By Randall Palmer
OTTAWA (Reuters) - Canada's Conservative government said on Thursday it hopes to reach a climate change deal with the U.S. Obama administration, saying an economic crisis is not an ideal time for Canada to be imposing new costs on industry on its own.
"The election of President Obama presents, I think, a great opportunity for us to work together," Environment Minister Jim Prentice told reporters a week ahead of the summit in Ottawa between Obama and Canadian Prime Minister Stephen Harper.
The Conservatives had agreed with the Republican administration of George W. Bush that it was impractical to meet the Kyoto Protocol targets on reducing greenhouse gas emissions, but Prentice now called the new Democratic administration "more open-minded" on the issue.
"The time is indeed right to explore the possibilities that might exist under a more open-minded U.S. administration, with the hope of coming to some kind of agreement on a North American cap-and-trade system," Prentice told the House of Commons environment committee.
A cap-and-trade system would cap industrial emissions of greenhouse gases, blamed by many scientists for global warming, and allow companies to buy and sell permits for emissions.
The Conservatives had at first resisted this concept but promised in their reelection campaign last October to push for a North-American-wide system.
The Canadian government had promised to impose emission limits on industry by regulation, and had set a January 2010 implementation date for mandatory reduction targets from major industrial sectors.
Prentice said he was still working on those regulations, but in his testimony to the committee he hinted at possible delay, at least if Canada were to go it alone.
"As the economy falters and credit grows more difficult to obtain, Canadian firms are struggling to survive," he said in the prepared text of his remarks.
"As a government, we must assess whether this is the right time to add industrial cost burdens with additional regulations."
Elaborating to reporters afterwards, Prentice said he recognized a cap-and-trade system would also impose significant cost on industry.
"But my point is, our economy is so closely integrated as is our environment that we cannot pursue discordant environmental/energy policies in Canada and the United States," he said.
"We need sensible policies that are not going to make it less competitive on one side of the border."
Liberal Member of Parliament Francis Scarpaleggia scratched his head at the sudden Conservative delight with the new Democrat White House, at least on environmental policy.
"I didn't realize all this time that your government had been praying for an Obama victory," he told Prentice.
Another Liberal, David McGuinty, said that if there were a common cap-and-trade system, Canada would have to abandon its approach of seeking reductions in emissions intensity -- lower emissions per unit of production rather than absolute cuts.
Prentice said an intensity-based system was not necessarily incompatible with another system based on hard cuts.
(Editing by Peter Galloway)
