The B.C. government recently released the much anticipated Climate Leadership Plan (Plan), which updates the 2008 Climate Action Plan (2008 Plan) and responds to the government-appointed Climate Leadership Team’s (Panel) 32 recommendations for climate action for British Columbia. The Plan attempts to balance the actions required to reduce greenhouse gas emissions (GHG) to reach 2050 targets with the government’s policies aimed at protecting the economy.

Although the Plan outlines more than 20 climate action areas that will be developed, Panel recommendations that are not addressed in the Plan are also noteworthy. This includes: no increase in the carbon tax, no interim 2030 reduction targets, no sectoral reduction targets, and no environmental assessment of the social cost of carbon. However, since the Plan is but a “first step”, those elements may ultimately find their way into an updated Plan as the B.C. government negotiates with the federal government and the other provinces on a national approach to climate action. As one of the “first steps”, the government announced the Clean Infrastructure Royalty Credit Program.

BACKGROUND

British Columbia’s 2008 Climate Action Plan set ambitious legislated GHG emission reduction targets, and introduced an increasing revenue neutral carbon tax and cap-and-trade system to reach those goals. The carbon tax reached C$30/t in 2012, where it has since stayed.

Recently, Canada signed the international Paris Agreement, and the new federal government has promised to unveil an ambitious climate policy this fall. At the provincial level, Ontario and Manitoba announced plans to join Quebec in a cap-and-trade market; Alberta has released an aggressive plan for renewable energy and climate action; and Saskatchewan has announced a renewable energy target of 50 per cent.

In order to update the 2008 Plan, the B.C. government appointed the Panel to provide recommendations to achieve the GHG emissions reductions required to meet legislated targets, while also taking into account economic growth, B.C.’s Liquefied Natural Gas Strategy and B.C.’s Jobs Plan.

The Panel’s November 27, 2015, final report contained 32 recommendations. For further information on the report, see our December 2015 Blakes Bulletin: B.C., Quebec Join Alberta, Ontario in Development of New Provincial Policies on GHG Emissions.

About eight months after the Panel’s report, the B.C. government released its Plan. Although the Plan addressed a number of the Panel’s recommendations, it did not address some of the Panel’s more significant recommendations. The government has promised to update the Plan over the next year in response to work underway between the federal government and the provinces in regard to a national approach to climate action.

CLIMATE LEADERSHIP PLAN

The Plan identifies action items to reduce GHG emissions under the following six areas: natural gas, transportation, forestry and agriculture, industry and utilities, communities and the built environment, and the public sector. Specifically, the Plan includes the following action items:

Natural Gas

The Plan includes:

  1. Launching a strategy, including a new Clean Infrastructure Royalty Credit Program, to reduce upstream methane emissions by 45 per cent through the reduction of fugitive and vented emissions
  2. Developing regulations to enable carbon capture and storage to proceed in B.C.
  3. Investing in infrastructure to power natural gas projects in Northeast B.C. with clean electricity

Transportation

The Plan includes:

  1. Increasing the Low Carbon Fuel Standard from 10 per cent by 2020 to 15 per cent by 2030 to reduce the carbon intensity of transportation fuels, compared to 2010
  2. Increasing the pool of incentives available to encourage commercial fleets to switch to natural gas
  3. Expanding the regulatory framework to support the installation of zero emission vehicles’ charging stations
  4. Expanding the Clean Energy Vehicle Program to encourage the use of zero emissions vehicles through new vehicle incentives and infrastructure, education and economic development initiatives

Forestry and Agriculture

The Plan includes:

  1. A new Forest Carbon initiative to increase tree replanting and to rehabilitate under-productive forests, particularly those impacted by mountain pine beetles and wildfires, as well as to recover more wood fibre and avoid emissions from burning slash
  2. Expanding an existing nutrient management program to develop and demonstrate nutrient management best practices to the B.C. agriculture industry

Industry and Utilities

The Plan Includes:

  1. That 100 per cent of the electricity supply acquired by BC Hydro for the integrated grid must now be from renewable or clean sources, except where there are concerns regarding reliability or costs
  2. Working with BC Hydro on demand-side management programs to help customers be more energy efficient
  3. Regulatory amendments to allow utilities to provide additional incentives to help fuel marine, mining and remote industrial power generation sectors
  4. Regulatory amendments to set energy efficiency requirements for new and replacement gas-fired boilers, as well as enable further incentives to encourage adoption of technologies that reduce emissions from gas-fired equipment

Communities and the Built Environment

The Plan Includes:

  1. Amending energy efficiency regulations to increase efficiency requirements for gas fireplaces, air source heat pumps, and natural gas space and water heating equipment
  2. Implementing a number of policies to encourage the development of Net-Zero Energy buildings, including accelerating and enhancing increased energy requirements in the B.C. Building Code
  3. Working with local governments to update the Climate Action Charter to focus on growth near transit corridors
  4. Creating a strategy to divert organics from landfills, reduce food waste and support materials exchange pilot projects that create innovative uses for waste products

Public Sector

The Plan Includes:

  1. Promoting the use of low carbon and renewable materials, such as Portland-limestone cement and B.C. wood products in public sector buildings
  2. Mandating the creation of 10-year emissions reduction and adaption plans for provincial public sector operations

With these initiatives, the government believes that it can meet the 2050 reduction targets. Of course, until the government passes laws to implement the various action items, the Plan will be only that — a plan, and will have no legal effect.

WHAT IS NOTEWORTHY ABOUT THE PLAN?

While the Plan included a number of the Panel’s recommendations, the Plan did not address some of the Panel’s more significant and controversial recommendations. As such, what is most noteworthy is not what is in the Plan, but what was omitted. However, these elements may ultimately find their way into an updated plan, as the province negotiates with the federal government on a national climate action approach. Some of the more notable omissions from the Plan include:

No New GHG Emission Targets: While reaffirming the target of reducing GHG emissions by at least 80 per cent below 2007 levels by 2050, the Panel recommended that the government set an interim 2030 target, in light of the difficulty of meeting the 2020 target, predictions that emissions will flat-line (rather than decrease) to 2030, and the potential for significant new industrial development. The Panel also recommended sectoral emission reduction targets.

No Increase in Carbon Tax: The carbon tax rate has been at C$30/t (or seven cents per litre of gasoline) since 2012. The Panel recommended an increase in the carbon tax rate by C$10/year commencing 2018 and expanding the scope of the tax to include all emissions (i.e. it would include fugitive and process emissions from natural gas, coal mining and cement and metal production). To offset this, the Panel recommended a reduction in the provincial sales tax and protections for emission-intensive trade-exposed sectors. The government’s response to the Panel’s recommendation is that it is not the time to consider increasing the carbon tax when other provinces and the federal government are implementing carbon pricing policies and “catching up” to B.C.’s lead.

No Environmental Assessment: Social cost and social licence are becoming mainstream phrases that capture communities’ attention and that are taken into account in development decision making. As new industrial projects often have impacts over 30 to 50 years, and in order to align project development with climate action plans, the Panel recommended amending the provincial Environmental Assessment Act to include the social cost of carbon in the environmental assessment process. It is of note that the federal government is currently deciding whether to allow some significant B.C. industrial developments to proceed; and is currently reviewing its federal environmental laws, including the federal environmental assessment laws.

CLEAN INFRASTRUCTURE ROYALTY CREDIT PROGRAM

The Clean Infrastructure Royalty Credit Program (Program), announced as part of the Plan, is now accepting applications from industry. The Program awards royalty credits of up to C$20-million to oil and gas companies who invest in projects aimed at reducing methane emissions from their current operations. Under the Program, companies must fund and complete the entire project before the project is eligible to recover up to 50 per cent of its costs through royalty deductions.