Zizzo Allan featured in CBA National Magazine
September 22, 2010
Jordan Furlong, consultant and award-winning author of law blog Law21 featured Laura Zizzo and Zizzo Allan Climate Law LLP in “Leading the Way” for the Canadian Bar Association’s National magazine’s September issue. Mr. Furlong cites Zizzo Allan as an example of a new class of “Highly innovative start-up law firms (that) are taking on new markets, leveraging technology and dreaming up new ways of doing business.” You can download a pdf of the article or see the entire magazine.
Mr. Furlong writes “Zizzo thinks cross-disciplinary collaboration will be key to successful law practices in the future. ‘That’s the way business thinks,’ she says. ‘They don’t compartmentalize as much as we might think they do as lawyers. They want to see how all the pieces fit together [into] a package that considers all these other issues.’
Laura’s view from the World Energy Congress 2010 in Montreal
September 20, 2010
I am pleased to be writing this from Montreal for the 2010 World Energy Congress, which I will be attending as a participate of the Future Energy Leaders Program. I look forward to engaging with energy-industry participants from around the world over the next 6 days. It’s clear that we are going to discuss many important topics including energy demand and supply, environmental and economic imperatives and the move to a low-carbon economy. I intend to provide climate and legal insights and thoughts and look forward to learning and sharing with the fine group assembled here.
Throughout the congress I will be blogging about the happenings here and sharing some of what is discussed with our readers.
Pre-Conference – Sunday September 12, 2010.
After a train ride from Toronto, checking into my hotel and registering for the Congress yesterday I am ready to rock Sunday morning. Day one starts off a bit unexpectedly as I am not able to get onto the bus I though I had registered for to tour an electricity generating station. It’s never really a problem to have a free morning and afternoon in Montreal though, so I made the most of it – seeing the city and meeting up with a friend and colleague for lunch. As I type this there is a protest in front of my hotel, I’m not exactly sure what the message is, but there is lots of horns and whistles in front of Hydro-Quebec’s office on Rene-Levesque. I also passed by a group of dedicated environmental activists earlier today. It appears we will hear a diversity of views while in Montreal this week – which I think is great!
In a few minutes I will be attending the opening ceremonies for the Congress followed by a meet and greet in the exhibition hall. This is a “casual” and “fun” evening to be followed by 4 days of intense discussions.
The air is electric (pardon the pun) with the promise of almost 5000 delegates from around the world coming together to discuss some of our most pressing challenges. I have been focusing the last decade or so on environmental issues and realize (obviously) that energy is a major part of the climate change challenge. I understand that regional distribution and facilitating renewable energy is crucial. I also know we have to get off fossil fuels very quickly. How we can do this effectively, efficiently and fairly is not yet clear. I look forward to learning more about our energy challenges over the next few days. Hopefully by engaging with tough questions and keeping an interdisciplinary approach we will be able to move towards some solutions this week.
Opening Ceremonies Set the Tone for the Week
Sunday evening we experienced a impressive opening ceremonies that set the tone for a full week of education, marketing, and discussions. The presentation set out the themes of the conference Responding Now to Global Challenges: Energy in transition for a LIVING PLANET. Each day will be based on one of the following four themes: Accessibility, Availability, Acceptability and Accountability.
Opening speakers recognized that all energy discussions need to respect development and climate change imperatives and underscored the importance of seeking out innovative solutions. The evenings keynote speaker is Astronaut Steve McLean, the President of the Canadian Space Agency who challenged us to look at these challenges systematically and ensure clear communication between areas of expertise.
After the speeches concluded we were treated to Quebec’s circus-arts entertainment; perhaps a foreshadowing of the balance and contortions that are necessary to respond to these complex energy challenges.
Day 1 – September 13, 2010 – Accessibility
Themes of global energy poverty and inequality were emphasized. Participants mentioned that over 1.6B people live without access to electricity.
This was also the day that the Future Energy Leaders Program really got started. I’m thrilled to get the chance to meet over 150 young leaders from over 80 countries to discuss these global challenges and attempt to create a sustainable future.
More details to follow…
Day 2 – September 14, 2010 – Availability
Our day started out with a panel that included the Minister of Natural Resources and Wildlife of Quebec, Nathalie Normandeau along with the CEO of Hydro Quebec, Thierry Vandal and an executive from ABB (Switzerland). They came to speak to us Future Energy Leaders about their career paths and visions for the future.
Minister Normandeau spoke about Quebec’s natural blessings and a renewable energy (hydro) leader and showed a beautiful video of Quebec’s natural wonders. I found Mr. Vandal’s talk most compelling as he shot straight saying the main challenge with renewable energy is the grid – transmission must be built in a way that wind doesn’t “cannibalize” hydro. He said that energy efficiency must be the first priority and in responding to questions recognized that relations with First Nations are crucial and have been changing. Of interest to me, he described the way that Hydro Quebec now deals with Aboriginal relations as follows. (I’m paraphrasing) We will do projects to the extent that you want them – if we can’t do them here, we’ll do them elsewhere. He also recognized the importance of incorporating traditional knowledge in decision-making and study of ecosystem factors.
Later in the Plenary we heard from Fatih Birol from the International Energy Agency. He spoke of unprecedented uncertainty and the “gas glut” that are making future energy markets extremely difficult to predict. He recognized climate change as a long term uncertainty and lamented the lack of a binding international treaty. He suggested that pledges being made by countries through the recent Copenhagen Accord are often more modest than Business as Usual and there is no guarantee that targets will be reached as many are voluntary in nature. Mr. Birol told us that the growth in developing countries coupled with national subsidies distort prices. He pointed to certain developing countries (China in particular) that have seen unprecedented growth in energy consumption but still is only 1/3 the average OECD consumption per capita. He told us of a planed coal mine in China that, if developed, would make China an exporter of coal and would have a significant impact on coal prices.
Mr. Birol ended with an appeal for better public policy. He reiterated that market instruments are the best way to address these complex issues but that Climate Change is so urgent and complex that there may be a greater role for non-market based public policy. Like many of the speakers we have heard from this week. Mr. Birol emphasized the need for strong and stable government policies to send clear signals and promote new technologies.
Later in the day we heard from an executive from Peabody (coal company) who emphasized the need for global poverty reduction and suggested that coal could help us do that. I personally found his speech a bit contradictory but it was very interesting to hear his perspective.
My favourite panel of the day was the afternoon FELP panel with Lester Brown of the Earth Policy Institute being my favourite speaker. It’s too late now for me to give this panel and the subsequent events of the day justice so I will sign off and finish up later. To summarize – we need to start running towards “Plan B”.
Day 3 – September 15 – Acceptability
The day dedicated to acceptability started off with Lester Brown as the “champion” of the day with a morning message focused on the urgency associated with preventing a greater than 2 degrees C rise in global temperature. He discussed how future immigration and food shocks are inevitable and we now must turn our complete attention to reducing GHGs and adapting to the climate change that is inevitable.
Mr. Brown’s talk was warmly received by the audience and was referred to in the morning’s roundtable, chaired by Canadian Environment Minister, Jim Prentice. The Roundtable included the following panelists:
- Yvo de Boer, former Executive Secretary of the UNFCCC and now member of KPMG
- Pierre Duhaime, SNC Lavilin, Canada
- Younghoon David Kim, Chairman and CEO of Daesung Group, S. Korea and
- Jose Antonio Muniz Copes, President of Electrobras, a Brazilian Power Utility
I was inspired by Mr. de Boer’s comments, building on Mr. Brown’s plea to move towards “Plan B” and exploring ways we can get there. He suggested the need for increased investments in energy solutions and global agreements. Responding to questions, Mr. de Boer recognized that there is a need to put the debates about targets to the side and focus on actions/market mechanisms. Tangible things, like global reporting matrix and reporting guidelines are essential in his opinion, including international methodologies for Monitoring Reporting and Verification. He passionately suggested we need to work towards implementation of any positive steps NOW.
I found it most interesting that Mr. de Boer suggested the need to move away from comprehensive and consensus based multilateralism, suggesting that a workable way forward on the international scene would include small groups of representing leaders dealing with various issues. In short, he said not ever country needs to be at the table for ever discussion. He suggested there was “no one size fits all” concept that countries can come to with respect to national appropriate mitigation actions. We must link national actions with an international infrastructure (the UNFCCC) that provides support in the form of information, technology and access to international markets.
Key points from Yvo de Boer:
- Need smaller groups of states to negotiate key issues
- Allow diversity in Nationally Appropriate Mitigation Actions (NAMAs)
- Provide international structure of tools/rules to facilitate state actions
- Need policy certainty from national governments to reach agreed goals
The other panel members discussed the challenges to make investment decisions without government guidance and regulatory certainty. Minister Prentice seemed to acknowledge this as a concern, while saying that Canada wants to ensure its policies align with the U.S. (reiterating the commonly heard government stance that Canada will not move on many of these issues without U.S. movement).
WCI Stakeholder Conference
I took some time out form the WEC Wednesday afternoon to hear form the Western Climate Initiative (WCI) Partners. More on this in a future post.
Day 4 – September 16 – Accountability
The Future Energy Leaders had a working breakfast with Ministers dealing with energy issues from Iceland, Canada and Cameroon. The discussions were very interesting and showed the need to share information between jurisdictions and learn best practices. The issues of environmental assessments and technology transfer also featured in the discussions.
We were then treated to a roundtable on business and trade issues where the WTO head had great insights. Suggesting that trade concerns should not be an excuse for delay in reaching global climate deal.
The conference concluded with a Canadian ministerial roundtable and an international ministerial roundtable – signifying the need for government leadership on these important issues. The path forward will not be easy, but we must be accountable for our decisions and work towards solutions that will sustain temperatures and improve global quality of life.
Director General of WTO Urges: Environment First, Trade Second
September 16, 2010
Today at the World Energy Congress I was struck by the clear statements from Pascal Lamy, the Director-General of the World Trade Organization.
He emphasized that an international agreement on climate change should be our number one priority. He said we must attempt to get the disciplines right on the environmental issues and subsequently can deal with any trade problems on a case-by-case basis. In short, the head of the WTO recognizes trade concerns cannot be an excuse for stalling action on climate change. Big.
Mr. Lamy stressed the importance of international climate negotiations like those that are going to take place in Cancun this November-December and stated the need for global market mechanisms to address climate change through carbon pricing. He said that any tensions between decisions and trade openness can be addressed subsequent to the world coming to agreement on the basic commitments.
He emphasized that the WTO is up for the challenge and that it will be able to adapt to new international standards for climate change. He also suggested that carbon pricing does not have to be a precursor to border tarrifs, noting that some jurisdictions have carbon taxes without border adjustments (which may be seen as trade barriers).
Newsflash: Government of Canada Announces Biofuels Investment
September 14, 2010
Today at the World Energy Congress in Montreal, the Government of Canada announced it will invest $18.79 million over seven years to Biocardel Quebec Inc through its ecoENERGY for Biofuels program.
Minister Paradis delivered the announcement to support the biodiesel producers that convert vegetable or cooking oil or animal fat into biodiesel.
More information can be found via the NRCan press release.
WCI Proposes Canadian Harmonization with US EPA Reporting Rules
September 10, 2010
On September 8, 2010 the Western Climate Initiative (WCI) released the Harmonization of Essential Requirements for Mandatory Reporting in Canadian Jurisdictions with the WCI Essential Requirements for Mandatory Reporting and the EPA Greenhouse Gas Reporting Program (author’s note: yes, that’s the actual title – we’ll refer to it as the “Harmonization document”).
WCI Partners (Green) and Observers (Blue)
The WCI is a group of 4 Canadian provinces and 7 U.S. states that are working together as partners to reduce greenhouse gases. Its major initiative is the implementation of a regional cap-and-trade system in Partner jurisdictions. An initial step towards the implementation of a cap-and-trade system is the requirement for Greenhouse Gas (GHG) emitters in Partner jurisdictions to report emissions using the same basic rules and methodologies (referred to as Essential Requirements for Mandatory Reporting). This will allow for appropriate baselines to be drawn and allocations of credits to be made.
The Partners understand that to have a functioning cap-and-trade system harmonization of GHG reporting requirements and quantification methods is essential. This will help ensure that a “tonne” of carbon (and carbon credits) are equivalent across the Partner jurisdictions. Over the last few years the WCI has been working to publish Essential Requirements for Mandatory Reporting (known as ERs) and in July of 2009 released the Final Essential Requirements for Mandatory Reporting to be implemented in the WCI jurisdictions. Then, in September of 2009 the U.S. Environmental Protection Agency (EPA) adopted its Mandatory GHG Reporting Rule (the EPA rule). Since U.S. facilities will be subject to the EPA rule, the WCI is attempting to harmonize its ERs with the EPA rules. As such, this change will largely affect Canadian facilities, since U.S. facilities must already comply with the EPA rule.
“The harmonized ERs will be in the same format as the EPA rule, and include some recommended changes to ensure a level of accuracy in reported emissions sufficient for a cap-and-trade program.”
The document identifies that it is not crucial that Canadian jurisdictions fully comply with the EPA reporting rule; therefore there can be some regionally specific differences. Not mentioned by this document is the potential trade benefit that harmonization with U.S. Federal policy could bring. Some U.S. legislative proposals to address climate change would put border adjustment tariffs on imports from jurisdictions without equivalent environmental regulation – meaning Canadian Partner jurisdictions who are in compliance with the EPA’s guidelines may also be taking the firsts steps towards preventing the imposition of additional border tariffs on goods imported to the U.S in the future.
A notable difference between U.S. and Canadian approaches relates to verification (i.e. auditing) of data. Canadian jurisdictions will be required to have their GHG reports audited by accredited third-party verifiers whereas U.S. facilities will be required to have their reports verified internally by the EPA. In the U.S. there is a greater need for detailed data to be submitted straight to the regulator, whereas the onus in Canada will be on the verifiers to ensure all data is accounted for. This situation may account for many of the remaining differences between quantification in Canadian and U.S. Partner jurisdictions.
The Harmonization document presents ERs that are intended to be methodically consistent with the WCI harmonized ERs and the EPA rule but are appropriate for use in Canadian jurisdictions. The document outlines the following Harmonization principles (at page 2-3).
- A Canadian facility should apply the same functions, equations, sampling protocols and measurement criteria as U.S. facilities subject to the U.S. version of the harmonized ERs.
- The quantification methods included in the harmonized ERs must remain sufficiently reliable and accurate to be employed in a greenhouse gas (GHG) cap-and-trade program.
- The WCI reporting system must remain suitable for use in Canadian jurisdictions. For example, it must allow reporting in metric as well as English units and must where necessary include Canada-specific emission factors.
- The harmonized ERs should facilitate harmonization with Canadian federal reporting. Some Canadian jurisdictions are working with Environment Canada to develop a one window reporting tool for provincial and national GHG reporting requirements.
The Zizzo Allan Climate Law team would be happy to assist interested parties in understanding these proposed requirements and implications for your organization. Please contact us for more information.
Stakeholder comments are now being solicited about the Harmonization rules and are due October 12, 2010. More information about consultation can be found on the WCI website.
The Legal Climate Blog: Cap and Trade Design Released
September 9, 2010
originally posted on the Legal Climate Blog on Corporate Knights website
Can states and provinces go it alone?
As the federal governments of Canada and the United States struggle to get climate legislation off the ground, states and provinces stepping up to the plate and working together to address climate change.
The Western Climate Initiative (WCI) is one of the foremost North American partnerships, consisting of seven U.S. States and four Canadian Provinces (B.C., Manitoba, Ontario and Quebec), and they have been collaborating since 2007 to develop a regional cap and trade system for greenhouse gases (GHGs). Other states and provinces in the U.S., Canada and Mexico are observers to the program. Although a great deal of effort has gone into the WCI thus far, open questions relating to the political will and jurisdictional authority of provinces and states to implement a cap and trade program remain.
In July of this year, the WCI released the Design for the WCI Regional Program.This design confirms the intention to begin a cap and trade system in 2012 and other initiatives to address climate change. Since the U.S. and Canadian federal governments are presently either unable or unwilling to bring comprehensive climate policy forward, we welcome the design document released by the WCI. As a complete framework for a cap and trade system, however, it leaves many open issues.
For example, it allows individual jurisdictions to decide how to allocate and distribute allowances and regulate the use of offsets (carbon credits created by entities outside of the regulated sector, such as by planting trees). If member jurisdictions disagree about what is a valid carbon credit or who deserves carbon credits, carbon markets could be smaller and less efficient. In other words, it could be difficult to sell Ontario based credits in California if the ground rules are not similar: it would be like trading apples for oranges.
Important legal questions remain regarding the validity of regional approaches. With so much at stake for big polluters, powerful groups that have an interest in stalling state and provincial action on climate change may try to use the courts to fight these policies.
Professor Jonathan Zasloff of UCLA questions whether American courts will prevent states from enacting the WCI trading system. In a July blog post, he wrote, “Even if the federal government does not legislate on an issue, states cannot engage in foreign relations because that is reserved for federal control.”
Canadian provinces have the authority to enter into regional agreements, but the federal government can likely preempt provincial action on climate change. Scholars like Peter Hogg, Professor Emeritus at Osgoode Hall Law School, have looked at the question of constitutional powers related to climate change. In professor Hogg’s paper for the C.D. Howe Institute entitled A Question of Parliamentary Power: Criminal Law and the Control of Greenhouse Gas Emissions, he argues that the federal government has jurisdiction to regulate GHGs in Canada and potentially supersede provincial laws, and that the Government of Canada’s future regulation of greenhouse gas emissions are “likely to be upheld as constitutional exercises of the federal criminal-law power”.
The provinces and states can certainly pass laws and regulations, but they face the possibility that they will be challenged in court. The uncertainty over the outcome of such a challenge would increase if future federal laws were passed to regulate emissions.
While legal and political risks could delay the implementation of the WCI system, it is important that this initiative forges ahead. Business are starting to demand regulatory certainty with some large energy companies like Duke Energy coming out in favour of an economy-wide cap and trade system.
Strategically, an integrated WCI system could increase pressure on the U.S., Canadian, and Mexican federal governments to move forward on a broader North American program, even if parts of the WCI are superseded as a result. By creating a functioning market, the WCI can also show skeptics that reducing emissions through market pricing is a legitimate possibility, helping to keep market pricing on the radar during federal policy development.
Getting started is worth the potential risks in light of the mounting physical evidence of climate change, and the resulting devastation across North America and the globe.
