European Environmentalists say Canada-EU Trade Pact bad for Climate Change     7th February 2011
International Centre for Trade and Sustainable Development
Environmentalists say Canada-EU Trade Pact bad for Climate Change

Environmentalists in Europe lashed out at policymakers last week over aspects of a planned free trade pact with Canada that they say would compromise the EU´s ability to effectively regulate greenhouse gas

The critics say EU-Canada Comprehensive Economic Trade Agreement (CETA) contains an investor-state dispute settlement clause that would allow corporations to sue governments if climate change regulations inhibited their ability to produce fossil fuels.

CETA negotiations are increasingly focussing on the EU fuel quality directive and whether it will discriminate against fuel produced from Canada´s oil sands. Because of the nature of the oil sands, emissions from the refinery process are 23 percent higher than other sources, according to a European Commission report leaked to the European Voice.

Under the directive, oil companies operating in the EU must reduce their emissions to 6 percent below 2009 levels by 2020.  It also creates a division between conventional and unconventional oil sources, with oil sands classified as the latter.  This opens the possibility that Canadian tar sands oil would fall subject to import barriers in the EU.

Alberta´s energy minister, Ron Liepert, travelled to Brussels on the 3rd of this month in an effort to promote the Alberta oil sands as a source of "secure energy" for the EU that shouldn´t fall victim to unfair trade practices.  According to protestors surrounding Liepert´s European visit, he and his interests are using CETA to prevent governments from enacting policies to combat climate change.

Brussels has been considering implementing a policy that would discriminate against oil imports that contain a high carbon footprint, like those from the Canadian province of Alberta. But Canada has argued that the implementation and monitoring of such a system would be difficult and would constitute "unjustifiable discrimination" towards Canadian oil (see Bridges Trade BioRes, 11 October 2011).

But European environmentalists counter that if CETA provisions neglect to establish the EU´s right to ascertain effective measures against climate change, the EU could potentially face legal challenges. Meanwhile Canada says that legitimising trade barriers in the name of environmental protection should be exceptional as they could trigger a chain reaction that would damage global trade.

China recently provoked many importers of rare earth metals when it slashed production and exports on environmental grounds (see Bridges Trade BioRes, 24 January 2011).


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