Rising to the Kyoto challenge: is the response of Canadian industry adequate?

A major weapon in Canada's CO2-emissions reduction arsenal is reliance on moral suasion and voluntary action. In this regard, the Voluntary Challenge and Registry (VCR) program constitutes a major effort to encourage industrial firms to reduce their greenhouse gas emissions. In this paper, we begin by providing a critical review of Canadian climate change policy and Canada's international commitments. We then investigate the effectiveness of Canadian policies by analyzing a survey of industrial firms, examining factors that determine firms' familiarity with, participation in and commitment to the VCR program, and their stated potential to reduce emissions by 2008-2012 (Kyoto's commitment period). Results indicate that voluntary programs are unlikely to make a significant contribution to emissions reduction, with industrial firms indicating that, on average, they plan to reduce emissions by some 1-2% below their 1990 level under the current policy approach, much lower than Canada's 6% reduction target.