The Kyoto protocol vs. The new kid in town

A trial balloon? Or a real shift in Canada's environmental policy? Federal Environment Minister Rona Ambrose caused quite a stir the other day when she mused, on a trip to Washington, that Canada might join the U.S.-led group called the Asia-Pacific Partnership on Clean Development and Climate, also known as the AP6 or, more pejoratively, Kyoto Lite.

Ambrose left her options open. But, really, all she was doing was expounding on a notion that Stephen Harper himself had put forward in the midst of the election debates. And, as we are starting to see more of, the prime minister's slightest musings seem to have a way of getting carved into stone.

In any event, the AP6 is an intriguing concept, even if it's not everyone's cup of tea. Composed of six countries – the U.S., China, India, Australia, South Korea and Japan – the group was conceived just a year ago, had its first working meeting only this month and, on the surface at least, expounds a rather noble purpose: To help the developing economies of China and India in particular make their great industrial leap forward by using the best, most environmentally sound technologies the world can offer.

The fact that the U.S., China and India are among the top producers of climate-warming greenhouse gases on the planet gives their cause a bit of urgency. (The U.S. and China rank one and two, while the group itself accounts for over one-half of the world's carbon dioxide emissions.)

Also, the fact that all but Japan is bound by the UN's Kyoto protocol has given the AP6 a kind of renegade status, particularly among European governments and other keen Kyoto proponents.

Kyoto Lite?

Most environmentalists aren't impressed. As a technique for controlling greenhouse gas emissions, the AP6 sets no emission targets, mandates no deadlines and therefore does nothing to create incentives for companies to control emissions and sell surplus quotas.

Even some prominent Republicans, looking at the meagre US$57 million Washington has allotted this project, have called it a largely PR exercise, a face-saver for countries like the U.S. and Australia that chose not to ratify Kyoto and are now facing the international heat. (China, India and South Korea, though Kyoto signatories, were exempted from this first round because of their status as developing countries.)

An iceberg floats off Greenland near the Arctic circle last year. Scientists say that global warming has had an increasing effect on the Arctic region, with glaciers shrinking, the temperature of Arctic waters warming, and permafrost softening. (John McConnico/The Associated Press) » See Reality Check: Life support for the Kyoto protocol

Still, the AP6 idea is starting to gain momentum. British Prime Minister Tony Blair, though an ardent Kyoto supporter, has voiced his approval. One selling point is the AP6 theory, based on computer modelling, that if China and India were to adopt current best practice techniques for all their new power plants, that would reduce worldwide greenhouse gas emissions by 1.5 per cent.

And Canada is not the only Kyoto-wary nation kicking the tires: Brazil, Mexico and Russia, according to reports, have also expressed some interest in joining.

In many respects the jury is still out on this venture. Is it simply PR for the Kyoto-bashers? Or real enviro-politick for the developing world?

Or is it merely about selling coal?

The coal pact

That is the other nickname for the AP6 and when you look at economics of the world's cheapest, most abundant and arguably most polluting energy source – king coal – it is not hard to see why.

China is the world's biggest coal user, for its generating plants and its steel mills. And though it has plenty of its own reserves, its mines are backward and dangerous and, at its current rate of growth, forecasters predict it will need to import much more in coming years.

What's more, the four Asian members of the AP6 account for over half the world's steel production. Steel needs coal, both for electricity and the coking process. And Australia, which reportedly hatched this AP6 idea in the first place, and the U.S. are both big coal exporters looking to expand in the Asian and Indian markets.

It's not hard to connect the dots here. Nor is it difficult to see the attraction in joining the AP6 for someone like Stephen Harper especially.

Australia's biggest competitor in Asian steel markets is Alberta-based Fording Coal, the CPR spin off (annual revenues $2.1 billion) that mines one of the purest and hardest metallurgical coals in the world.

Joining AP6 gets Canada in on the ground in one of the niftiest buyer-meets-seller-meets-hi-tech-enviro marketplaces for coal extraction, power plant development, steel and aluminum mill construction and cement kilns for the fastest growing economies around.

It also allows Harper to showcase – and this is long overdue – the fact that Alberta is not simply the capital of redneck oil grunts, it is also one of the more innovative places in the world when it comes to curtailing greenhouse gas pollution and burning what is now being called "clean coal."

In fact, Alberta's Genesee 3 power plant is one of the cleanest in the world and one of the province's biggest clean coal innovators is former Encana chief Gwyn Morgan who has just become Harper's new $1 a year guy in Ottawa.

Clean coal?

This is an idea whose time may have come. Even some prominent environmentalists who can't stomach the nuclear option are urging clean coal technologies on a reluctant Ontario government to help with its electricity problems.

Still, clean coal is a concept that has to be taken with a grain of salt. Scientists, particularly in the U.S. where coal production is a huge political consideration (read massive Washington investment), have come up with intriguing new ways to cut methane gases (a mine as well as atmospheric hazard), as well as capture CO2, mercury, sulphur oxide and nitrous oxides (these last two acid rain formers) before they are released into the environment.

The problem, though, especially for CO2, one of the most ubiquitous of the greenhouse gases, is what to do with it once it's caught. It is still a gas. Technically it can be stored in containers or underground caverns. Norway has been injecting about a million tonnes a year of CO2 under the North Sea.

One of the neatest solutions, which Encana was a big proponent of, is to pump it back into old oil beds deep underground, a process called geosequestration, to help push remaining oil deposits to the surface. But this is really only economically viable if the coal-fired generating plants are within a reasonably short pipeline distance from the oil fields. In other words, only in Western Canada and even then it seems only in exceptional circumstances.

At this point there are many creative ideas but no truly viable way of stripping the more substantive greenhouse gases from coal, or natural gas for that matter, and storing them easily for any length of time.

The Kyoto approach is to saddle countries with emission targets, which will force them to apportion these in turn a mong their major polluters. (Not an easy thing.) These industries then have the choice of paying a penalty if they miss their targets, or buying the latest (geosequestration?) technology even if it is something that only adds to their bottom line.

AP6 seems more carrot than stick. Its market-driven proponents seem to feel that China and India in particular will want to use their new economic wealth to buy the latest climate-friendly technology from the West at the same time as they are loading up on boatloads of so-called clean coal.

And maybe they will. Maybe they will see the advantage in staying ahead of the technological curve and avoiding the respiratory and other health costs associated with too much short-sighted growth.

From Canada's point of view, it must be very tempting to join AP6 and be a potential seller of all this high-end environmental technology that we have been experimenting with for a few years now. But we have a lot of buying to do as well.