Report defends Canada government's Kyoto approach

VANCOUVER, British Columbia, Aug 22 (Reuters) A government report on how Canada can meet its Kyoto Protocol targets for reducing greenhouse gas emissions says the targets cannot be met without hurting the economy and driving up energy costs sharply.

The report, released quietly by Environment Canada yesterday, defends the Conservative government's alternative to Kyoto, calling it a ''realistic and balanced'' approach to climate change. The Conservatives say Canada cannot meet the commitments set out under the Kyoto treaty, which was signed by a previous Liberal government.

The report drew fire from an environmental group, which said it falls far short of a new law that requires the government to outline how Canada will meet Kyoto targets of reducing greenhouse gases by 6 per cent from 1990 levels by 2012.

''The document spends more time talking about how we're going to fail than how we're going to succeed,'' said Clare Demerse of the Pembina Institute.

The new law making it mandatory for the government to come up with a plan to implement Kyoto was pushed through Parliament by opposition parties, against the wishes of the minority Conservative government. Prime Minister Stephen Harper threatened to ignore the law, but agreed to obey it after the opposition threatened to sue.

The report echoes the government's complaint that meeting Kyoto targets is unrealistic because Canada has allowed its emissions to grow since signing the treaty, and they are now 27 per cent above 1990 levels.

Canada's gross domestic product projections for 2008 would fall more than 6.5 per cent if the country strictly adhered to its Kyoto targets, with employment levels falling about 1.7 per cent, the report says.

''This would imply a deep recession in 2008, with a one-year net loss of economic activity in the range of C billion relative to 2007 levels,'' it says.

The report also warns that electricity prices would have to increase by 50 per cent and transport fuel prices by 60 per cent.

The Conservatives in April released an alternative plan that proposes to reduce greenhouse gas emissions 20 per cent below 2006 levels by 2020. The proposal was widely panned by green groups.

REUTERS CS BST0040