State Space Models

All state space models are written and estimated in the R programming language. The models are available here with instructions and R procedures for manipulating the models here here.

Tuesday, December 20, 2011

Canada Backs Out of Kyoto

On Monday, December 12, as an NPR Marketplace piece documents, Canada pulled out of the Kyoto Protocol blaming the lack of participation of the US and China in the accord. Under the Kyoto Protocol, Canada pledged to reduce its CO2 emissions by 6% compared to 1990 levels. In 2011, Canada decided to move the goal post and seek a 17% reduction from 2005 levels by 2020 (read the history here).
Unfortunately, Canada is nowhere close to meeting either of these goals and appears on a future path of increased emissions as long as I would feel comfortable forecasting into the future (attractor forecast above, dashed red line with 98% prediction intervals).

What's interesting is that Canadian CO2 emissions are being driven predominantly by the North American regional system, that is, by the combined productive power of the US and Canada. What is also interesting is that while US emissions have a chance of stabilizing by 2040 (see my forecast here), Canada's emissions do not.

The Canadian government is basically accurate in the reasons given for pulling out of Kyoto. If US energy demand (and thus CO2 emissions) is ever reduced, Canada will just continue exporting whatever hydrocarbons it can produce to China, India or whomever needs oil. The export orientation of Canada's economy is probably the reason that CO2 emissions are unlikely either to be reduced through international protocols or technological change.