Behind Canada's Kyoto cop-out

OTTAWA (Reuters) - Canada's widely criticised withdrawal from the Kyoto protocol ends a decade-long saga that began in earnest when former US President George W. Bush walked away from the global climate change treaty in 2001.

The close links between the two economies, and the fact the United States has a population almost 10 times larger than that of Canada, meant that Ottawa ultimately felt it had to follow Washington's lead and ignore the diplomatic fallout.

"That's the reality. If the Americans move we'll move in lock-step with them because of the integrated nature of the economies," said Fen Hampson, director of the Norman Paterson School of International Affairs at Carleton University in Ottawa.

Canada is the largest supplier of oil and gas to the United States and sends 75 per cent of its exports south each month. Even though the right-of-center ruling Conservatives are closer ideologically to the Republicans than the Democrats, they rarely differ with the Americans on major economic issues.

Echoing complaints by Washington, Canada's Conservative government – a firm backer of the energy industry – insists that Kyoto is no use in the battle against global warming because it does not cover major emitters such as China and India.

"There's not going to be traction on climate change until the Chinese and the Americans and the Indians decide that they really want to do something," Hampson told Reuters.

"The (Canadian) government saw this dead cow wasn't moving so they pulled the plug on it," he said.

Canada, which made the announcement immediately after two weeks of talks that extended Kyoto, says it is ready to negotiate a new deal covering all major polluters. Whether other nations are interested in talking to Canada is another matter.

"At the multilateral level, who will ever think we're a trustworthy nation again? ... We will be seen as a country that deals in bad faith," said Elizabeth May, leader of Canada's Green Party, referring to Monday's announcement.

Even so, diplomats questioned whether Canada would suffer immediate fallout from its decision, given existing doubts about the usefulness of Kyoto and a crisis gripping the European Union, the treaty's biggest backer.

Paul Heinbecker, a top diplomat who helped negotiate Canada's accession to the protocol, told Reuters that Canada should have stayed in Kyoto and helped negotiate a new deal.

"How do we now tell other people that they have to live by the next one if we pull out of the first one?" he said.

Yet he too blamed Bush for Kyoto's main challenges.

"In my judgement the person who really torpedoed this whole enterprise was George Bush. Had the Americans participated ... by now there would be enormous pressure on the Chinese and the Indians to be accepting targets," he said.

Bush's move in 2001 caused big problems for Canada's then-Liberal government, which was stuck with the need to curb emissions while facing complaints from industry groups that the proposed cuts would give U.S. competitors an unfair advantage.

In 2002, Canadian Chamber of Commerce and the Canadian Association of Petroleum Producers said ratifying Kyoto would cut gross domestic product by up to 2.5 percent by 2010.

The Liberals, themselves split over Kyoto, produced a widely panned strategy in 2002.

"Part of the plan rested on having new North American standards for cars and with George Bush in the White House that wasn't going to happen," said John Bennett, executive director of the Sierra Club Canada.

The Liberals played for time and did not produce a credible plan until 2005. In early 2006 they lost power to the Conservatives, who made clear they would ignore the Kyoto commitments and eventually decided to pull Canada out.

The Canadian government's current plan, which would cut emissions by 17 percent of 2005 levels by 2020, is almost identical to the strategy of President Barack Obama.

Yet Ottawa's Kyoto move might hamper Obama's push to allow the Environmental Protection Agency to limit greenhouse gas emissions in the United States, according to one critic.

"If this international process is going to take a very long time ... why would we be imposing these Obama regulations on the economy that would devastate it for no gain?" said Matt Dempsey, a spokesman for Senator James Inhofe, the ranking member of the Senate's environment committee and a long-time climate skeptic.

Polls show Obama faces a tough fight to win another four-year term in the White House in a November 2012 election.

(With additional reporting by Timothy Gardner in Washington; Editing by Frank McGurty)