Canada: Sign Of The Times: 177 Nations (And Counting) Ink The Paris Climate Agreement While The World Bank And IMF Push For Carbon Pricing

Paris Agreement Now Open for Signature

Earth Day 2016 – April 22nd – marked the opening of the Paris Agreement for signature at the United Nations (UN) Headquarters in New York. The Paris Agreement, which was adopted by the parties to the United Nations Framework Convention on Climate Change (UNFCCC) on December 12, 2015, will remain open for signature until April 21, 2017.  The signature ceremony was attended by Prime Minister Justin Trudeau along with other heads of state and UN officials.  By signing the Paris Agreement, a party indicates its intention to take steps to express its consent to be bound by the agreement. A separate act of depositing of an instrument of ratification, acceptance, approval or accession with the UN Depositary is required to express a party's consent to be bound.

As of April 27, 2016, 177 countries had signed the Paris Agreement, 15 of which have also deposited instruments of ratification. Canada is expected to ratify the Paris Agreement in 2016 along with Australia, Argentina, Cameroon, China, France, Mali, Mexico, the Philippines and the United States. The Paris Agreement will enter into force on the thirtieth day after the date on which at least 55 parties to the UNFCCC accounting in total for at least an estimated 55% of the total global greenhouse gas emissions have deposited their instruments of ratification, acceptance, approval or accession with the UN Depositary.  While the United States and China issued a joint statement on March 31, 2016 pledging rapid accession to the Paris Agreement, the two nations represent approximately 38% of global emissions. This means that other significant emitters and a number of additional nations will be needed to meet both the emissions and number thresholds that will bring the Paris Agreement into force.  Entry into force could happen as early as 2017 or 2018, but given the varying timelines for countries to complete their domestic approval processes, the timing of entry into force is uncertain at this time. The World Resources Institute has unveiled its Paris Agreement Tracker, an interactive tool which enables users to monitor countries' progress toward ratifying the Paris Agreement.

World Bank and IMF Create Carbon Finance Unit to Facilitate the Development of Carbon Pricing Systems

In a move to bolster the pace of development of carbon pricing systems around the world, the World Bank and International Monetary Fund (IMF) has created a Carbon Finance Unit that will provide financial and technical assistance to countries that are creating carbon pricing systems. The World Bank and IMF have identified climate change as a key driver of global poverty and the campaign for carbon pricing by two of the world's biggest lenders began as world leaders gathered in New York to sign the Paris Agreement. Leveraging their economic and technical expertise, the World Bank and IMF will work together with developing countries to help them create carbon pricing systems. To date, the World Bank has given an $8 million dollar grant to China, which is developing what is expected to be the world's largest cap-and-trade program. South Africa and Chile have also received similar grants from the World Bank. The IMF is advising countries on how best to introduce carbon pricing as a means to generate revenue while simultaneously reducing their GHG emissions.

In its report, State and Trends in Carbon Pricing 2015, the World Bank and Ecofys estimate that almost 40 countries and more than 20 cities, states and provinces currently use carbon pricing mechanisms or are planning to implement them. These jurisdictions are responsible for more than 22% of global emissions. Others are developing or considering systems that will put a price on carbon in the future. Altogether, these actions will encompass almost half of global CO₂ emissions.

On April 21, 2016, the World Bank, IMF, Organization for Economic Cooperation and Development and the heads of state of Canada, Chile, Ethiopia, France, Germany and Mexico released a statement calling for more carbon pricing.  The goal is to reach enough countries to cover 25% of the world's GHG emissions by 2020 and 50% of emissions by 2030.

In recent climate change policy developments in Canada, the country's First Ministers issued a joint communiqué on March 3, 2016 following the First Ministers' Meeting in Vancouver and released the Vancouver Declaration on Clean Growth and Climate Change. At the meeting, Prime Minister Trudeau and the Premiers launched a process to develop national climate change plan which includes the establishment of working groups to study: (i) clean technology, innovation and jobs, (ii) carbon pricing mechanisms, (iii) mitigation opportunities, and (iv) adaptation and climate resilience. The working groups are expected to report back by October, following which a national climate change plan will be negotiated.

Ontario to Establish an "Ultra Low Carbon Utility"

In related climate change news, it has been reported that under its proposed Climate Change Action Plan, Ontario will establish a new agency – referred to as the "ultra low carbon utility" – which will have a mandate to transform how Ontarians use energy in order to reduce GHG emissions. The Climate Change Action Plan, which is part of Ontario's broader Climate Change Strategy, is expected to be released in May.

As reported, the Climate Change Action Plan will set out various emission reduction initiatives that will complement the province's planned cap-and-trade system, including initiatives to make the majority of the province's buildings emissions free, put at least 1.7 million electric and hybrid vehicles in use by 2024, and have 80% of residents use public transit, walk or cycle to work by 2050. In addition, the Climate Change Action Plan will seek to reduce emissions from buildings by 15% by 2030 with a view to ensuring that most buildings will be emissions free by 2050.  This would be achieved by providing support to businesses and consumers to install solar panels or geothermal systems and to undertake retrofits, as well as by changing the building code to establish energy efficiency standards for renovations and new construction. Also, the Climate Change Action Plan would provide funding to industry to switch to cleaner facilities and for research into low-carbon technologies. Further, the Ontario government plans to acquire offsets to make its operations carbon neutral in 2017, and the 2030, the government will aim to cut its own emissions by 50% by 2030.

The Ontario Ministry of Environment has indicated that the Climate Change Action Plan is still in draft form and that stakeholder consultations are continuing. The Climate Change Action Plan sets out the province's broad policy initiatives, meaning that details on the amount of low-carbon electricity generation and how the new agency will fit within the current electricity distribution, transmission and generation system will still need to be worked out.

To view the original article, please click here.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.