Canada: Recent Developments On Climate Change - November, 2009

Recent Developments


Court rejects appeal of climate change lawsuit

On October 28, 2009, the Federal Court of Appeal rejected the appeal of Friends of the Earth (FOTE), an environmental non-profit organization, which alleged that the federal government had not fulfilled its obligations under the Kyoto Protocol Implementation Act (KPIA). The KPIA requires, among other things, that the federal Minister of the Environment prepare an annual Climate Change Plan that ensures that Canada meets its obligations under the Kyoto Protocol. The Federal Court Trial Division had found that the KPIA creates a system of public and parliamentary accountability, which is not open to substantive judicial review. According to the Trial Division, the case raised "inherently political" issues that should be resolved in a political forum rather than in the courts. In its recent decision, the Court of Appeal adopted the reasons of the Federal Court Trial Division. For background on the case, please see Torys' November 2008 Climate Change Bulletin. For further information on the appeal, please see the Court of Appeal decision.

Carbon Disclosure Project releases new Canadian report

The Carbon Disclosure Project (CDP) released its 2009 Canadian report on October 8, 2009. Acting on behalf of 475 institutional investors that hold $55 trillion in assets under management, the CDP has, in recent years, surveyed the 200 most valuable companies by market capitalization listed on the Toronto Stock Exchange, encouraging them to disclose information on how climate change risks and opportunities are affecting their business, if and how they are monitoring their greenhouse gas (GHG) emissions, and what climate change management strategies they have in place. For this year's Canadian report, 97 companies (49% of those surveyed) responded. Most respondents identified a combination of both risks and opportunities arising from climate change. They frequently identified opportunities such as participating in allowance and offset trading and providing alternative products and services to replace those affected by climate change–related regulations. Commonly identified risks included the prospect of increased regulation of emissions-intensive activities and increased exposure to severe weather events. For further information, please see the Carbon Disclosure Project.


Ministry of the Environment proposes GHG reporting requirements

On October 7, 2009 the Ministry of the Environment (MOE) posted its draft Greenhouse Gas Emissions Reporting regulation. This regulation would impose mandatory emissions reporting for all regulated sources that are emitting 25,000 tonnes of carbon dioxide equivalent or more per year. Reporting for 2010 would occur in 2011 and continue annually thereafter. The MOE would accept a number of different quantification methods for the reporting of 2010 emissions with standardized quantification methods to be imposed beginning in 2012. In addition, third-party verification of emissions would begin in 2012 and continue annually thereafter. Parties that emit between 10,000 and 25,000 tonnes per year would not be required to report emission under the regulations. However, the MOE plans to develop a program to encourage voluntary reporting for smaller entities.

For further information please see Greenhouse Gas Emissions Reporting Regulation and Guideline.

United States

Circuit court allows climate change nuisance claim

On October 16, 2009, the U.S. Fifth Circuit Court of Appeals held that certain residents and owners of property along the Mississippi Gulf coast had standing to assert public and private nuisance, trespass, and negligence claims against several energy, oil and chemical companies for their GHG emissions. The Fifth Circuit Court also ruled that none of those claims presented non-justiciable political questions. In doing so, the Fifth Circuit Court reversed the trial court's dismissal of the action on those grounds. This decision bolsters a recent Second Circuit decision, described in Torys' Special Edition Bulletin, that ruled that U.S. federal courts can decide common law actions that allege private emitters of GHGs are liable for creating a public nuisance. However, just prior to the Fifth Circuit's decision in the Mississippi Gulf coast case, the United States District Court of the Northern District of California dismissed an action by the Eskimo Village of Kivalina against 24 oil and energy companies seeking $95 million to $400 million in damages for flooding and relocation impacts associated with climate change. It remains to be seen whether this decision will be reversed on appeal in light of the Second Circuit and Fifth Circuit decisions. For further information, please see the Fifth Circuit's Decision and the Northern District of California Court's decision.

U.S. issues final GHG reporting rule

On October 30, 2009, the U.S. Environmental Protection Agency (EPA) published its Final Rule on the Mandatory Reporting of Greenhouse Gases. The rule requires certain facilities to begin collecting data on their GHG emissions on January 1, 2010 and to report on their 2010 emissions by March 31, 2011. Facilities subject to the reporting requirements include (i) facilities in a listed industry – such as petrochemical production, glass production, and pulp and paper manufacturing; or (ii) facilities in which the aggregate maximum rated heat input capacity of the stationary fuel combustion units at the facility is 30 mmBtu/hr or greater and the facility emits 25,000 tonnes or more of GHGs per year. The final rule would not require reporting based on indirect emissions from electricity consumption. As reported in our August 2009 Bulletin, Environment Canada already has similar reporting requirements in place, requiring any person who operates a facility that emits 50,000 tonnes or more of CO2e in the 2009 calendar year to submit information about those emissions to the federal government no later than June 1, 2010. For further information, please see the EPA's Reporting Rule.

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.

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