Concerns over global climate change have sparked a series of legislative and policy responses on the provincial, federal, regional, and international levels. The challenge of complying with climate change policy is that different governments have invoked a number of different policy tools to respond and adapt. Of the multitude of policy options available, the most widely adopted tool is greenhouse gas (“GHG”) reporting, which allows governments to track emissions and create an overall inventory for monitoring purposes. Based on this inventory, some jurisdictions, such as British Columbia, have set goals to reduce their emissions in absolute terms by a certain date, while others, such as Alberta, prefer intensity based targets whereby they aim to reduce emissions per unit of GDP or per unit of production. Many jurisdictions also plan to create market-based credit trading systems (cap and trade), whereby less efficient operations can purchase emissions credits from more efficient operators or participate in offset programs to meet their compliance targets. B.C. has created a carbon tax on the combustion of fossil fuels, and some other jurisdictions are considering following suit. Additionally, there are several other policy options to consider, such as fuel and emissions standards, green building codes, and restructuring utilities legislation to encourage the growth of alternate source (non fossil fuel) power producers.
This bulletin provides a brief overview of current legislative and policy initiatives not only in B.C., but also regionally, nationally, and on the international stage. To provide a global context, the bulletin begins with a discussion of international initiatives such as the Kyoto Protocol and the Clean Development Mechanism, as well as developments in Europe. The federal government’s climate change plan is followed by a discussion of the Western Climate Initiative, whose membership is no longer confined to western states and provinces. The bulletin then provides a comprehensive overview of climate change-related legislation in B.C., a jurisdiction pursuing a full range of policy tools as part of its climate change response. Finally, a discussion of legislative initiatives in Alberta is followed by an overview of developments in the Territories as well as Ontario and Québec.
2. International
(a) United Nations Framework Convention on Climate Change, 1992 (“UNFCCC”)
The objective of the UNFCCC is the stabilization of GHG concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system. Canada ratified the UNFCCC in 1994. The UNFCCC does not contain any binding targets itself; rather, it is a framework convention calling for further specification through the development of protocols, such as the Kyoto Protocol.
(b) Kyoto Protocol
Canada has signed and ratified the Kyoto Protocol. The protocol imposes caps on GHG emissions in developed countries. GHGs included under the protocol are CO2, methane, nitrous oxide, hydrofluorocarbons (“HFCs”), perfluorocarbons (“PFCs”), and sulphur hexafluoride. Canada’s commitments under the protocol require it to reduce average annual GHG emissions during the 2008- 2012 period to six percent below 1990 levels. By 2005, each party was required to have made demonstrable progress in achieving its commitments under the protocol, which also requires the establishment of a national reporting system. Canada has established a national reporting system, but has not established regulatory measures to meet the Kyoto target of reducing emissions to six percent below 1990 levels.2 No Canadian government has ever fully complied with the Kyoto Protocol. Noncompliance could mean, amongst other things, exclusion from the Kyoto trading scheme. The Kyoto Protocol also contains several flexibility mechanisms, including the Clean Development Mechanism (“CDM”). The CDM is a program within which entities in developed countries outsource their obligation to cut carbon emissions by sponsoring carbon-cutting schemes in less developed countries. CDM projects are measured against a GHG emissions baseline, which represents the amount of GHGs that would have been emitted without the benefit of the project. Certified emission reductions from CDM projects can be sold and traded amongst developed country parties. (c) Next steps The Kyoto Protocol to the UNFCCC is only a first step in the international effort to address global climate change. The ultimate goal of the UNFCCC is to stabilise atmospheric concentrations of GHGs at a level that prevents interference with the climate system. The Bali conference, held in late 2007, marked the beginning of formal negotiations on a global climate regime for the post-2012 period.
The conference set an end of 2009 deadline for completing the negotiations, which is intended to allow time for governments to ratify and implement the future climate agreement by the end of 2012, when the Kyoto Protocol’s first commitment period ends. The decision at Bali acknowledges the findings of the recent scientific assessment by the Intergovernmental Panel on Climate Change (“IPCC”) and concludes that deep cuts in global emissions of GHGs will be required to prevent global warming from reaching dangerous levels. The IPCC recommends global GHG emission reductions of 50 percent relative to 1990 levels by 2050. The next high level round of formal negotiations will be held in Poznan, Poland in December 2008, with a final agreement for post-2012 climate action to be reached in Copenhagen in 2009.
(d) Europe
As part of its commitment to GHG reductions under the Kyoto Protocol, Europe has had an emissions trading system (“EU ETS”) in place since January 1, 2005. The first phase of the EU ETS ended on December 31, 2007, and was intended as a trial run prior to the Kyoto compliance period 2008-2012. Phase one of the European cap and trade system applied to approximately 12,000 facilities in 25 EU member nations. The success of the system was variable and the price of emissions credits fluctuated, due in part to inconsistencies in the manner in which member nations distributed emissions allowances. While some nations were able to make reductions over the first phase of the EU ETS, overall emissions from facilities within the EU ETS rose slightly over the period.3 Because of this, the EU has set tighter emission caps for the 2008-2012 trading period. Nevertheless, emissions increases in the first phase were well below the EU’s GDP growth over the same period. Europe has also set aggressive long term emissions reduction targets: 20 percent below 1990 levels by 2020, and 50 percent to 80 percent below 1990 levels by 2050. (e) International Carbon Action Partnership (“ICAP”) The ICAP is comprised of countries and regions that have implemented or are considering the implementation of carbon markets through cap and trade systems. ICAP provides a forum to share experiences and knowledge, with a view to helping ICAP members formulate and establish a uniform global cap and trade market. Current ICAP members include, amongst others, B.C., the European Commission, the Western Climate Initiative (see below) and the Regional Greenhouse Gas Initiative.
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