Forest industry is a Kyoto success story

Companies managed to cut emissions by five times more than target

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The Gazette, Friday, September 29, 2006

By his own words, Avrim Lazar leads an industry tossed by "a perfect storm." Canada's $80-billion-a-year forestry industry is facing steep challenges in the key U.S. market that accounts for $35 billion of exports - a drastic decline in demand for newsprint, plunging commodity prices for pulp, the bursting of the bubble in the U.S. housing market, five years of softwood-lumber duties and an appreciation of the Canadian dollar by nearly 30 cents against the greenback in the last five years, cutting deeply into producers' operating margins.

But amid all this bad news, the Canadian forestry industry has achieved a timely and impressive success story on climate change. As a country, Canada has missed its Kyoto target of reducing greenhouse-gas emissions to six per cent below 1990 levels by 2008-2012. Instead, Canada has increased emissions by at least 24 per cent, adding up to a 30 per cent miss.

Just yesterday, in a scathing audit, environment commissioner Johanne Gelinas said she was "more troubled than ever by the federal government's longstanding failure to confront one of of the greatest challenges of our time."

But the Canadian forestry sector as an industry has reduced emissions to 30 per cent below 1990 levels, or five times the Kyoto target. This was while production increased by nearly 30 per cent.

Who knew? In a country carved out of the forest, we are all too familiar with pulp towns and their plants pumping emissions into the sky. The notion of the forestry industry as an environmental leader is somehow counter-intuitive.

As president and CEO of the industry's Forest Products Association of Canada, Lazar has frequent opportunities to present facts that leaves audiences stunned. Part of the emissions story is $8 billion in environmental improvements. And part of it is that nearly 60 per cent of the industry's energy comes from non-fossil fuels, hydro and biomass. The woodchips left on plant floors go back into running them. This isn't just efficiencies, but what Lazar calls "deep re-tooling." This requires major investments. Lazar notes a recovery boiler for biomass production can cost one plant

$125 million.

"As a biosphere dependent industry, it was easy for us to say yes," says Lazar, a former associate deputy minister for policy at Environment Canada. "To the extent we choose green options, that increases our capacity to do business."

In other words, without a healthy forest, there is no healthy forestry industry.

For example, the forests of British Columbia are being devastated by pine-beetle infestation that's spreading east like wildfire. "You can fly over it for hours," Lazar says.

The northern B.C. forest, he explains, requires two weeks of temperatures of minus 40C every winter to control the pine beetle. "And for the last 12 years, it hasn't got that."

Warmer winters. Global warming. Or as Gelinas put it in her audit yesterday: "More drought on the Prairies, melting permafrost in the North, longer and more intense heat waves and smog and rising coastal waters."

While the oil industry in Alberta and Saskatchewan has increased GHG emissions by 50 per cent over Kyoto, another intense emitter, the forestry sector, has met and exceeded the same targets by a factor of five. One of Lazar's members, Catalyst Paper in B.C., has reduced its emissions by two-thirds. Another, Montreal-based Abitibi, has reduced emissions by more than one-third. There are equally impressive success stories in other emissions-intense industries. Montreal-based Alcan has reduced its emissions in Canada by 30 per cent, and by 25 per cent in 60 countries worldwide, while increasing global aluminum production by 25 per cent.

These industries and companies have surpassed Kyoto targets by meeting targets of their own. Along the way, Lazar has detected a cultural change among his members. They now take a certain pride, he says, in a position of leadership on climate change.

"There's the smart versus the stupid," Lazar says, "the problem solvers versus the problem deniers."

As challenged as it might be in terms of markets, the forestry industry has a vested economic interest, as well as what Lazar calls "social contract" obligations on the environment. Equally, the success of one industry in reducing GHG emissions is a reminder that there are no successful outcomes without the participation and leadership of the private sector.

When it comes to climate change, the tree cutters are as one with the tree huggers.

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