Tuesday, May 23, 2006

Harper and Kyoto: emissions trading in Canada?

In my May 19 post I harped on about the Emission Trading Scheme (ETS) in Europe. What does that have to do with Canada? The ETS covers companies roughly similar to what we in Canada call the Large Final Emitters (LFEs). With much prodding from activist Environment ministers in the former Liberal government, federal bureaucrats flirted with the idea of fining LFEs for excessive carbon emissions, instead of the ETS approach of making them trade carbon permits. They even put this into legislation (by adding CO2 and other GHGs to the CEPA in November 2005).

Stephen Harper’s Conservatives aren’t showing much interest in this approach. They want a made-in-Canada solution to the Kyoto impasse. At the same time, they’ve made favourable comments about the Asia-Pacific Partnership for Clean Development and Climate, a U.S.-led pact that includes most Pacific-rim countries that didn’t sign Kyoto (I know—so much for made-in-Canada). Recent comments by a senior non-elected NRCan official indicate that the federal bureaucratic aircraft carrier is heaving back into NRCan waters—i.e., away from Environment Canada, and away from regulating LFEs.

It is difficult to say how things will develop. The Conservatives have little interest in launching emissions trading in Canada. But they’re feeling the climate-change heat, especially after the Bonn conference last week. They have a precarious minority in Parliament, and probably won’t try to take CO2 back out of the CEPA. The Bloc or NDP might try to force the issue during upcoming ENVI (standing committee on Environment and Sustainable Development) hearings. If their members team up with the four Liberals on the committee, one of whom (Scott Brison) is trying to become leader, they could make this sessions’ ENVI hearings very interesting.

And we can’t ignore developments south of the border. Some high-profile U.S. lawmakers, like John McCain, are still interested in starting an emission-trading scheme. The Northeastern RGGI state-level initiative may look stillborn, but even if it dies something similar will re-emerge, like Obi-wan Kenobi, in a stronger form. Climate change is a growing issue. It is forcing its way up the agenda, and more American politicians are looking at it. They might try to put teeth into the Asia-Pacific Partnership.

Stay tuned, Canadian LFE.

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