NAFTA Fuelling Climate Change in North America

As NAFTA negotiations close in on an agreement in principle, a new tri-national report by leading Canadian, Mexican and American economists has found that NAFTA's existing regulations prevent Canada from reducing almost 1500 megatonnes of greenhouse gas emissions. This would nix any chance Canada has of meeting its Paris Agreement commitments on climate change.

The report, NAFTA 2.0: For People or Polluters?, is published by the Council of Canadians, Sierra Club U.S., and Greenpeace Mexico. It details how the existing NAFTA binds all three countries to fossil fuel futures, and how current negotiations make the problems worse.

"The Trudeau brand is all about progressive sounding, green tinted messages. However, in NAFTA, nothing has been done to address environmentally destructive measures such as energy proportionality or the investor state dispute mechanism," says Canadian author, Dr. Gordon Laxer, political economist and founding director of the Parkland Institute at the University of Alberta. "It is scandalous that NAFTA's proportionality rule locks Canada into perpetual production of climate-polluting tar sands oil and fracked gas. For Canada's transition to a clean energy economy to begin, this polluter-friendly rule must end."

The NAFTA 2.0 report's economic modelling shows that the deal's energy proportionality rules would lock in 1488 megatonnes more greenhouse gas emissions by 2050. This is double Canada's yearly emissions and more than 12 times greater than its 2050 climate pollution target. NAFTA's energy proportionality rules require that Canada make available for export to the U.S. the same percentage of oil and gas as it has in the past three years.

"For decades, the Council of Canadians has been arguing that NAFTA erodes our ability to have sovereignty over our energy resources -- and we have been proven right," says Maude Barlow, Honorary Chairperson of the Council of Canadians. "Now, with the urgency of climate change, our concerns are even more vital today in the context of NAFTA renegotiations."

Ben Beachy, director of Sierra Club's A Living Economy program, says that NAFTA negotiations reflect U.S. President Donald Trump's stance on climate change.

"NAFTA was written to support corporate polluters, not climate-impacted communities. The deal must be fundamentally rewritten to benefit the working families hit hardest by the fossil fuel economy," says Beachy. "Instead, Trump's climate-denying agenda for NAFTA 2.0 would give corporations a new, backdoor way to block climate protections while letting them offshore more jobs and pollution. We cannot shift to a clean energy future if a corporate trade deal tethers us to the fossil fuel past."

Dr. Frank Ackerman, principal economist at Synapse Energy Economics in the United States, adds, "NAFTA 2.0 could expand the damage of Donald Trump's attacks on climate policies by giving fossil fuel corporations increased influence over environmental regulations, or by pressuring Mexico and Canada to mirror Trump's regulatory rollbacks. Even if we are freed from Trump's climate denialism in a few years, such NAFTA 2.0 proposals could prolong Trump's polluting legacy for decades."

In Mexico, provisions such as extending energy proportionality there and locking in the privatization of its national energy company are being discussed in current negotiations. Dr. Alejandro Alvarez Bejar, economics professor at the National Autonomous University of Mexico says these provisions will ensure Mexico is more dependent on oil and gas.

"NAFTA's existing protections for oil and gas corporations are exacerbating Mexico's dependency on fossil fuels, crowding out wind and solar power, and encouraging fracking," says Dr. Bejar. "But proposals for NAFTA 2.0 could make matters even worse by locking in the deregulation of oil and gas in Mexico, creating long-lasting barriers to climate progress.

The report is available at canadians.org/people-or-polluters.