The motion tabled by the NDP asked the House to condemn the lack of progress in addressing GHG emissions in Canada by successive federal governments since 1998. It also requested the release of a climate change adaptation plan and asked the House to “agree with many Canadians and the International Energy Agency that there is grave concern with the impacts of a 2 degree rise in global average temperatures”.

Without the support of the Liberals or Conservatives in the House, the motion failed. Green Party MP Elizabeth May criticized the motion for not calling on the federal government to take action to fight climate change and also voted against it.

On the international front, the federal government withdrew from the United Nation’s Kyoto treaty and rejected Canada’s treaty obligations. Canada is the only country to ratify and withdraw from this international agreement.

Canada currently lacks comprehensive climate policy, however elected representatives across Canada are pushing for more action. Their efforts have been demonstrated both in federal debates and in regional developments such as closing coal-fired power plants in Ontario, the establishment of a broad carbon tax in B.C., and industry specific carbon pricing in Alberta.

Ontario is going to close all of the province’s coal-fired power plants by the end of 2014, which is the largest climate change initiative in North America. The province has also released a discussion paper describing its intention to align provincial regulation with federal regulation, which could result in a sector-by-sector approach to greenhouse gas regulation. So far, however, the federal government has only released coal regulations, which will not affect Ontario due to the phase out.

British Columbia’s carbon tax took effect in 2008 and is helping to reduce the use of fossil fuels in the province. The impacts have been negligible on the economy and the public is supportive. Experts say, to strengthen this policy, exemptions to the tax need to be addressed and suggest that the rate should be increased and a larger portion of revenues raised allocated to climate solutions.

In addition to a modest carbon tax, Quebec has capped carbon emissions in the province and has implemented the Western Climate Initiative so that the carbon trading market of Quebec will merge with that of California. The deal to connect the two carbon markets was approved April 12^th after the Governor of California and regulatory bodies signed off on the equivalency of the two systems.

Lastly, the Alberta government has proposed to increase the carbon tax in the province from $15 to $40 per tonne. The initiative is being lead by Environment and Sustainable Resource Development Minister Diana McQueen with support from the energy department. Currently, the Alberta government is seeking industry comments on the so-called 40/40 proposal. Industries in Alberta currently have a target of improving their emissions intensity by 12% relative to a baseline. If they can’t meet that target, they can pay $15 a tonne into a technology fund. The 40/40 plan increases the emissions intensity target to 40% and the penalty to $40 a tonne. Despite current policy, the Alberta government is not on track to meet its own greenhouse gas emission reduction target of reducing 50 million tonnes per year by 2020.

There are various other measures occurring at regional, provincial and local levels across Canada. Some elected officials are working to push climate change as a priority policy area. Despite the attention and debate the policy issue receives, Canada is unlikely to meet GHG reduction and adaptation targets without concerted and coordinated effort and a comprehensive policy that pushes for action across the country.

Further Reading:

http://www.theglobeandmail.com/news/politics/globe-politics-insider/ndp-jump-back-into-climate-debate-undeterred-by-carbon-tax-attacks/article11543085

http://elizabethmaymp.ca/news/blogs/2013/04/29/why-i-voted-against-the-ndp-climate-motion/

http://news.nationalpost.com/2013/04/27/federal-politicians-use-non-partisan-climate-group-to-meet-in-safe-space-behind-closed-doors/

http://www.pembina.org/blog/707

http://www.edmontonjournal.com/technology/Alberta+carbon+would+more+than+triple+under+government/8213625/story.html

http://zizzoallan.com/2013/01/29/ontario-accelerates-coal-phase-out-and-releases-ghg-emissions-reduction-discussion-paper/

http://www.kcet.org/news/rewire/climate-change/california-carbon-credits-will-soon-be-good-in-quebec.html

The development charge, as currently implemented in most Ontario municipalities, is crudely designed. There is a strong chance that it is subsidizing less-dense, single family homes while making compact, transit-friendly development more expensive. Development charges also likely overcharge some commercial development, and this could be contributing to the flight of office space to the suburbs, in locations underserviced by transit.

To read more about the problem with the current system and some suggested solutions, take a look at the full post here.

Photo by Jennifer Roberts, courtesy of Postmedia News

We are honoured to be featured in this postmedia story on environmental lawyers. The article was run in various post media news outlets this week.

We work on the mantra expressed in the article, that environmental lawyers have a significant role to play in addressing the significant challenges posed by climate change and other environmental concerns. We welcome these challenges and look forward to continuing to support workable solutions for our clients.

Lately the government’s environmental track record has been subject to heightened scrutiny linked to Canada’s lack of comprehensive greenhouse gas emission regulations and the impacts of the rollback of environmental protection measures from last year’s budget are also beginning take effect.

Environmental issues were notable in their absence given this atmosphere of scrutiny; the 433-page budget fails to mention climate change.

Infrastructure

$53.5 billion in new and existing funding was announced for provincial, territorial and municipal infrastructure spending largely through replacing of a soon-to-expire plan and summing the total over 10 years. While the infrastructure spending is sorely needed across Ontario, the actual amount that cities and provinces will receive each year will likely be similar to the amount they would have received previously.

This contribution falls short of what will be required to rehabilitate Canada’s crumbling infrastructure. The Federation of Canadian Municipalities has estimated that Canadian municipalities have an infrastructure deficit of $124 billion due to the deferral of repairs over the past 20 years. Nonetheless, municipal politicians and the Federation of Canadian Municipalities applauded the announcement as a good start[1].

This business-as-usual infrastructure spending comes at a time when cities and provinces will need to make large infrastructure investments to address new climate risks. An increase in extreme weather events due to climate change has serious implications for infrastructure and public safety.

In addition, the prioritization of public transit is key to avoid building infrastructure that will commit us to decades more greenhouse gas pollution. The $53.5 billion earmarked for infrastructure over the next 10 years does not provide specifically for public transit. Provinces and municipalities could potentially use these funds to invest in underfunded local and regional transit, but all levels of government would need to make this a priority.

Cleantech and Innovation

The 2013 budget is largely a missed opportunity to invest in the clean energy transition that is taking place worldwide. The budget included one small tax credit for clean energy worth only $1 million over two years, which is a diminutive amount considering the opportunity for clean energy job creation. It represents an investment that is 14 times less, per capita, in renewable energy than President Obama’s proposal.

The budget included $325 million over 8 years of funding for Sustainable Development Technology Canada. This ensures continued funding for clean technology research and development but less than the $500 million over 5 years requested by a coalition of environmental groups.

Adaptation Internationally

The budget made no mention of Canada’s ongoing commitment to help poorer countries adapt to the impacts of climate change. However, a department merger will have implications for Canada’s role in international climate change adaptation. A new department called the Department of Foreign Affairs, Trade and Development was created by merging the Canadian International Development Agency (CIDA) with the Department of Foreign Affairs and International Trade (DFAIT).

This move suggests that international development, including aid for adaptation to climate change, will be more aligned with the government’s foreign and trade policies. It does have to potential to allow development projects access to more resources than were previously available.

The 2013 federal budget brought forward little to put Canada on track to meet its 2020 greenhouse gas emission reduction target of 17% below 2005 levels. However, it shows the government’s focus on investment in Canada’s infrastructure and innovative sectors. It falls short of comprehensively address the climate risk faced at home and aborad.

NRTEE Report, Emissions Trading Regimes and Recent Amendment to Local Improvement Charge Regulation Show Movement Towards  a Low-Carbon Economy

By Laura Zizzo*

The low-carbon economic future is now. From market projections for low-carbon goods and services to pockets of global carbon pricing and even to municipal financing options for energy projects, a patchwork of low-carbon economic activity is establishing itself as the new paradigm. Pundits have been predicting its arrival for years, and although national and international carbon reduction legislation has not been implemented as quickly as some predicted (or hoped), the low-carbon future is upon us.

NRTEE Report highlights need for better policy signals for growing low-carbon goods and services market

Last month the National Round Table on the Environment and the Economy (“NRTEE”) released Framing the Future: Embracing the Low-Carbon Economy[1] – the final report in its six part Climate Prosperity Series.

The report states that markets for low-carbon goods and services (“LCGS”) are expanding, and could grow from $339 billion in 2010 to between $2.9 and $8.3 trillion per year by 2050. It also estimates that annual domestic spending on LCGS could rise from an estimated $7.9 billion to between $36 billion and $60 billion over the same period, depending on the policies that are implemented. Either way, it forecasts faster growth in the LCGS sectors than the Canadian economy overall.

NRTEE has studied the convergence of the environment and economy for years, consulted hundreds of experts and stakeholders and has concluded that the future is low-carbon. The report calls for clear policy signals to help Canada transition to this low-carbon economy and for a national price on carbon to meet the pressing need to rapidly reduce GHG emissions.

The report warns that getting to 2020 without clear policy will result in wasted opportunity to adapt infrastructure and equipment as it is renewed, costing the government and companies $87 billion in refurbishments, retrofits and premature retirement of assets.

Environment Minister Peter Kent rejected the report’s findings, saying that a price on carbon, a precondition to the NRTEE’s advice, was off the table.[2] Notably, the current government cancelled NRTEE’s funding in the last budget. The stated reason was redundancy, although some government officials claimed that NRTEE was out of step with government priorities.

Carbon pricing still relevant

Despite the current federal government’s unwillingness to discuss implementing a carbon price, other North American jurisdictions are doing just that. Under the Western Climate Initiative (“WCI”)[3], Quebec and California are set to start cap and trade systems in 2013. Quebec and California will eventually have linked trading systems, although the details are still being worked out.[4] California had its first carbon auction of allowances on November 14.[5] An allowance is an entitlement to emit one metric tonne of carbon dioxide equivalent gas. Allowance prices are expected to range from $19 to $34 per tonne in 2013 and from $31 to $55 per tonne in 2020, depending on offset availability.[6] Additionally, Alberta and British Columbia both have limited carbon pricing regimes, with a targeted baseline credit system and carbon-tax, respectively.

Ontario, a WCI partner, still plans to participate and implement a cap and trade system; however, it has not yet released regulations for comment and a date of implementation has not been announced.

Nine states in the northeastern and mid‐Atlantic U.S. have operated the Regional Greenhouse Gas Initiative (“RGGI”) since 2009.[7] RGGI is a cap‐and‐trade system that applies to power plants in the region. Allowances currently trade at $2 per tonne[8] and a program review is underway.[9]

Globally, carbon pricing and markets are evolving. Recently, the EU and Australia announced their intention to link emissions trading systems in the future.[10] They have agreed that by July 1, 2018 businesses will be allowed to use carbon units from the Australian emissions trading scheme or the EU Emissions Trading System for compliance under either system. China has launched a pilot emissions trading system this year and South Korea is set to launch its emissions trading system in 2015. Numerous other jurisdictions have carbon pricing in the form of a tax or market-based system. Although we are a far way off from global carbon pricing, the concept is still alive and developing.

Changes to local improvement charge regulation in Ontario to encourage new LCGS investment

At a more local level, recent amendments[11] to local improvement charges (LIC) regulations under the Municipal Act, 2001 and the City of Toronto Act, 2006[12] empower Ontario municipalities to use LICs (and, in effect, the property tax system) to finance energy efficiency and renewable energy projects.[13]

LICs have traditionally been used to finance water and sewage connections, sidewalk improvements and similar infrastructure projects outside of the home on private property. The amendments allow LICs to fund energy efficiency projects within a home or building and support renewable energy projects, thus providing favourable financing rates and tying the debt to the property, not personally to the owners. Costs will be repaid over 10 to 20 year terms and show up as a small surcharge on property tax bills. Outstanding debts will be automatically transferred to new owners upon property transfer. Additionally, by linking to the property rather than the individual property owner, it could make investments much more financially attractive and feasible, as both the benefits and the debts associated with projects will be passed on to future owners.

The regulatory amendments enable municipalities to implement programs but do not provide guidance on how to structure them. It will take some time for municipalities to get programs up and running. A coalition of interested municipalities, including the City of Toronto, are working to design pilot programs in the hopes that by this time next year, new forms of financing may be available in at least some Ontario municipalities.[14]

These amendments mirror other Property Assessed Clean Energy (PACE) financing options taking hold throughout North America and are designed to address the capital cost barrier to making energy efficiency improvements and assist property owners to harvest the low hanging fruit that can lead to substantial energy efficiency gains and greenhouse gas emissions reductions.

This development further supports the NRTEEs prediction that those offering energy efficiency and renewable energy goods and services may have an expanding market shortly. Let’s take this as a healthy sign that the low-carbon economy is upon us, despite a sluggish regulatory start.

*Laura Zizzo is a Partner at Zizzo Allan Professional Corporation, where she practices climate change, environmental, business and energy law and policy. (416) 817-5140, laura@zizzoallan.com.

The press release can be found here.

Minister Kent is quoted in the Globe and Mail article as saying: “Our government continues to align our measures with the United States” and that “The fuel savings that will result from these regulations will far outweigh any vehicle price increase, and this from the very first year.”

Examples of the vehicles the new standards will apply to:

• full-size pick-ups
• semi-trucks
• garbage trucks
• buses

A backgrounder for the US Heavy-Duty National Program, (formal name Greenhouse Gas Emissions Standards and Fuel Efficiency Standards for Medium- and Heavy-Duty Engines and Vehicles, signed August 9, 2011) can be found here. The full rule can be found here.

Some readers may find the “Program Flexabilities” of the US system interesting. An excerpt describing them from the Backgrounder (emphasis added):

The primary flexibility provisions are an engine averaging, banking, and trading (ABT) program and a vehicle ABT program. These ABT programs will allow for emission and fuel consumption credits to be averaged, banked, or traded within each of the deined averaging sets. There are three weight-based averaging sets for two of the regulatory categories: combination tractors and vocational vehicles. The pickup trucks and vans are one leetwide averaging set, and there are four averaging sets for engines.

In addition to the general ABT programs, EPA is providing engine manufacturers and heavy-duty pickup and van manufacturers the added option of using CO2 credits to offset CH4 or N2O emissions that exceed the applicable emission standards based on the relative global warming potentials of these emissions.

The full (unofficial) Canadian regulation can be found here.

Fleet and sub-fleet averages are dealt with in section 21, while CO₂ credits for a fleet or sub-fleet are permitted under section 34:

34. (1) For the purposes of subparagraph 162(1)(b)(i) of the Act, a company obtains CO emission credits if the CO emissions for a fleet or subfleet, as the case may be, of heavy-duty vehicles or heavy-duty engines of a given model year are lower than the CO emission standard applicable to that fleet or subfleet, as the case may be, and for that model year, and the company reports the credits in its end of model year report in accordance with section 48.

Toronto City Council is scheduled to consider the Committee’s recommendations and advice on February 20, 2013.

This is a significant step toward the city recognizing the ever-growing need for adaptive infrastructure; as more frequent freeze/thaw events throughout the year continue to stress the city’s already aging infrastructure, municipalities are bring drawn to the centre of the strategy to keep citizens safe and public systems running smoothly. This results in major liability concerns for the municipalities and government agencies. While Toronto’s Future Climate: Study Outcomes was commissioned after a 2005 rainstorm that cost the city $47 million in repairs and the insurance industry over $600 million in payouts for personal property damage, there continue to be extreme weather fall-outs in Ontario cities that point to the financial importance of adaptive infrastructure. In Thunder Bay, for example, the city is currently being sued for over $800 million in class action suits related to flood damage after pump failures and flooding at a treatment plant led to a state of emergency last May.

Finch Washout 2005 – courtesy of Jane-finch.com

Ontario is making history: as part of the largest climate change initiative in North America, the province announced the early closure of its two largest Southern Ontario coal plants by the end of 2013, a year ahead of schedule. With the closure of the Nanticoke and Lambton plants, 17 of the provinces 19 coal units will be closed, keeping Ontario on track to completely phase out coal as a source of electricity production by the end of 2014. Already, over 80 per cent of Ontario’s power is generated from a diverse mix of sources, including nuclear energy as well as such cleaner sources as hydro and renewables. The mix also includes significant natural gas.

The announcement represents a longstanding commitment to reducing the province’s dependency on coal; Ontario has reduced its use by nearly 90 per cent since 2003. With the closure of Nanticoke and Lambton, greenhouse gas emissions promise to decrease from a high of 41.4 megatonnes in 2000 down to five megatonnes after 2020. Sulphur dioxide and nitrogen oxides emissions are already down 93 per cent and 85 per cent, respectively, since 2003, and 2011 mercury emissions were the lowest on record in over 45 years. Plus, the initiative is estimated to save the province $4.4 billion annually considering health and environmental costs.

With the Liberals finally following through on their 2003 election promise to close the coal plants, the government’s next steps are as yet unclear. Ontario has not yet defined how it will regulate greenhouse gas emissions in the future. However a discussion paper released earlier this month indicates that it intends to pursue equivalency agreements with federal regulation aimed at limiting greenhouse gas emissions. This means that Ontario will ensure that its policy development will be tied to federal developments, and that we may see regulations being released on a sector-by-sector basis rather than comprehensively across major emitters, as would be the case if Ontario were to implement a cap and trade system similar to the regimes recently implemented in California and Quebec. The federal government has already released regulations for coal-fired electricity generation, which will not affect Ontario due to the coal phase-out. Future regulation of others sectors, like natural gas, could have a significant impact on the province and need to be addressed soon to limit duplicity of regulation – particularly as regulations are expected as soon as 2016.

The province is currently consulting with a range of stakeholders. Policy makers appear open to any and all comments related to a greenhouse gas reduction regime in the province, and aim to increase stakeholder involvement and buy-in with regards to the development of these policies. The recently released discussion paper focuses on an outcome-based policy (in other words, a cap on emissions for each sector) and is suggesting flexible compliance mechanisms that include emissions trading and the use of offsets.

The discussion paper discussing Ontario’s next steps is available through the Environmental Registry here, and is open for a 90-day comment period ending April 21, 2013.

“We, the people, still believe that our obligations as Americans are not just to ourselves, but to all posterity. We will respond to the threat of climate change, knowing that the failure to do so would betray our children and future generations. Some may still deny the overwhelming judgment of science, but none can avoid the devastating impact of raging fires, and crippling drought, and more powerful storms. The path towards sustainable energy sources will be long and sometimes difficult. But America cannot resist this transition; we must lead it. We cannot cede to other nations the technology that will power new jobs and new industries – we must claim its promise. That is how we will maintain our economic vitality and our national treasure – our forests and waterways; our croplands and snowcapped peaks. That is how we will preserve our planet, commanded to our care by God. That’s what will lend meaning to the creed our fathers once declared.”

Already, the administration is reportedly working to adopt new energy efficiency standards for home appliances and buildings, clamp down on coal-burning power plants, and work with the Pentagon to convert to renewable fuels.

While drawing criticism from conservatives ­– Tim Phillips of Americans for Prosperity released a statement referring to it as “environmental extremism” – Obama’s address garnered an energized response from environmental advocacy groups. According to CNN, the Sierra Club and the Environmental Defense Fund, among others, are already calling the president to make good on his commitment, encouraging him to circumvent congress by focusing on executive orders and Environmental Protection Agency regulation. And the New York Times pointed to Obama’s address as “a case study in his evolving sense of the limits of his power and his increased willingness to work around intense conservative opposition rather than seek compromise…he is…intent on making sure his approach is vetted politically, economically and technologically so as not to risk missing what many environmental advocates say could be the last best chance for years to address the problem.”

Whether or not any meaningful legislation can be passed, it is encouraging to think that the President has committed to using the powers at his disposal to address this most pressing of global challenges. The world, and Canada, has been waiting on Washington to take the lead for years, and the recent address offers hope that leadership might finally be on the way.

One excerpt from Saba’s article:

The two speakers’ views diverged on models of public versus private ownership.  Mr. Tabuns promoted public ownership of energy infrastructure.  Citing the Bruce Power nuclear facility and gas-fired plants, he stated privatization costs Ontario $1 billion per year.  He said public ownership mobilizes political support needed to promote investment in green energy.

Mr. Smitherman was skeptical about models of public ownership.  “I’m not responsible to employ the Power Workers Union,” he said.  He applauded Ontario’s Feed In Tariff (“FIT”) program for allowing anybody to be an electricity generator.  As in Denmark, he said, Ontario should promote community involvement, so that not only “big players” get all the funding.  Further, he argued under FIT, participants bear the responsibility to bring their projects in on time and on budget, so that overruns are not “piled up” as long-term-debt for the people of Ontario.

LtR: Travis Allan, George Smitherman, Peter Tabuns
Photo Credit: Saba Ahmad, 2013