Obama's climate challenge will impact Canada, U.S. envoy says

U.S. President Barack Obama's state of the union message to act swiftly on climate change will have an impact on Canada, says the U.S. ambassador to Canada.

Obama used Tuesday's speech to present Congress with a choice: either agree to market-based solutions to climate change, or else the president will use his executive powers to achieve the same result.

U.S. Ambassador David Jacobson said in an interview Wednesday on CBC News Network's Power & Politics that the message to move more aggressively against climate change was aimed at Congress but "obviously there are things about our policies that have significant impact to Canada."

"I believe what he was trying to say was that we, in the U.S., have to do better with respect to carbon, we have to do better with respect to climate change," Jacobson told host Evan Solomon.

The U.S. envoy went on to say, "the president is very serious that we need to do a better job with respect to our carbon footprint — he believes that global warming is a real problem. There is no question, it's a priority."

It was the signal many environmentalists in Canada have been waiting for.

"I see opportunity," said Megan Leslie, the NDP's outspoken environment critic.

"Canadians have not been well-represented by our government on action on climate change. Fortunately for Canadians, though, the Harper Conservatives will have little choice but to follow suit or risk our trading relationship with our biggest partner."

U.S. action on climate change has been piecemeal over the past few years as Obama's initiatives met with stiff Republican resistance. Ottawa has vowed to move no faster than the U.S. for fear of risking Canada's competitive advantage.

Indeed, Conservative MPs have made a daily sport out of criticizing carbon taxes and cap-and-trade schemes.

But now that Obama has suggested he wants to crack down on emissions, either through a market-based approach or regulations, Canada is going to have to regroup, said Alex Wood, senior director at Sustainable Prosperity, an Ottawa-based think tank.

"The question is whether we will be able to keep up," he said. "We may have to pay a price for not having a serious policy around climate change."

Ottawa has opted to take a regulatory approach to emissions, imposing restrictions on industry sector by sector in a process that is taking many years to unfold and decades to implement. At last count, federal and provincial measures taken together still only get Canada half way to meeting its emissions reductions targets by 2020.

That leaves the as-yet-unregulated oil and gas sector to make up most of the difference, and negotiations with that industry and Alberta are proving difficult.

Still, the initial government reaction to Obama's climate change agenda was nonchalant.

Natural Resources Minister Joe Oliver said the president's speech contained a little bit for everyone on all sides of the climate debate.

"And therefore I don't feel any different than I did before the speech," he said.

While Environment Minister Peter Kent has suggested in the past that Canada might consider a cap-and-trade system to control emissions if the United States moves in that direction, Oliver was dismissive of that idea Wednesday.

"This is quite speculative. It doesn't look like Congress would be supportive of that. They've rejected it historically, and we're not in that space," Oliver told reporters in Ottawa.

Still, there are signs federal ministers are feeling some pressure to up their game on the emissions front, especially with the controversial Keystone XL pipeline from the Alberta oilsands through the United States hanging in the balance. Oliver and Kent have both recently spoken about the need "to do more" on Canada's environmental credentials.

Last week, after meeting with new U.S. Secretary of State John Kerry, Foreign Affairs Minister John Baird told reporters that "when it comes to the environment , I think we have like-minded objectives."

"Prime Minister Harper and President Obama have both set a 17 per cent reduction in greenhouse gas emissions, we've worked very well together on reducing vehicle emissions for cars, for light trucks. Canada is aggressively moving forward on our plan to ban and phase out dirty coal fire electricity generation, and we'll continue to focus on that."

"I think we all share the need for a growing economy to create jobs, we share on the desire for energy security in North America, and we also share the objective of protecting our environment for future generations. Those will be areas where we continue to work together," Baird said.

Keystone XL pipeline project

Obama did not mention the pipeline in Tuesday's speech, but he faced calls from organized labour and the petroleum industry on Wednesday to approve the project immediately — even as protesters in the U.S. geared up for a demonstration against it this weekend.

In a preview of further protests planned for Sunday, prominent U.S. environmental leaders — including Michael Brune, the executive director of the Sierra Club — were arrested Wednesday after tying themselves to the White House gate.

Activist Bill McKibben, actress Daryl Hannah, civil rights leader Julian Bond and environmental lawyer Robert F. Kennedy Jr. were also arrested, along with several dozen other activists.

Washington-based stakeholders from both sides of the border increasingly suspect Obama is going to try to extract from the oil industry and Republicans some kind of quid pro quo — either a carbon-pricing scheme or limits on greenhouse emissions from existing power plants in exchange for approving Keystone.

"He's a deal-maker," said a source close to the Keystone discussions not authorized to speak to the media. "He wants to get something in return, whichever way he goes."

Such chatter underlines the fact that Canada and the U.S. are "on very different trajectories" since there is no indication that Environment Canada would entertain putting a market price on carbon, said Clare Demerse, director of federal policy for the Pembina Institute, an energy and environment think tank.

Obama's new-found determination on greenhouse gases will no doubt prompt him to assess the Keystone pipeline through an environmental lens, Demerse said. If that pipeline is filled with oilsands bitumen, the implications for emissions are major, both in Canada and the U.S.

Jacobson would not predict when Obama's Keystone decision will come, but told Solomon the president "is trying to figure out – whether it's Keystone, whether its climate change legislation – the appropriate balance between our need for energy on the one hand, and our desire to maintain the environment."

"That is the exact same issue that I think Canadians are wrestling with," Jacobson said.