With yesterday’s election of President-Elect Obama, Canada will now be forced to get serious about climate change. Obama has pledged to Implement an economy-wide cap-and-trade program to reduce greenhouse gas emissions 80 percent by 2050. In order to keep selling into the American market, Canadians will have to do something similar.
Obama’s plan is far more wrenching and ambitious than the modest Green Shift which Canada rejected last month. Obama has promised that 100% of the pollution credits will be auctioned, in order to invest the proceeds in “a clean energy future, habitat protections, and rebates and other transition relief for families.” A 100% auction system is likely to impose high costs on coal-based and older industries, while benefiting renewables, conservation and innovation.
- Obama has also promised to make the U.S., our major trading partner, a world Leader on Climate Change. He wants to re-engage with the U.N. Framework Convention on Climate Change (UNFCC) — the main international forum dedicated to addressing the climate problem. He will also create a Global Energy Forum of the world’s largest emitters to focus exclusively on global energy and environmental issues.
Canada has not had a high profile in the Obama campaign- notably, he didn’t even visit here. But his program offers us great risks and opportunities. For the energy industry, Obama’s pledge to eliminate oil imports from the Middle East and Venezuala in 10 years will make our oil sands a tempting part of the American oil supply. At the same time, Obama may demand that oil sands products imported to the US become part of the cap and trade system, or otherwise bear part of the cost burden of climate change. He is committed to a natural gas pipeline from Alaska, such as the one TransCanada plans to build through Alberta. He has also promised to keep jobs at home, suggesting that he will give every possible preference to domestic energy production, biofuels and conservation, and will be reluctant to allow high carbon industries (such as refineries) to simply build offshore.
For Ontario’s battered auto industry, Obama has promised dramatically higher fuel economy standards, including a pledge of 1 Million Plug-In Hybrid Cars on the Road by 2015. American car makers will get $4 billion to retool their manufacturing facilities to build the new vehicles in the US; nothing similar has been promised in Canada. He also promised:
- Create a New $7,000 Tax Credit for Purchasing Advanced Vehicles.
- Establish a National Low Carbon Fuel Standard.Obama and Biden will establish a National Low Carbon Fuel Standard (LCFS) to reduce the carbon in our fuels 10 percent by 2020. Obama and Biden will also require 60 billion gallons of advanced biofuels to be phased into our fuel supply by 2030.
- We congratulate our American friends and colleagues, and wish them every success with their new president.