These continue to be busy times for those interested in the
business and policy of carbon in Canada and elsewhere. Below is a
snapshot of some recent developments of note.
NY Climate Week
This week marks the eighth annual climate
week in New York City and government officials,
academics, industry representatives and other interested parties
are meeting to discuss the global transition to a
"low-carbon" economy. In the past, the rhetoric around
climate change has often been muted. However, the recent
ratification of the December, 2015
UN Paris Agreement on climate change matters by both
the U.S. and China has brought climate change and in particular,
the issue of carbon pricing, into the forefront of both government
and industry discourse. The general acceptance of some type of
carbon pricing scheme has transformed the key question from
"will there be a price on carbon?" to "what will the
price on carbon be?" This question of the level or quantum of
carbon price will be a central item in the debates in Canada for
the months and years to come.
Federal National Carbon Price
The Canadian Federal Government has recently announced its intention to impose a
minimum national carbon price on provinces which either fail to
adopt their own pricing initiatives or impose initiatives that are
inadequate to meet Canada's commitment under the Paris
Agreement. Canada is committed to cut greenhouse gas emissions by
30% below 2005 levels by 2030, the same target set by the previous
Conservative government. In spite of calls for a more aggressive
target, a recent report by the Pembina Institute
suggests that in "even with all national and sub-national
climate efforts to date, Canada must bring in new ambitious new
policies and/or significantly increase the stringency of existing
programs" in order to meet its current target. In support of
this premise, several provinces have already implemented their own
carbon pricing regimes, namely a carbon tax in British Columbia and
Alberta and cap-and-trade policies in Quebec and Ontario, However,
many other provinces are firmly against a national regime and
Premiers in both Saskatchewan and Nova Scotia have been outright
vocal against a national price on carbon.
Quebec and California Cap and Trade
Even where a carbon policy is in place, there is no guarantee
that it will be effective. Look no further than the Western Climate
Initiative which links the cap-and-trade schemes in
Quebec and California. The legality of California's
cap-and-trade policy is currently undergoing judicial review. As a
result and for other nuanced reasons, combined cap-and-trade
auction proceeds have returned just a fraction of the expected
revenue necessary for each of the governments of Quebec and
California to fund their carbon reduction policies. This
illustrates the difficulty associated with cross-jurisdictional
carbon regime and may spell trouble for Ontario when it looks to
join the Western Climate Initiative at the beginning of 2018. While
it remains to be seen what unfolds in Canada, California and around
the world, the details surrounding carbon pricing and its ability
to balance economic interests and climate contingencies is still
far from decided and could be one of the biggest policy challenges
of our time.
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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