Following the announcement of the federal government’s legislative climate change plan (as described in an April 30, 2007 Osler Update), a number of provinces have recently implemented or modified their own legislation or policy-based climate change regimes. These regimes are not harmonized with each other or the federal plan, however, which complicates compliance efforts. Furthermore, at this early stage (with only Alberta’s climate change regime in force), there are identifiable conflicts among the various regimes. These various programs must be rationalized and made workable in the 30 months remaining before the proposed federal greenhouse gas reduction regime is implemented.
Alberta’s Climate Change Plan
The Alberta Climate Change and Emissions Management Amendment Act was passed on April 20, 2007. The Specified Gas Emitters Regulation took effect July 1, 2007 and was accompanied by the Administrative Penalty Regulation.
A May 16, 2007 Osler Update describes the draft Regulation and the nascent Alberta climate change regime in detail. The following three significant differences from the draft Regulation are contained in the implemented Regulation:
- The Director now has the discretion to designate an established facility as being new. The Regulation suggests factors which the Director may consider in making such a designation, such as a retro-fit.
- Performance credits can now be (i) “banked” beyond the current calendar year, and (ii) used by the facility that generated them.
- The Director may now issue compliance orders where a regulated facility has failed to meet its emissions intensity targets. Previously, such a facility was subject only to a monetary penalty for non-compliance.
Generally, facilities that emit in excess of 100,000 tonnes of greenhouse gases per year must reduce their emissions intensity (greenhouse gases emitted per unit of economic output, e.g., a barrel of oil) to 12% below the facility’s average emissions intensity from 2003-2005. This reduction must be demonstrated during the July 1–Dec. 31, 2007 period. New facilities must reduce their intensity by 2% per year after their third year of operation. Emissions intensity reductions may be made via operational improvements, the purchase of offsets or contributions into a climate change Technology Fund. Offsets are actions taken where not required by law which quantifiably reduce greenhouse gas emissions. The Technology Fund contribution rate is $15/tonne of greenhouse gas. Where the 12% emissions intensity target is exceeded, performance credits, which may be banked or sold, are obtained. The Administrative Penalty Regulation provides for fines of between $1,000 and $5,000 for each contravention or continuing day of a contravention, depending on the context and severity of the contravention.
The $15/tonne Technology Fund price is consistent with the price for a comparable federal fund contribution, and it is unclear whether the 12% emissions intensity target will move to match the federal target of 18% below 2006 levels, to take effect in 2010, or whether a contribution to the provincial fund will receive consideration by the proposed federal regime.
New Brunswick Climate Change Action Plan
New Brunswick released a new Climate Change Action Plan on June 13, 2007. The Province states that, with the assistance of federal initiatives (the details of which are uncertain), its plan will reduce New Brunswick’s greenhouse gas emissions to 1990 levels by 2012, with a further 10% reduction by 2020. Programs of note include qualifying forest management-based offsets under the federal regime, “improving” nuclear power generation and consideration of each of clean coal and carbon sequestration technologies. These latter two areas have each been identified by the federal government as potential targets for its Technology Fund, once implemented.
Saskatchewan Climate Change Plan
The Saskatchewan Energy and Climate Change Plan was released on June 14, 2007. It aims to reduce emissions by 32% from 2004 levels by 2020 and by 80% from 2004 levels by 2050. It consists of a number of “emissions reduction wedges.” Of note, Saskatchewan proposes a local Technology Fund as well as a local Emissions Offset Fund, aiming to function within proposed federal legislation to ensure that the benefits of compliance measures taken by Saskatchewan organizations under the federal regime (via offset purchases or Technology Fund contributions) remain within Saskatchewan.
Ontario Policy Plan To Support Emissions Reduction Targets
On June 18, 2007 Ontario announced new greenhouse gas emissions reduction targets, relaxing those targets originally introduced in Ontario’s Climate Change Act. The new targets are described as “ambitious but realistic.” A variety of new policy programs, notably including the shut-down of all coal-fired electricity generation, target a 6% reduction of greenhouse gas emissions from 1990 levels by 2014 (instead of 2012), a 15% reduction from 1990 levels (instead of 20%) for 2020 and an 80% reductionfrom1990 levels for 2050. Ontario previously expressed support for a national “cap-and-trade” style emissions reduction regime. To this end, the Province has expressed interest in the “Regional Greenhouse Gas Initiative” currently comprised of 10 U.S. states. However, the most recent Ontario climate change policy announcements have not further developed these initiatives.