SPEECHES

DECEMBER 5, 2005
MONTREAL, Quebec
2005/43

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NOTES FOR AN ADDRESS BY

THE HONOURABLE PIERRE PETTIGREW,

MINISTER OF FOREIGN AFFAIRS,

AT CARBON FINANCE DAY:

UNITED NATIONS CLIMATE CHANGE CONFERENCE

It gives me great pleasure to welcome all of you to the city of Montreal. I am grateful to the IETA (International Emissions Trading Association) and the World Bank for inviting me to open Carbon Finance Day here at the UN Climate Change Conference.

As Mayor Tremblay reminded us a week ago, Montreal is no stranger to hosting groundbreaking global conferences on the environment. It was here, in 1987, that the first international treaty to protect the atmosphere from human impacts was signed. This, of course, was the Montreal Protocol on the Ozone Layer, which has been a huge success.

In addition, the Cartagena Protocol on Biosafety was adopted here in 2000. So we are used to making history in Montreal, and I am confident that we can do so again this week.

The UN Framework Convention and the Kyoto Protocol create an architecture of mechanisms and incentives to contain the destructive effects of global warming. They also provide the flexibility we need—as markets develop, as science progresses, and as history advances—for that architecture to be adapted to these changes.

And that is what we are striving to do this week—to begin designing the future of the climate change regime. As the Prime Minister said to the UN General Assembly in September, we must initiate discussions at this conference to achieve a truly global future regime, one that results in deep and genuine reductions of greenhouse gas (GHG) emissions.

I could not help remembering, as I came here this morning, another international meeting at which I was Head of the Canadian delegation, exactly six years ago. That was the Third Ministerial Summit of the World Trade Organization (WTO), in Seattle. Some of you may remember that meeting.

On many levels, the contrast between this conference and Seattle could not be more marked. Here—I’m happy to say—the protestors are friendlier. They are urging governments to go further, not to retreat, a sentiment that is shared by many people around the globe.

Because it is no longer the case that governments are ahead of their people on this issue. In fact, governments need to face reality and develop tools that will help humanity deal with the danger posed by climate change.

In October, a group of Canadians concerned about climate change wrote the Prime Minister. Here’s what they asked him for:

•         A strong response to the strengthening scientific evidence.

•         The continuation of the Kyoto Protocol’s mechanisms after 2012.

•         Short- and medium-term targets to guide Canada toward the future.

•         The launch of a process and work plan, at this conference, that would support development by 2008 or 2009 of an inclusive and climate-friendly post-2012 regime.

You may be assuming that the authors of this letter were environment representatives. In fact, these were leaders of some of Canada’s largest corporations, including those from the resource and energy sectors. Why are they asking for such things? Because, as forward-looking executives, they recognize that environmental performance is quickly becoming a central determinant of economic success.

They also understand, as you do here today, that market forces can be harnessed to the benefit of the planet.

In other words, by realizing the potential of the global carbon market, we will achieve real world solutions to the issues that have been discussed at length, and over many years, at these international negotiations.

This is why I find it inspiring that we can bring together so many key stakeholders from the industrial and financial world to an event like this, amidst the larger international negotiations.

Here, we will be able to share knowledge and advice on the most recent developments and trends in the global carbon market. This exchange will help all stakeholders work together more closely, and take advantage of new business opportunities.

Of course, the effectiveness of our efforts to reduce emissions will depend very much on the architecture and effectiveness of the international regime.

The Clean Development Mechanism (CDM), Joint Implementation (JI) and emissions trading are the key mechanisms in that regime.

The CDM is a mechanism by which projects can be undertaken in developing countries. In addition to reducing GHG emissions, CDM projects must also contribute to the sustainable development of the host country.

The CDM must become one of the tools employed by developed countries to ensure that the developing world has access to cleaner sources of energy. The CDM will also allow all countries to achieve a more sustainable form of development.

JI projects will be undertaken in industrialized countries with GHG emission reduction targets under the Kyoto Protocol. Along with the CDM, JI will contribute to the transfer of cleaner technologies between industrialized nations.

The effectiveness of these instruments is essential to the success of our global effort to mitigate climate change. Early achievements of the carbon market, such as the recent issuance of the first Certified Emission Reductions under the CDM, are cause for celebration. It is a tremendous achievement that so much has been accomplished with this mechanism in such a short time.

Despite this, we must remember that one important condition for an efficient and effective global carbon market is a stronger, more streamlined CDM. We need simpler approval procedures that require less time to process. To achieve these goals, the CDM requires enhanced and predictable funding as well as improved governance structure.

Canada and many other parties are committed to strengthening and streamlining the CDM—we want to see good decisions on these issues here in Montreal.

Finally, let me speak briefly about emissions trading. I don’t need to tell you that the global carbon market has enormous potential. The issues being negotiated here in Montreal will bring forth new opportunities for that market to include broader participation from parties, businesses and financial institutions from around the globe.

Countries that recognize the value of participating in those markets will reap the benefits of early market presence, and can occupy space ceded by those countries that hesitate.

The Canadian government is conscious of the responsibility it shares with other Kyoto Protocol parties to eliminate or lower barriers to foster international emissions trading without compromising environmental integrity.

In fact, the Canadian government has good reasons to support a strong global carbon market. Canada wants to diversify compliance options for large final emitters, and will become a carbon buyer in the near future. Canada expects that the Climate Fund, a key component of Canada’s climate change plan, will be fully operational in early 2006. This fund will purchase reductions in GHG emissions resulting from innovative projects at home and abroad.

I take this opportunity to congratulate and wish the best to the president designate of the Climate Fund, Allen F. Amey, who is with us today.

You know, over the past year, Prime Minister Martin has given unprecedented momentum to Canada’s environmental policy. In April, the Government of Canada released a comprehensive plan for honouring our Kyoto commitments—a plan, I should add, that has been widely lauded by many nations the world over.

Canada’s climate change plan (the Climate Change Plan for Canada) is designed to spur innovation and technological advancement. This is essential for the long-term transformation that is required to maintain a sustainable and competitive economy in the 21st century.

The plan also seeks to help the private sector maintain its economic strength while being part of the solution to the challenge of climate change—financially healthy companies are vital not just in effectively addressing climate change but in maintaining Canada’s global competitiveness.

I am convinced that the market-based yet socially responsible approach laid out in Canada’s climate change plan will be effective. Over the coming months and years, Canada will continue to work diligently on its national program of action, and will ensure that its Kyoto commitments are fully met.

Internationally, the world has seen a remarkable focus on climate change in the past year. The G8 summit at Gleneagles saw the leaders of the most robust economies on earth recognize that climate change is a reality and that it must be dealt with.

Recently, in Greenland and in Ottawa, ministers have met to discuss the options for a way forward both in Montreal and beyond.

These and other efforts by the international community reflect an increased sense of urgency regarding action on climate change, but many challenges remain.

Canada recently released its International Policy Statement, which highlights the importance of promoting sustainable global development. The statement clearly outlines the critical importance of effectively addressing climate change, and Canada’s desire to play a leadership role in this area on the world stage.

All countries are recognizing the need to make their economies more sustainable and secure by adopting efficient, less polluting technologies and energy sources. This is becoming a priority as the global demand for energy grows exponentially, while we all face rising energy costs and, at some point this century, the peaking of global oil production.

One must remember that climate change is not simply an issue of resource protection. Because the weather so permeates our lives, projected climate shifts will interact dramatically with other global dynamics. This will force economic upheaval, destroy physical infrastructures and systems, and undermine human security.

This is why climate change is not only an “environmental” issue. With potential consequences like these, we are clearly tinkering with epic forces.

That is why I believe it is important for Canada’s foreign policy to promote a new multilateralism, one based on numerous responsibilities, including the collective responsibility to ensure the well-being of future generations.

We have done some amazing things here in Canada. But we know that just because we are hosting the world in Montreal does not mean that we can “magically” create progress on our own.

We know that in order to achieve success, we must, as a world community, begin a journey into the vast undiscovered territory that lies beyond 2012.

I’m sure all of us here would all agree that the process of crafting the Kyoto Protocol was complex, challenging, difficult and often contentious. We all recognize its benefits and shortcomings. But surely, we did not embark on that process only to see it end in seven years.

And make no mistake—what lies beyond Kyoto remains a challenge of environmental governance not seen before by the community of nations.

But we must remember that, despite its shortcomings, Kyoto provides us with a map to the future. It can accommodate the changes that loom ahead, and offer security to the private sector and to markets that will allow them to fulfill their crucial role in tackling the problem of climate change.

As I said at the outset, we are in Montreal to help frame the future of humanity’s response to the most pressing challenge it faces.

We know that difficulties lie ahead, and we are aware of the perils of failure. As complex as the difficulties were in crafting the Kyoto Protocol, I predict that they will seem insignificant compared with the challenge that lies ahead of us in crafting a truly global, inclusive, equitable and effective post-2012 climate change regime.

This challenge begins here in Montreal.

I believe that all of us, together, can meet that challenge.

Thank you.