MONTREAL — The year drew to a close with the United Nations climate-change talks, this time in Durban, again ending in failure to reach an international agreement. Instead, the 192 nations agreed to start work on a new climate-change deal that negotiators hope will be agreed on by 2015 and come into effect from 2020. Earlier this year, a federal election came and went in Canada with very little discussion of climate change. The environment has not been a key element in any political party's platform here since the Liberals under Stephane Dion in 2008, when he lost to Stephen Harper's Conservatives. The Conservative government announced in Durban that Canada was pulling out of the Kyoto emissions accord. It has called the Liberal decision to sign the treaty "one of the biggest blunders" made by that government. Meanwhile, every scientific study shows that the world is on a dangerous path toward catastrophic climate change. Scientists say Canada's mean temperature is increasing at a rate that will exceed by 2020 the 2 degrees Celsius rise that they believe is the tipping point. We asked Dion, who presided over the 2005 climate-change negotiations in Montreal and who was the architect of the Liberals' Project Green and Green Shift programs, how his green plans would have changed the face of the nation had his government remained in power, and what it would take to get climate change back on the political agenda in Canada. Question: If the Liberals had won the 2006 and 2008 elections and implemented your green policies, what kind of a Canada would we have today? Stephane Dion: Canada today would have a price on carbon that would be at $30 a tonne, that would rise to $40 a tonne next February for 75 per cent of our emissions, and even higher in British Columbia since they have a carbon tax. We would be perceived as a country that is doing its share. This was not a stand-alone policy. We had a long list of programs that would have been strengthened by a price on carbon and the recovery plan would have been focused on that instead of being focused on nothing as it is with the Conservatives. Q: You are talking here about your 2005 Project Green and your 2008 Green Shift proposal. But they were criticized as not being ambitious enough to meet our Kyoto commitments and being too much of a burden on our economy, particularly with the United States out of Kyoto. A: Project Green was assessed by independent bodies saying it was not enough but it was going in the right direction. I agreed with that. We would have had to strengthen it in the coming years. That's normal. This plan was destroyed by the Conservatives and replaced by nothing else, but we still have some copies of the plan. They did not burn all of them. We would have started a cap and trade system. Not as strong as I was dreaming of, but under the circumstances of that time I think it was a good start. I would have had stronger programs for boosting science and technology in all directions. The minister of finance at the time was very committed and invested billions of dollars to make sure that this would happen. . . . Some countries were decreasing emissions and their economies were growing. It's possible to link the growth of the economy and the decrease in emissions. The 2008 plan was better than the 2005 plan.

Q: That plan represented essentially an enormous shift in our fiscal base. Explain that. A: In 2008, the plan was to make sure that everything we did was green. At the core of all of this was a green fiscal shift that would have created a carbon tax that would be today at $40 a tonne of CO2. And the trade-off was very meaningful tax cuts for Canadians at around 10 per cent and even more for medium- and low-income Canadians. But tax cuts also for industry and green tax credits if they were doing the right thing. Q: So Canada would have seen a shift away from taxing profits and income to taxing pollution? A: The key point is the following: If you are a CEO of a company and you want to pay less taxes - and all of them want to pay less taxes - if you are taxed on your investments and your profits, you bring around the table your lawyers and accountants and ask them, "How can I pay less taxes?" And they will figure out in a lawful way how to pay less taxes on your profits and your investments. So it is good for the company, but it's not good for the province where you are and it's not good for Canada. It's doing nothing good. But if the government is taxing you less on your profits and investments and starts to tax your pollution, lawyers and tax accountants aren't much help to you. So you gather around your engineers and you will ask them, "How can I pay less tax?" And then they will say, "Now that you are asking the question, we have a lot of ideas about how to decrease your carbon footprint; we have a lot of contact with the research centres in the province where you are." So it will diversify the economies of (some provinces). Q: Do you think that these plans would have enabled Canada to meet its commitments under Kyoto? A: I am quite confident of that. We would have been helped by the world recession when emissions were not growing at the same pace. But I am confident that today Canada would be, if not at its target, at least close to it. When industry has to figure out how to pay less taxes, it's a very powerful and effective incentive to do something. Q: What do you think is the single most significant reason for the failure of climate-change negotiations? A: It's a fact that it is difficult to form public policy around climate change. You have the free-rider effect. That is, the gain you get from taking action is not something that you can see. You close the six or so coal-fired power plants they have in Ontario, it would take a month and a half for China to nullify this effect because they are building so many coal-fired power plants. The oilsands of Alberta, it's only 0.1 per cent of the emissions of the world. So if Albertans were fixing their problems with GHG emissions, it would not stop the glaciers of the Rocky Mountains from disappearing and putting at risk the water supply in Alberta. . . . The oilpatch lobby is by far the biggest lobby in North America and they are focusing on climate much more than any other issues. Mr. Harper himself is closely linked to them. There is no doubt in my mind that many members of the caucus in the Conservative Party do not believe that climate change is man-made. So for these reasons, it's very difficult to mobilize collective action internationally to fight climate change.

Q: What would you do to break the logjam? A: What I think we need is a world price on carbon emissions instead of a hard cap (on emissions). I think it would be less difficult for China or India to accept a world price on GHG emissions instead of a hard cap. . . . It would not cap their emissions but it certainly would create a strong incentive to boost the non-polluting sources of energy. It's time to shift the debate from asking each country to accept an emission-reduction target toward another model where we ask all the countries to accept the same greenhouse-gas-emissions price. Q: Would you shift the emphasis completely from emission-reduction targets to a price on carbon? A: No, because the aim remains the same: to decrease our emissions as much as possible. This is the goal. What should be done is to bring the scientists and economists together to tell the politicians what should be the price to keep the warming below the 2 degrees Celsius threshold. According to the United Nations, the price is something like $45 a tonne. And once they have accepted that, it is up to the politicians to put it into the World Trade Organization rules. So a country that will not respect this threshold through a cap and trade system, this country would be exposed to retaliations at the borders of the other countries. I'm not telling you that it will be easier. But maybe it's simpler to have these types of negotiations at the G20 than to wait until 2015 to see if, by a miracle, some countries will change their stand (at the UN negotiations). Q: So far the carbon markets have not been effective in reducing greenhouse gases. Why do you think it would be any different if the world agreed to a global price? A: You are right. For example the biggest carbon market we have today is the European scheme and the price is so low that it does not make a difference. We are paying a lot of money to companies that are barely doing anything (to reduce their emissions). Many experts are coming up with completely new schemes where you have a bottom line that is the (carbon) tax and if you want to do more than that it is the market that is involved. So a kind of mixed system. I don't think it would be wise at the outset to say that the only way that you can get your price threshold is the fiscal system. I think we should keep it open (to carbon markets). Q: Does Canada's reluctance to reduce its greenhouse-gas emissions have any significant effect on these negotiations? A: Yes. In 2005, Canada was considered a leader. We were chairing the climate-change conference. We made it a success. We had a credible plan to reduce our greenhouse-gas emissions. It was Project Green. Project Green wasn't perfect, but it certainly would have slowed down the growth of our emissions and started the reductions. In order to meet our commitments under Kyoto, we would have had to improve it and I think Parliament would have done that year after year, and today we would be in a good position. Instead of that, the Conservative government burned Project Green and replaced it with nothing. The plan we have now is a farce. It is mostly subsidies for ethanol with dubious consequences for the planet. It is subsidies for capture and storage of emissions coming from coal and the oilsands. There are a bit of subsidies for renewable energy and technologies but it is very weak if you compare it with other countries including the United States. It has regulations on transportation and coal emissions that are so weak they are barely more than the status quo. So Canada has no credibility internationally and is perceived as a country that wants to do as little as possible, and doesn't want to be pushed by a strong international agreement.