VEHICLE GREENHOUSE GAS EMISSIONS:

UNCLAS OTTAWA 001020

SIPDIS

STATE FOR OES, OES/EGC, EB/ESC/ISC, WHA/CAN

USDOC FOR ITA/MAC -- OFFICE OF NAFTA

DOE FOR INT'L AND POLICY, IE-141 (DEUTSCH) AND BPA (ATKINS)

EPA FOR OFFICE OF THE ADMINISTRATOR, INTERNATIONAL AFFAIRS
AND BRIAN MCLEAN

E.O. 12958: N/A
TAGS: SENV ENRG CA
SUBJECT: VEHICLE GREENHOUSE GAS EMISSIONS:
CANADA UNVEILS VOLUNTARY DEAL WITH AUTO MAKERS

REF: OTTAWA 824


1. AS ANTICIPATED (REFTEL),ON APRIL 5 THE GOC AND
REPRESENTATIVES OF NINETEEN AUTOMOTIVE COMPANIES ANNOUNCED A
MEMORANDUM OF UNDERSTANDING (MOU) UNDER WHICH THE COMPANIES
PLEDGE TO REDUCE GREENHOUSE GAS EMISSIONS FROM NEW CARS.
THE TARGET IS TO CUT EMISSIONS FROM THE CANADIAN VEHICLE
FLEET BY 5.3 MEGATONNES BY 2010, OR ROUGHLY A 25 PERCENT CUT
FROM THE "BUSINESS-AS-USUAL" SCENARIO.



2. THE MOU AND RELATED DOCUMENTS ARE AVAILABLE ON THE
NATURAL RESOURCES CANADA WEBSITE AT NRCAN-RNCAN.GC.CA.
ANNEX 3 PROVIDES A LONG LIST OF POTENTIAL TECHNOLOGY
IMPROVEMENTS WHICH COULD CONTRIBUTE TO THE REDUCTIONS,
INCLUDING: TRANSMISSION IMPROVEMENTS (INCLUDING MORE AND
HIGHER GEARS),ENGINE FEATURES (DEACTIVATION OF SOME
CYLINDERS UNDER CERTAIN OPERATING CONDITIONS),MANY VALVE
CONTROL FEATURES, REDUCED INTERNAL FRICTION, LIGHTER VEHICLE
WEIGHT, BETTER AERODYNAMICS, MORE HYBRID AND PERHAPS
HYDROGEN TECHNOLOGIES, AND OTHER ALTERNATIVE FUELS.


3. REFTEL PLACES THIS AGREEMENT IN THE CONTEXT OF CANADIAN
CLIMATE CHANGE POLICY. THE 5.3 MEGATONNE CUT IS WELL UNDER
ONE PERCENT OF CANADA'S TOTAL EMISSIONS, AND A FRACTION OF
WHAT THE GOC HOPES TO NEGOTIATE FROM LARGE FINAL EMITTERS
(LFE'S - MAINLY IN THE ENERGY, MINING, METALS AND FOREST
PRODUCTS INDUSTRIES). FOR AUTOMAKERS, THE ALTERNATIVE TO
THIS "VOLUNTARY" DEAL WAS MANDATORY EMISSIONS LIMITS IMPOSED
BY GOVERNMENT REGULATION. MEDIA REPORTS IN BOTH THE UNITED
STATES AND CANADA HAVE NOTED THAT THIS WOULD BE SIMILAR TO
THE APPROACH PROPOSED BY THE STATE OF CALIFORNIA (THOUGH
AUTOMAKERS HAVE RAISED A LEGAL CHALLENGE TO THE STATE'S
JURISDICTIONAL AUTHORITY TO REGULATE EMISSIONS). HAVING
AGREED TO REDUCE GREENHOUSE GAS EMISSIONS FROM THEIR
CANADIAN VEHICLES REDUCES THE INDUSTRY'S ABILITY TO RESIST
DOING THE SAME IN U.S. MARKETS - AS SOME U.S.
ENVIRONMENTALISTS HAVE ALREADY POINTED OUT.


4. ACCORDING TO THE MOU, A JOINT INDUSTRY-GOVERNMENT
MONITORING COMMITTEE WILL REPORT ANNUALLY ON PROGRESS TOWARD
THE TARGETED REDUCTIONS. THE 5.3 MEGATONNE REDUCTION TARGET
IS BASED ON A "BUSINESS-AS-USUAL" ESTIMATE FOR 2010
EMISSIONS, WHICH WAS ORIGINALLY DETERMINED IN 1999. ANNEX 2
OF THE MOU ALLOWS FOR THIS "REFERENCE CASE" TO BE ADJUSTED
BASED ON "FACTORS OUTSIDE THE INDUSTRY'S CONTROL." IT BEARS
NOTING THAT THIS ENSURES THE GOC CAN AVOID THE POTENTIAL
EMBARRASSMENT OF SEEING THE INDUSTRY MISS ITS TARGET.

DICKSON