In the annals of international efforts to stop climate change, a “Weird but True” chapter might focus on the effort by Liberal and Conservative governments alike to claim Canada deserves massive environmental credit for selling the U.S. a billion dollars a week’s worth of oil and gas.

The idea that Canada deserves thanks for its place among the world’s top carbon exporters is a perennial favourite among officials hammering out Canada’s role in the Kyoto climate change treaty. And as the Stephen Harper administration vacillates about its commitment to the agreement, Canadian officials began lobbying for the notion again two weeks ago at talks in Germany.

They’ve tried to persuade the rest of the world that because Canadian oil and natural-gas exports reduce U.S. reliance on coal, an even dirtier fuel, we’re doing the world a favour: Canadians should be rewarded for their environmental altruism, not just by pocketing the profits, but by racking up valuable credits to generate more pollution.

At meetings around the world and an international summit financed by Ottawa before Canada ratified the Kyoto Treaty in 2002, Canadian diplomats insisted Canada should be allowed a 25 per cent increase in carbon emissions at ho me because of the carbon we send abroad.

Reaction to what observers dubbed Canada’s “Trojan Horse” proposal was hostile, and negotiators came away empty-handed. But successive governments have maintained a website promoting the idea ever since.

“We need to look at how to mitigate our pollution levels,” a senior adviser to Environment Minister Rona Ambrose said in a telephone interview. “This is an example of the kind of specific idea we want to look at.”

“It was a very implausible idea that was soundly rejected after it did great harm to our international credibility,” says Matthew Bromley, an analyst at the Pembina Institute in Ottawa who attends many Kyoto negotiations. “Now, it looks like the government wants to resurrect it. This has a lot to do with protecting powerful sectors like coal and oil and gas.”

Mark Jaccard, a Simon Fraser University energy economist who published a report this week criticizing Canada’s Kyoto strategies, says the idea was bogus from the very start. “The vast bulk of the Canadian energy exports aren’t clean,” he says, noting that Alberta’s tar sands produce more pollution than almost any other source of energy on earth. “Even natural gas ….. is actually a very dirty fuel.”

Among fossil-fuel-exporting countries arguing for compensation within Kyoto, Canada is in unusual company. OPEC nations such as Saudi Arabia and Nigeria claim they will deserve financial compensation if oil consumption drops because of Kyoto. Before opting out of the treaty, Australia also strongly argued that Kyoto threatens its fuel exports, and its prosperity. Partly on the basis of this argument, Australian negotiators won very relaxed emissions targets.

“We got credit for doing nothing. It was very clever,” boasts Warwick McKibbin, an economist at the Australian National University who advised the Australian government in the matter.

By contrast, Prof. McKibbin says, Canadian negotiators had not prepared enough scientific evidence when they negotiated Canada’s emissions targets, which are among the most onerous. “They only came up with the idea of getting credit for clean energy exports after they’d agreed to utterly implausible targets,” notes Prof. McKibbin.

After Australia’s success, Rick Hyndman, senior climate-change adviser to the Canadian Association of Petroleum Producers, commissioned American consultant David Montgomery, who advises OPEC nations on Kyoto, to study impacts on Canada. He concluded that due to its dependency on energy exports, Canada’s prosperity would be affected by Kyoto more than any other non-OPEC nation’s.

“We commissioned Montgomery’s study to put the issue on the table,” says Mr. Hyndman.
Canadian oil and gas producers strongly argue that countries that import fossil fuels should pay pollution credits to the countries that export these fuels. This idea became a centrepiece of Canadian carbon-brinkmanship strategies.

Ron Ezekiel, a Vancouver trade lawyer who closely follows Kyoto compensation claims, says Canada is “swimming upstream” with this notion. If Canada got its way, he says, “you can just imagine the conversation the Russians will have with the Europeans who buy all their oil and gas. It’s a zero-sum game.”

David Reiner, a Canadian political scientist at Cambridge University who studies the role of energy-exporting nations within Kyoto, says there’s “considerable irony” in the prospect of Canada developing the massively pollution-intensive tar sands to fill U.S. gas tanks while pleading for pollution credits because it also exports gas and hydro power.

“As an exporter of massively carbon-intensive oil, Canada should be penalized,” he says.

But in Washington, Mr. Montgomery says the Canadian government is doing the right thing. “If I was a Canadian negotiator, my strategy would be to make this argument in negotiations and hold out for higher limits on emissions,” he says. “It’s a perfectly sensible strategy. Everyone wants to appear green without doing anything.”