This Climate Change Bulletin is part of a series that will be prepared periodically by BLG’s Climate Change Group to alert our clients to emerging issues and initiatives that are relevant to their businesses and strategic interests. Future Climate Change Bulletins and Alerts will review and consider issues facing various provinces as well as different industrial sectors. Comments and questions are always welcome and should be directed to the authors.

Ontario’s GHG Reduction Plans

On Friday July 18, 2008, Ontario Premier Dalton McGuinty announced that the Province is slated to become the newest member of the Western Climate Initiative ("WCI").

As part of the announcement, the Ontario government identified its commitment to phase out coal-fired electricity by 2014, to reduce its GHG emissions targets of 6% below 1990 levels by 2014 and 15% by 2020 and 80% by 2050, its partnership with Québec in developing a cap-and-trade system, its public transit investments and the protection of the Northern Ontario Boreal region (which can absorb 12.5 million tonnes of carbon dioxide each year).

Western Climate Initiative

The WCI was established in February 2007 through the commitment of several U.S. states to reduce GHGs through various market-based programs. The WCI is comprised of various committees that oversee economic research and analysis, develop stakeholder consultation plans and set out targets and GHG reduction program recommendations. This group is a coalition of U.S states and Canadian provinces that develop regional strategies to combat climate change. At the present time, Manitoba, British Columbia and Québec are the Canadian provinces represented. Arizona, California, New Mexico, Utah, Oregon and Washington represent the U.S. states. Government members must have developed greenhouse gas emission ("GHG") reduction strategies to gain entry. These include economy wide GHG reduction goals consistent with the WCI partners, development of a multi-sector climate change action plan, agreement to adopt GHG tail pipe standards for vehicles, and participation in The Climate Registry.

In August 2007, the WCI set GHG emission reduction targets of 15% below 2005 levels by 2020. According to the "Statement of Regional Goal", this reduction target is an economy-wide goal consistent with the emission goals of the WCI partners and does not replace the partners’ existing goals. The Regional Goal is based on:

  • The aggregation of GHG emissions and emissions goals of WCI partners;
  • Currently available state or province emission inventories;
  • Gross emission estimates, across all sectors, for the six GHG reported to the UN Framework Convention on Climate Change by US Environmental Protection Agency’s GHG Inventory and Environment Canada’s National Inventory Report; and
  • Consumption-based (or load-based) emissions estimates for the electricity sector.

In May 2008, the WCI released its draft program recommendations for GHG reductions to achieve the 15% below 2005 levels target by 2020. Those recommendations call for a regional cap-and-trade program in addition to the programs currently underway in member states and provinces. These recommendations are available at http://www.westernclimateinitiative.org.

Next Steps

The draft recommendations on the cap-and-trade program will be the subject of a stakeholder workshop in San Diego on July 29, 20008. Further refinements to various recommendations in the cap-and-trade program will emerge over the course of 2008.