Climate Change Law Update: Recent North American Developments - June 2008
Climate change regulations and responses are changing rapidly
across Canada and North America.
To keep you up to date on this quickly-evolving situation, we
have compiled a brief overview of the most significant recent
developments. This update should be read in conjunction with the
Bennett Jones LLP brochure entitled "Key Federal &
Provincial Actions to Address Greenhouse Gas Emissions".
Ontario/Quebec MOU Re:Provincial and Territorial Greenhouse Gas
Cap and Trade Initiative
On June 2, 2008, the Premiers of Ontario and Quebec signed a
Memorandum of Understanding (the "MOU")
in which they agreed on behalf of their governments to collaborate
on a Provincial and Territorial Greenhouse Gas Cap and Trade
Initiative (the "Initiative").
In the MOU, Ontario and Quebec reject intensity-based greenhouse
gas emission reduction schemes in favour of hard caps in order to
provide "sufficient certainty of real reductions". They
would put in place a regional cap and trade system through
extensive co-operation with other provinces, territories and US and
Mexican states. The signatories promise to work co-operatively with
other jurisdictions on the design and implementation of a
greenhouse gas cap and trade system, to facilitate linkages with
other trading regimes, to provide a collaborative forum for
intergovernmental initiatives and to harmonize greenhouse gas
reporting requirements to avoid redundancy. Other provinces and
territories are explicitly invited to sign on to the MOU.
Although the MOU sets out key elements of the Initiative only in
general terms, the proposals look starkly different from the
climate change plan of Canada's federal government released in
April, 2007 and updated in March, 2008 (the "Federal
Climate Change Plan"). The Initiative's promise
of hard caps on emission volumes and reference to the base year of
1990 (the year used as a base for emissions reductions targets
under the Kyoto Protocol) contrast with the Federal Climate Change
Plan's intensity-based reductions without near or middle term
hard caps and use of a 2006 base year for target setting.
As indicated above, the Initiative places great emphasis on
inter-jurisdictional co-operation and collaboration between
provinces, states and territories and in that respect also differs
from the Federal Climate Change Plan. Indeed several of the
commitments in the MOU relate to intergovernmental ties, work and
harmonization. While the Federal Climate Change Plan states that
the federal government "still intends to work to reach
equivalency agreements with any interested provinces that set
enforceable emission standards that are at least as stringent as
the federal standards," and contemplates links to emissions
trading systems in the U.S. and Mexico, it is not clear that
equivalency agreements are achievable and there is little evidence
of progress to date on U.S. or Mexican links. An equivalency
agreement is contemplated in the Canadian Environmental
Protection Act, 1999 ("CEPA") as
the pre-requisite to an order which makes otherwise relevant
federal regulations not applicable in a province with equivalent
provisions in its laws. The proposed Initiative, if translated into
provincial law, could be 'equivalent' to the Federal
Climate Change Plan regulations as the provincial requirements
likely will exceed the federal targets (although this is not
certain). However, the fundamental differences between hard caps
and intensity-based systems as well as the vehemency with which the
competing views are held and expressed indicate that it will be a
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