Canada report defends saying no to Kyoto target

By Allan Dowd

VANCOUVER, British Columbia (Reuters) - An attempt to force Canada to say how it will meet its Kyoto Protocol targets for reducing greenhouse gas emissions has produced a government report warning that doing that will damage the economy and drive up energy costs.

The report, released quietly by Environment Canada on Tuesday, instead promotes the Conservative government's alternative to Kyoto. But it also acknowledges emissions in 2012 will be 31 percent higher than the Kyoto target and only slightly below what they were in 2005.

The Conservatives say Canada cannot meet its commitments set out under the Kyoto treaty, which was signed by a previous Liberal government.

The report drew fire from an environmental group, which said it falls far short of a law that requires the government to outline how Canada will meet Kyoto targets of reducing greenhouse gases by 6 percent from 1990 levels by 2012.

"The document spends more time talking about how we're going to fail than how we're going to succeed," said Clare Demerse of the Pembina Institute.

The new law making it mandatory for the government to come up with a plan to implement Kyoto was pushed through Parliament by opposition parties, against the wishes of the minority Conservative government. Prime Minister Stephen Harper threatened to ignore the law, but agreed to obey it after the opposition threatened to sue.

A spokesman for Environment Minister John Baird denied the report fell short of what Parliament wanted. "We think the Liberals missed the point when they signed on to Kyoto," Mike Van Soelen said.

The report echoes the government's complaint that meeting Kyoto targets is unrealistic now because Canada has allowed its emissions to grow since signing the treaty, and they are now 27 percent above 1990 levels.

Canada's gross domestic product projections for 2008 would fall more than 6.5 percent if the country strictly adhered to its Kyoto targets, with employment levels falling about 1.7 percent, the report says.

"This would imply a deep recession in 2008, with a one-year net loss of economic activity in the range of C$51 billion relative to 2007 levels," it says.

The report also warns that electricity prices would have to increase by 50 percent and transport fuel prices by 60 percent.

The Conservatives released an alternative plan in April using intensity-based cuts, which they said would reduce greenhouse gas emissions by 20 percent below 2006 levels by 2020. The proposal was widely panned by green groups.

The Liberals said the report is proof that the government's plan will not reduce emissions, but Van Soelen said it was it was an approach that balanced the needs of the environment with those of the economy.