Jurisdictional Overview
| In May, 2011, the ECO his released third Annual Greenhouse Gas Progress Report. Click here for more information on this report, including videos and communications materials. | |||||
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Contents |
International
The Kyoto Protocol is the only international agreement with legally binding GHG emission reduction targets for industrialized countries. The first commitment period, which began in 2008, expires in December 2012. While the international community made some progress at the most recent meetings in Cancun, Mexico on climate financing mechanisms and transparency in the reporting of national climate commitments and actions, it has still yet to reach an agreement with binding post-2012 GHG reduction targets for both developed and developing countries.
United States
In June 2009, the U.S. House of Representatives narrowly passed comprehensive energy and climate legislation that included an economy-wide cap-and-trade program. Ultimately, the initiative stalled in the Senate because of a lack of bipartisan support. Following the November 2010 midterm elections, in which the Republican Party retook some control of Congress, it is unlikely that such legislation will re-emerge soon.
Federal climate policy development has continued however with the U.S. Environmental Protection Agency (EPA) using its authority to regulate GHGs as air pollutants under the Clean Air Act to legislate reductions from vehicles and new industrial facilities. New rules also require large emitters to collect and report their GHG emissions for the calendar year 2010 and beyond. This requirement will apply to approximately 10,000 facilities that are responsible for 85 per cent of the country’s GHG emissions. The EPA’s authority to regulate GHG emissions is currently being challenged by Republicans within the House of Representatives, and so the success of this legislative avenue of climate policy remains uncertain.
Federal
Canada’s reduction targets have undergone several revisions over the past few years. Under the 2002 Kyoto Protocol, Canada’s commitment was to reduce GHGs by 6 per cent below 1990 levels by 2012. In 2007, the government subsequently ‘recalibrated’ its target by calling for reductions of 20 per cent below 2006 by 2020. Following its decision in 2009 to harmonize its climate policy with the U.S., the federal government once again changed both its target and baseline year – the commitment now is for a 17 per cent reduction over 2005 levels by 2020. In absolute terms, this now means that Canada’s emissions will be about 5 per cent higher in 2020 than they would have been had the target set in 2007 been kept.
Along with an aligned target, the federal government intends to harmonize its climate policies with the U.S. In this regard the government has indicated its intention to adopt a cap-and-trade system if the U.S. moves forward on this front. The Canadian government has also stated its intention to align emission reduction activities and, in the transportation area, has recently done so with regard to light vehicle emissions standards.
Regional Carbon Markets
Given federal inaction, several Canadian provinces and American states have attempted to fill the void through regional climate policy networks. The Western Climate Initiative (WCI) is one such example of various jurisdictions working collectively to implement complementary GHG reduction policies. A central component of the WCI is the development of a cap-and-trade system that is scheduled to begin in January 2012. Three of the eleven original jurisdictions have indicated their readiness to begin at that time (California, British Columbia and Quebec), however participation is uncertain given the recent launch of a California court challenge and a new provincial government in British Columbia. In April 2011, the Ontario government announced that it would delay participating in the WCI due to a number of outstanding policy issues. Particularly lacking is verified emissions data from regulated facilities upon which to base the provincial carbon budget and allowance allocations.
The Regional Greenhouse Gas Initiative (RGGI) began as the first GHG cap-and-trade program in North America in 2005. Focused on the power sector, RGGI’s goal is to reduce emissions 10 per cent by 2018. All RGGI emissions allowances have been auctioned by regulators with revenues earmarked to finance renewable energy and energy efficiency projects. Ten northeastern U.S. states are currently involved; however both New Jersey and New Hampshire have recently indicated their possible withdrawal. A third regional cap-and-trade program that was in development – the Midwestern Greenhouse Gas Reduction Accord – has been abandoned by the U.S. states involved.
