How Industry and Government Strangled Canada's Smog Plan

By David McRobert


Every summer, more than 12 million Canadians are exposed to dangerous air pollutants. One of the worst of these is ground-level ozone, a health threatening substance formed when emissions of nitrogen oxides (NOx) and volatile organic compounds (VOCs) combine in the presence of sunlight.

A major component of urban smog, ground-level ozone pollution in Canada has increased in the past decade, in part because of the continuing urban expansion and increasing automobile use. In 1988, for example, the Ontario ozone standard of 80 parts per billion (ppb) was exceeded nearly 7,000 times - for periods ranging from hours to several days - at various monitoring stations scattered across the province. Recently, the Ontario Ministry of the Environment (MOE) released its 1989 air quality report which suggests that ground-level ozone problems throughout the province are not improving.

Like acid rain, approximately half of our ground-level ozone is imported into Canada from the United States. Massive quantities of NOx and VOCs spew across the Canada-U.S. border every day, and smog problems in cities like Windsor are particularly acute. Fortunately, a large portion of this imported problem will be addressed when amendments to the U.S. Clean Air Act are implemented by the American government. In contrast, current federal-provincial wrangling over jurisdiction on the environment appears to be one factor that is delaying development and implementation of a better approach to controlling ground-level ozone pollution in this country.

Growing evidence suggests that high levels of ozone are especially hazardous to young children and the elderly. Numerous studies, including those prepared for the American Lung Association and the Canadian Government, show that even healthy people experience short-term health effects (such as shortness of breath, chest pain and coughing) when exposed to concentrations of ozone above 80 ppb. These studies also conclude that long-term exposure could lead to chronic lung diseases such as asthma.

Agricultural crops and indigenous plants, including the red spruce and sugar maple, are also being injured. In Ontario alone, for example, damage to cash crops is estimated at being as much as 70 million dollars a year. And it is safe to conclude that many wildlife species are affected by exposure to ozone pollution.
de Cotret
At the end of November 1990, the Canadian Council of Ministers of the Environment (CCME) met in Victoria B.C., to consider whether to approve implementation of the proposed "Management Plan for NOx and VOCs, designed to control ground-level ozone problems in Canada. Support for the plan ought to have been an absolute priority for former federal environment minister, Robert de Cotret, and the provincial environment ministers at the two-day meeting, but by the end of the event, politicians merely agreed to adopt two of 58 measures proposed in the plan. They also agreed that, in the future, the Canadian ozone standard will be 82 ppb. This contrasts sharply with the US ozone standard 120 ppb, a level which many health experts believe is much too high and partially explains why smog problems are so awful in many US cities. A final decision about the fate of the NOx/VOCs plan will be made at a CCME meeting in May of this year (1991), but most environmentalists think the plan has become irrelevant.

Ontario MOE officials say that a new framework for controlling air pollution in Canada is being developed and should be announced before the CCME meeting. Under the framework an umbrella air quality agreement will be negotiated for the whole country to ensure that Canada meets its obligations under the new US Canada air quality accord announced earlier this year. The umbrella agreement will require each province to monitor all air pollution emissions and make an annual report to the federal government. This information will then be compiled into a single federal report; NOx/VOCs information will be a component of it. Bilateral agreements will also be negotiate between individual provinces and territories and the federal government on specific cleanup measures, and it is expected that the agreement will provide provinces with considerable flexibility in the implementation of measures such as those outlined in the proposed NOx/VOCs plan.

This new framework for controlling air pollution has been developed in the absence of public consultation with environmentalists, and questions are being raised about why the NOx/VOCs plan is being abandoned. While the plan had some flaws, it offered a firm basis on which Canada could reduce its smog problems and continue to pressure the US to do the same.

Work on the plan began in the spring of 1989 after the CCME instructed the Federal-Provincial Long Range Transport of Air Pollutants Steering Committee, the committee that conducted research on transboundary migration of acid rain and other air pollutants, to develop a plan in consultation with industry representatives, environmentalists, health experts, and government officials.

The primary goal of the plan, established at one of the first consultation meetings, is the reduction of ozone concentrations in areas where the national standard of 82 ppb is most frequently exceeded, namely the St. John area in New Brunswick, the Windsor-Quebec City Corridor (WQCC), and the Lower Fraser Valley in British Columbia. The first draft of the plan, released in early March 1990, included 61 initiatives, or measures, a number later reduced to 58. The proposed measures ranged from reducing NOx emissions from large stationary sources, such as fossil-fuel burning utilities, and mobile sources, such as cars and trucks, to establishing standards on VOC emissions from solvents and consumer products such as paints, windshield wiper fluid, nail polish, and aerosol sprays.


Downtown St. John, New Brunswick            (Photo by Wilson Studios)


In late March 1990, representatives of environmental groups from across the country convened outside Hull, Quebec, where they discussed the draft plan and prepared a position paper that called for the immediate implementation of most of its provisions.

Industry associations and companies also reviewed the plan and prepared their own position papers and press releases denouncing it. Not surprisingly, many were angry about the cost of the plan, much of which will be borne by industry and consumers of affected products, and about measures that involved bans or phase-outs of certain products. Although government estimates placed the annual cost of the plan at 620 million (1989) dollars by the year 2005, a report prepared for a group of industry associations by the National Economic Research Association, a conservative US consulting firm, claimed that the costs could reach 870 million (1989) dollars a year by 2005. The firm's report also contended that the plan relied too heavily on "command and control," an approach to regulation premised on government identification and enforcement of appropriate standards and technological changes to reduce emissions.

Rather than use command and control, industry associations argued that governments could achieve the desired reductions by employing an "emissions trading system," which gives companies tradable permits to release a certain allocation of polluting gases each year. The allocations can then be traded between polluters, allowing companies to choose between whether they want to alter their pollution control equipment to reduce emissions or buy allocations from other companies which may have already cleaned up. In other words, a large, older company could buy pollution rights from a nearby smaller company with state-of-the-art technology rather than install costly , new pollution control equipment. Accordingly, emissions trading is viewed as more "economically efficient" and is seen by many economists and industry executives as a relatively unknown pollution panacea.

To make their case to governments in Canada, industry representatives began to get organized in the spring of 1990. They hired a small army of lobbyists and consultants to research and write reports for submission to federal and provincial governments and to meet with government policy-makers to persuade them to abandon most of the NOx/VOCs plan and instead integrate future proposed air pollution control measures more fully with the federal government's Green Plan Initiative. When consultations on the Green Plan began in June 1990, these same industry officials made sure their arguments for emissions trading were fully and repeatedly articulated at the meetings and recorded by the Green Plan consultation coordinators. Their arguments were obviously influential because when the Green Plan was released in December 1990, lo and behold, emissions trading was promised as a main feature of future pollution control efforts.

Most of the benefits of emissions trading are greatly exaggerated, but, more importantly, many environmentalists and senior scientists in Environment Canada doubt whether the approach can be applied to ground-level ozone problems. For one thing, we don't have much information about how emissions trading could work because all governments in Canada have very poor air pollution monitoring systems. This would make it difficult to establish whether traded emissions were actually reduced by a seller. Secondly, the scientific information that is available on emissions of NOx and VOCs and on ambient levels of ground-level ozone in Canada supports the use of the "command and control" model relied on in the proposed NOx/VOCs plan. There is some recognition that this could prove to be a problem, and, as a result, the federal government is sponsoring an emissions trading study in the Lower Fraser Valley this spring to examine the issue. Environmentalists, however, worry that data from the study will not be made available to the public, and that the whole thing could prove to be a whitewash.

Even if the data were made available, many environmentalists doubt it could provide a basis for emissions trading in the WQCC because there a very few industrial polluters in the Lower Fraser Valley, and far fewer than the number in the QWCC. There is speculation that the emissions trading test may be an attempt by officials in the BC government to reassure voters they are taking action on air quality problems in the Lower Fraser Valley before a provincial election is called later this year. Ironically, many environmentalists and senior staff who run air quality monitoring programs and sponsor remedial actions in the Greater Vancouver Regional District were unaware of the emissions trading test when contacted in mid-April, more than a month after the test was "announced" by the federal government. No doubt the fact that the announcement consisted of a memo sent to a few hundred civil servants, industry representatives and environmental advocates involved in the NOx/VOCs consultations partly explain this lack of awareness.


Environmentalists failed to recognize what was happening behind the scenes


Another reason environmentalists are concerned about emissions trading is that studies of US emissions trading programs undertaken in the late 1970s showed that some companies inflated their pre-trading emissions levels, told governments what their actual emissions were, and then "banked" the balance against possible future emissions or sold them. This, of course, resulted in more air pollution than was occurring originally.

It would seem, then, that the efforts by industry to promote emissions trading were merely an elaborate ploy to stall the cleaning up of Canada's urban air problems by delaying and undermining the measures proposed in the NOx/VOCs plan. Unfortunately, these efforts seem to have worked; deputy ministers at the CCME meeting in November almost decided to scrap the whole thing the night before their ministers arrived in Victoria. In response, environmentalists mounted a last-minute effort to save the plan, and the ministers decided to keep it alive although they only agreed to approve two of its measures.

There is an important lesson for environmentalists arising from this experience. From right under their noses, industry strangled the NOx/VOCs plan at the last minute and convinced key government officials to abandon almost all of the measures contained in it. How did this happen? One explanation is that public interest advocates failed to recognize what was happening behind the scenes and lost influence over the decision-making process.

While the future of the NOx/VOCs plan and other air quality programs in Canada is, to say the least, hazy, environmentalists should continue to argue that any future reliance on emissions trading to reduce ozone should not undermine the need to ensure that Canadians are able to breathe clean air. Environmentalists must also ensure that the results of the Lower Fraser Valley emissions trading study are carefully assessed and that the study is not used to derail implementation of stringent air quality standards in Canada. And, if an umbrella air quality agreement between the federal government and the provinces and the territories is developed over the next few months, environmentalists must ensure that a draft agreement is reviewed publicly before it is signed, and that all subsequent bilateral agreements implemented under the umbrella agreement are also reviewed publicly with adequate comment periods and financial support for potential public interest group participants. In addition, the data collected by the provincial governments and the annual reports submitted to the federal government by the provinces must be made public so that full disclosure of provincial success or failure in achieving objectives can be assessed. Finally, any flexibility afforded to provincial governments under bilateral agreements must be carefully circumscribed to ensure that adequate measures to reduce emissions of NOx and VOCs are established.

In view of the current air pollution problems in our cities, many of us would probably like to hold our breath until some real action is taken. Alas, few of us will be able to do so long enough, given the glacial pace at which industry and government are moving on our smog problems.

David McRobert, a program coordinator at Pollution Probe,
was involved in the consultations on the NOx/VOCs plan.

From Probe Post, Spring 1991