commercial basis with EnCana and the University of Regina in Weyburn, Saskatchewan. It works. It’s been verified to work.

They’re using it for enhanced oil recovery, so we have great potential to expand this. But it needed a solid push from government and that’s why the mandate for new coal and for new oil sands initiatives to be held to the standard of carbon capture and storage will be enough to see operations be built with a capacity to capture these emissions and then transport and sequester deep in the ground.

PO: So you’re talking about not just sequestration but commercialization of processes.

JOHN BAIRD: You bet. That’s not the entire answer but it’s a big, big part of the answer. There is no one silver bullet to this. What works in the chemical sector might not work in forestry. What works in the oil sands doesn’t necessarily work in cement.

PO: Can you explain three points that jump out from your plan? The tech fund, carbon trading and offsets: what are offsets, for example?

JOHN BAIRD: Offsets are quantifiable, measurable reductions in the non-large-final-emitter sector. So basically reduction in carbon emissions from the non-big polluters. So that could be everything from the landfills— the municipal landfill site in Winnipeg is not capturing the methane, which is a potent greenhouse gas. If an enterprise can capture that, perhaps use it for energy, electricity generation, they’ll be eligible to sell those credits on an exchange, which would help provide a revenue stream to support that activity, and that could be used by a company that isn’t able to deploy the technology as quickly as they’d like and they’re having to comply with the legislation and the regulations beforehand.

PO: Now what about this notion of a carbon exchange? It’s a big idea in Montreal, obviously, and other centres such as Toronto have their own views on that. Clearly Montreal is going to go ahead.

JOHN BAIRD: Montreal is going ahead. They’re moving full steam ahead. They are aiming for late May to get their emissions trading system up and running. I’ve had six or seven meetings with the Montreal Exchange. They looked at the substance of our March 10 announcement and for the first time felt they had enough certainty to move ahead and open a carbon market, which is the first one in Canadian history.

Experts like those at the Montreal Exchange are excited by that. We’re thrilled that they are so prepared and they are moving forward full speed ahead and we’ll do what we can to support it.

PO: And within that notion of a carbon exchange, it seems to me that there’s some industrial sectors that have significant success stories, such as the forestry industry, which has reduced its emissions by 44 percent below 1990 levels. Metals companies such as Alcan, which have reduced their emissions 25 to 30 percent worldwide. Is there a market within there for companies like that to be selling some of their gains on a carbon exchange?

JOHN BAIRD: People that can exceed the 18 and 2 regime can sell their surpluses on an open market. A lot of companies, a lot of sectors promote that they’ve done a great deal. You’ve mentioned a few that have. I mean, the work with cogeneration is recognized in a regulatory regime for the forestry sector.

PO: There’s one company in British Columbia, Catalyst Paper, that’s reduced its emissions by over 70 percent.

JOHN BAIRD: And Alcan is a phenomenal leader. So is Dupont, now invested in their chemical plant in eastern Ontario. So there’s a few actors, industrial actors, market participants who have done a phenomenal job. And they will sell their surplus credits.

PO: What about the role of the provinces in all of this? I mean, you’re the environment minister in a national government. But environmental issues are not respecters of either provincial boundaries or national borders, obviously. We saw that in the acid rain talks with the provinces and the United States back in the 1980s, before the signing of the Acid Rain Accord and the Clean Air Act of 1991. Different provinces have different outlooks, obviously. British Columbia has come in with a carbon tax. Alberta has the oil patch and the oil sands to think about. In Ontario, they make cars. Quebec is a big proponent of Kyoto, but guess what? They’ve got clean hydroelectricity. How do you bring all these elements together?

JOHN BAIRD: There is not a national consensus on what action needs to be taken with respect to global warming. We have talked about this issue for a decade. Meanwhile, emissions have skyrocketed. It’s unacceptable. There is not, I think, a compromise to be had. The premiers have got together I think on three separate occasions and have not been able to come up with a unified position. The parties in the House of Commons have tried to come up with a unified position and a consensus and they have been unable to.

Industry has been unable to as well. That’s why what’s required is national leadership. We respect the fact that the environment is a shared jurisdiction, and we’ll work constructively with the provinces, but at the end of the day, we have a responsibility to act. It took 40 years to change public attitudes towards smoking and to promote smoking cessation initiatives. We don’t have 40 years for that type of cultural change on this issue.

We have an immediate problem that demands an immediate response. We’ll work constructively with provinces but at the end of the day, we’ll have a national plan. We can have provincial equivalency agreements. The two examples you’ve cited: people can complain that Premier Stelmach and his government are not doing enough, but they’re the only government in the country doing anything to regulate large final emitters, the only government in the country regulating the big polluters.

British Columbia has taken a somewhat different approach. They’re going to use a cap and trade on the large final emitters and they’re beginning a carbon tax on the non-large-final-emitter side. I don’t think that conflicts with our position. I respect Gordon Campbell, I respect Carole Taylor. We’ll work constructively with them to make sure that our national numbers work with their plan to regulate the large final emitters. And Alberta will do the same.

Obviously, it’s different in Alberta because they’re actually doing it today. PO: Let me ask you about the example of the Lower Churchill. There’s 4,000 megawatts of undeveloped capacity there that Newfoundland could easily find a market for in Ontario, by building interconnections through Quebec to the Ontario border. But there are obviously historical, emotional issues around the Churchill Falls, the Upper Churchill deal, from 1966. And then Mr. Williams isn’t always the easiest guy to deal with or get along with or have the cutting edge of an agreement with.
Is there some way that the federal government could encourage Newfoundland, Quebec and Ontario to get together on facilitating construction of the Lower Churchill?

JOHN BAIRD: A number of things. First, while we respect that this is provincial jurisdiction, we want to work constructively as a national government with them. We have had a productive relationship with the Newfoundland and Labrador government on this issue. The ministers are constructive. Newfoundland Power has been part of our consultation. We’re certainly open and I’ve indicated to them directly we’re prepared to hear any ideas or suggestions so that our regulatory framework might enable the transmission of clean electricity to any province in Canada, whether that’s Nova Scotia, or Ontario.

PO: And Ontario has something that’s dear to its heart, called the auto industry. Detroit’s on the other side of the tunnel, and the bridge, from Windsor, the home of the auto industry in North America. How can we have different emission standards within the context of the Autopact and the North American Free Trade Agreement from Canada to the United States and Mexico? Do we go to the CAFE standards, the corporate average fuel economy of Detroit?

JOHN BAIRD: It would be very problematic to have 14 different auto emissions standards in Canada, let alone the United States. We know that the Environmental Protection Agency in the United States has not given California their waiver. I think all of the major presidential candidates have committed to providing that waiver. So it will happen. I just think we’ve got to be careful when everyone wants to point to someone else. In Quebec, they don’t make cars, so they say Ontario really needs to bring in the California auto standards. In Ontario, they say, you know, it really should be the oil sands. At some point, you can’t point and say it’s got to be anyone but me. We’ve already committed to go from 28 miles per gallon to a mandatory— for the first time in Canadian history— a mandatory 35-mile-per-gallon minimum, which is a huge step in the right direction: a huge step is obviously setting a mandatory vehicle emission standard, which has never been done in Canada. Lawrence Cannon, the Minister of Transport, my colleague, is consulting with industry and will be coming forward in short order with more details.

I think a clean Autopact with the United States would be good. We don’t want to send a signal…the next time one of the Big Three is going to be building a plant in Canada or the United States, that it would be put in Michigan over Ontario because of any government decision, nor if they had to close one plant, to have this weigh in on it. So obviously, we support a common North American standard. As high as we can make it, working with the United States and Mexico, the better.

PO: So, a common CAFE and emissions reduction standards within North America, within the NAFTA framework?

JOHN BAIRD: A high one would be awesome.

PO: There’s a growing call for governments from some of the business sector to move to a price on carbon with even some calling for carbon tax to drive reductions in greenhouse gases, and as you well know, BC has recently taken a step in this direction. What are your thoughts on that?

JOHN BAIRD: BC is taking a step in the non-large final emitters, the nonbig-industry part. The first thing is we’ve got to make a decision about what we’re going to do to control our greenhouse gas emissions. The government constantly changing its mind is distinctly unhelpful. Stéphane Dion and the Liberal Party have said on two dozen occasions that they strongly disagree with the carbon tax, and they’ve now said a dozen times that they strongly agree. They’re like a driver, the annoying driver of a car in front of you on the highway, that can’t pick a lane. Well, we’re not going to get anywhere until we get on with it.

We’re moving full speed ahead with our plan to regulate the large polluters. We can set a price of carbon, allow the marketplace to set a price on carbon through our regulation of the big polluters. This signals, and the paper we put out on March 10 shows a reduction, means a price that could be $25 a tonne as early as 2010, rising to $65 by 2020. And the market will put that price on carbon, and the large polluters will be required to reduce their emissions or to buy credits elsewhere.

PO: When you talk to the business communities, I’m sure they say to you “The one thing we hate most, Minister, is uncertainty,” right?

JOHN BAIRD: Correct.

PO: And so what are you doing to end that uncertainty?

JOHN BAIRD: Well, there’s no certainty in life. The certainty is if we do nothing, the consequences of global warming will be far more expensive for us not to act than to act. We’re providing a fair degree of flexibility in terms of compliance mechanisms, whether it’s the Technology Fund, whether it’s trading, whether it’s an offset regime, whether it’s clean development mechanisms, or whether it’s real in-house reductions; we’ve consulted but we’re acting now. We’ve got to get on with it and there’s no certainty in any business or for any individual in today’s economy, and we’re doing the best we can to provide a regulatory regime. What is not helpful is constantly changing your mind. You have to pick a lane and get on with it.

PO: It seems that the burden is on private sectors, primarily upon our private and even para-public sector, largely on the oil patch in Alberta, particularly the oil sands and the electricity industry, particularly thermal and coal. Is that a fair assumption?

JOHN BAIRD: I think there would be greater obligations on those industries which generate more carbon emissions. It’s self-explanatory. Obviously, fossil-fuel-generation electricity comes through oil and gas, and the oil sands are major contributors. So too is transportation. So too is the forestry sector. So too is the cement sector. So too is the electricity sector, or smelting sector. Some sectors are bigger than others, obviously, in terms of their output in the Canadian economy. And some are growing and some are declining. And we obviously first and foremost want to grow our economy and we believe we can stabilize or reduce our emissions at the same time.

PO: What about the focus on air pollution requirements that you first signalled in your paper, or your objectives of April 2007?

JOHN BAIRD: We had good consultations on both the air pollutant and the greenhouse gas emission plans. We’re moving full steam ahead with the greenhouse gas plans and are continuing our consultations with industry, environmental groups, health groups at their request on the air pollutant side. We’ll be speaking more to that in the future.

PO: When I was involved 20 years ago with the Mulroney government in the acid rain days and the run-up to Rio and the Climate Change Convention and the Biodiversity Accord, whatever the government was doing was never good enough for the interest groups. No matter what, it was inadequate, it was unsatisfactory. The present government, as would any government, finds itself in the same position, being mau-maued by David Suzuki and so on. How do you manage your affairs with the so-called stakeholders or pressure groups?

JOHN BAIRD: Perfection should not be the enemy of the good. Good shouldn’t be the enemy of perfection: someone wise once said that. I think the constant demand for perfection has not been a positive contribution to this debate. There is no easy solution. We’re moving forward aggressively on a plan.

You know, many environmentalists were strong supporters of Stéphane Dion and the Liberal government. Well, emissions went up by 32 percent. I don’t think they failed. I know they failed. They quantifiably failed. It’s undeniable that they failed.

I was the energy minister in Ontario when the leader of the opposition, Dalton McGuinty, stood up one day in 2002 and promised to close all of Ontario’s coal-fired plants by 2007. The environmentalists cheered. They said it was too long, but at least he was doing the right thing. Well, of course, I stood up in my place in the House and said that it was physically impossible to accomplish and that they couldn’t find one single person in the world who said it was physically possible. It’s 2008 and beyond the one plant that the Conservative government applied to close, they’re all still open. So we’re going to make real, significant promises but those are going to be achieved, and we’re not going to have to come back and delay our promise, as the provincial government is doing in Ontario, until 2014. That was great politics, it was bad environmental policy. It was bad economic policy and in the end, it was an abject failure.

PO: How do you prevent these international gatherings— such as the one where Ms. Ambrose got ambushed in the fall of 2006 and in Bali in 2007, and looking forward to Copenhagen in 2009— from being hijacked by the interest groups? I mean, how do you have them there as part of the discussion?

JOHN BAIRD: I think we’ve got to be ambitious, but at the same time, we’ve got to be realistic. If the United States signs on board to a regime that they have no ability to implement, like they did in 1997 when the government couldn’t even submit the deal to Congress, to the Senate, for ratification, I think we’ve got to be ambitious but realistic. We will not have an effective framework without the United States, China and India, and Canada and the European Union.

So what is it going to take to have a constructive dialogue to push the deal forward? We have failed over the last 15 years. Since Rio, this problem has gotten worse, not better. And if we want to stabilize emissions by 2015, we need everyone on board, and that can mean common but differentiated objectives. It can mean an x-percent reduction for a European country, an x-percent reduction for Canada and maybe even a limited increase, 5, 10, 20 percent, for a developing country. But simply put, we can’t give a blank cheque to anyone on this. All the big emitters are going to have to be on board a solution.

PO: Finally, when you took this job on that day of the January thaw in 2007, the environment was far and away the top-of-mind political issue in the country. It was seen to be a ballot question in an early election. It doesn’t seem to be the case today. Is this an issue that comes and goes in the public consciousness, depending on the economy among other things?

JOHN BAIRD: This issue may go from being the top issue to being the fifth-most-important issue in the public opinion survey, but the challenge of climate change and global warming will be the defining issue for my generation.