Transcript Canada and the US - International Institute for Sustainable

Exploring the Challenges and
Opportunities for Establishing a North
American Emissions Trading System
John Drexhage
Director, Climate Change and Energy
IISD
Contributors to Climate Change (1900 to 2000)
Former Soviet Union
12%
Sub Saharan Africa
4%
North America
25%
Mid East and North
Africa
4%
South and Central
America
10%
Developing Asia
19%
Europe
20%
Pacific Asia, Industrial
6%
Source: WRI, Options for Protecting the Climate, 2002
Appendix 2.1
Global Per Capita Emissions
Tonnes of Carbon Per Person
70
+ 38%
+ 16%
60
50
40
+ 7%
30
20
+ 43%
+ 38%
+ 23%
+ 24%
10
0
United
States
Canada
Russia
Japan
EU
Latin
America
China
India
B
h
rta
m
bi
a
lb
e
ol
u
A
w
an
ito
ba
tc
he
C
sk
a
rit
is
Sa
M
an
ar
io
1990
O
nt
c
tic
be
tla
n
Mt
Q
ue
A
Appendix 2.1
GHG Emissions By Province
2010
250
200
150
100
50
0
W
as
/O
th
e
rs
m
s
er
at
io
n
us
tr
ie
s
os
ys
te
te
s
gr
oe
c
G
en
lI
nd
n
+ 66%
A
ity
lF
ue
El
ec
tri
c
ss
i
200
Fo
150
sp
or
ta
tio
tri
al
- 2%
us
1990
Tr
an
l
m
er
ci
al
de
nt
ia
Mt
250
In
d
om
es
i
50
C
R
GHG Emissions By Sector
Appendix 2.2
2010
+ 34%
+ 8%
+ 24%
100
+ 16%
+ 31%
+ 55%
0
Canada’s Projected GHG Emissions: All
talk and voluntary actions
900
Business as Usual
Projections
Mt CO2 equivalent
850
800
(1999)
699 Mt
750
700
2010 Emissions
809 Mt
1990 Emissions
607 Mt
BAU Gap
238 Mt
33% above 1990
650
600
Kyoto Target
571 Mt
6% below 1990
550
500
1990
1995
2000
2005
2010
2015
2020
GHG Emissions By Selected States
1990
Mt
2003
800
+ 38%
700
+ 16%
600
500
400
+ 7%
300
+ 24%
+ 38%
Ohio
Pennsylvania
200
100
0
California
Illinois
New York
Texas
A Challenge? Comparison of Oil Sands versus
Conventional Oil Production in Canada
5000
4500
4000
3500
3000
2500
Oil Sands
Conventional
2000
1500
1000
500
20
19
20
17
20
15
20
13
20
11
20
09
20
07
20
05
20
03
20
01
0
Source: CAPP, 2007, Canadian Crude Oil Production and Supply Forecast 2006 - 2020
Figure 3: US Share of Exports and
Imports on the Decline
….with the very notable exception of
energy….

The United States is Canada’s major trade market for energy products,
accounting for 99% ($84.8 billion) of all Canadian energy exports for
2006 – up from $50 billion in 1990
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Some with different climate change implications….
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Canada exported $36.0 billion of natural gas to the United States (100%). In
volume terms, Canada accounted for more than 85% of U.S. gas imports
and had a 16% share of the U.S. market.
Electricity exports, mostly sourced from hydro represented some 3.1 billion in
sales.
than others:
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Exports of crude oil were 1 578 000 barrels per day in 2005, valued at $29.9
billion. More than 99% of these exports were U.S.-bound. Canadian crude oil
held an 11% share of the U.S. market in 2005 and accounted for more than
16% of U.S. crude imports.
Linking Systems
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Three broad state level/regional actions:
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West Coast Initiative (Targets, etc, still under design, but
likely absolute with limits on international or even interregional credits, but interest in technology offsets )
RGGI (Absolute targets, limits on offsets access)
Climate Action Registry (No targets)
Provincial Actions
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BC (absolute), Alberta (intensity), Quebec and Manitoba
(Kyoto – absolute); with Ontario soon to come (absolute a
shoo in)
Federal Regulatory Framework
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GHG intensity reductions of 6% per year
2007 – 2010
2006 baseline with 20% reductions by 2020
and 60 to 70% by 2050
2020 target equivalent to 150 M tonnes in
absolute terms
Four compliance options: emissions
reductions, Tech Fund, Trading, One-time
Early Action Credit
Federal Initiatives (Canada)
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Conservative Plan
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Regulatory Framework for Large Emitters
Integrated approach on air issues
Intensity Based – 18% by 2010; 2% per annum
thereafter, and 20% absolute by 2020
The four compliance provisions:
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Technology Fund
Offsets
Credits for Early Action
Limited CDM Access for Industry
Federal Regulatory Framework
Offsets:
 Climate Change Technology Fund (Perm or
Temporary, with receding access?)
 Def’n of offsets
 Max. 10% of intensity target allowed to go to
certain CDM credits
 Next step? – linking with N.A. ETS (WCI,
RGGI)?
 Explore linking internationally
British Colombia
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Emissions target of 33% below 2007 levels by 2020 (10%
below 1990 levels)
 Targets for 2012 and 2016; Long term target for 2050 in
development
Set to introduce legislation in late 2007 to institute hard cap on
emissions, as part of WCI
Other actions/interest:
 adoption of tail pipe standards
 low carbon fuel standards (reduction of at least 10% in the
carbon intensity -from well to wheel- of its transportation fuels
by 2020
 B.C. Energy Plan: A Vision for Clean Energy Leadership (2007)
emphasizes renewable energy, energy efficiency and CCS
Alberta
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Albertans and Climate Change: Taking Action (2002)
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reduce GHG emissions intensity by 50% below 1990 levels by 2020.
completed commitments made under the 2002 plan by achieving a 15%
reduction in emissions intensity between 1990 and 2002.
Climate Change and Emissions Management Amendment Act
(2007)
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Limits GHG emissions intensity for large emitters
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Reductions may be made via operational improvements, the purchase of
offsets or contributions into a climate change Technology Fund.
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(>100,000 t GHG/yr must reduce emissions intensity to 12% below facility’s
average emissions intensity from 2003-2005 by end of 2007.
New facilities must reduce intensity by 2%/yr after third year of operation.
Fund contribution rate is $15/tonne of greenhouse gas.
In process of renewing its Climate Change Action Plan, anticipating
late 2007 release.
Provincial offset system in development
Saskatchewan
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Saskatchewan Energy and Climate Change Plan
(2007)
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Emissions stabilized by 2010
Reduce GHG emissions by 32% from 2004 levels by 2020
Reduce emissions by 80% from 2004 levels by 2050
Proposes local Technology Fund & Emissions Offset Fund,
aiming to ensure that benefits of compliance measures
taken in province under federal regime (via offset
purchases or Technology Fund contributions) remain within
province
Manitoba
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Kyoto and Beyond: Manitoba’s Climate
Change Action Plan (2002)
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meet and exceed Kyoto Protocol reduction targets
(6% below 1990 levels by 2012)
Plan currently being updated and expected to
introduce new legislation in late 2007
Establishing an offsets registry with CSA and Cdn
Climate Exchange
Joined the WCI and Climate Registry
Ontario
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Ontario Action Plan on Climate Change (2007)
 relaxes targets originally introduced in Ontario’s Climate Change
Act.
 Commits to reductions of 6% below 1990 levels by 2014 (instead
of 2012), 15% below 1990 levels by 2020 (instead of 25%) and
an 80% reduction from 1990 levels for 2050.
 Plans to close its four remaining coal-fired power generation
plants by 2014, make investments in rapid transit, double
renewable energy generation and improve energy conservation
measures
 First jurisdiction in North America to introduce a Standard Offer
Program (also know as ‘feed-in tariffs) to reduce barriers to small
renewable energy generators
 Supported by Ontario’s Renewable Porfolio Standards of an
additional 5% renewables by 2007 and 10% by 2010.
Quebec
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Quebec and Climate Change: a Challenge for the
Future (2006)
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Reduction of 6% below 1990 levels by 2012
Includes carbon tax involving levies on gasoline, diesel
fuel, light heating oil and coal, representing a levy of about
$3 to $3.50 per ton emitted.
Focuses on public transportation, renewable energy
generation, energy efficiency including a new building code
by 2008 by up to 25% and regulating vehicle fuel efficiency
to California standards.
Supported by Using Energy to Build the Quebec of
Tomorrow: Quebec Energy Strategy (2006-2015),
committing to increasing renewables: 4000 MW of wind by
2015 and 4500MW of water by 2010)
Prince Edward Island
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A Climate Change Strategy for Prince Edward Island
(2005)
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Reductions to 1990 levels by 2012 and 10% below 1990
levels by 2020 (NEG/ECP CCAP)
9 recommendations for addressing climate change
focusing on renewable energy, transportation, energy
efficiency, building partnerships, coastal management and
land use planning, forestry, and waste management.
Supported by Energy Framework and Renewable Energy
Strategy (2004) and Renewable Energy Act, mandating a
Renewable Portfolio Standard of 15% for 2010.
New Brunswick
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Climate Change Action Plan (2007)
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Reductions to 1990 levels by 2012 and 10% below 1990
levels by 2020 (NEG/ECP CCAP)
Focuses on demand-side management and renewable
energy in the electricity sector and improvements in public
transit, fuel efficiency and alternative fuels in the
transportation sector.
Other components of note include qualifying forest
management-based offsets under the federal regime,
“improving” nuclear power generation and consideration of
clean coal and CCS technologies.
Nova Scotia
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Environmental Goals and Sustainable
Prosperity Act (2007)
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10% below 1990 levels by 2020
21 goals and commitments on renewable energy,
GHG emissions, and sectoral strategies
Supported by Renewable Energy Standards
Regulations (2007) mandating a portfolio of
20% renewables by 2013
Newfoundland
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Climate Change Action Plan (2005)
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Reductions to 1990 levels by 2012 and 10%
below 1990 levels by 2020 (NEG/ECP CCAP)
40 action items including energy efficiency, a
‘house in order’ strategy for government, fuel
efficiency of fishing vessels, research initiatives on
carbon accounting in forestry management;
An energy plan which will support these actions is
currently being prepared.
Territories
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Yukon: Climate Change Strategy (2006)
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Northwest Territories: Greenhouse Gas Strategy (2007-2011)
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Builds on existing programs, activities and experience to respond to the
impacts of climate change
No specific GHG targets
Commits to lead through example by adopting a target to reduce emissions
from its own operations to 10% below 2001 levels by the year 2011.
Commits the territory to establish longer-term targets beyond 2011 by
undertaking another review in 2010 in recognition of an equitable approach
to Canada’s international commitments
Nunavut: Nunavut Climate Change Strategy (2003)
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No specific target
Commits to identify and monitor climate change impacts, and develop ways
of adapting to change.
Linkage Issues
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Canadian provincial and federal actors all
strongly interested to coordinate with US
initiatives
Not as clear if this has the attention of US
actors (exception of Schwarznegger?)
Clearly led from the top
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Bureaucrats all scrambling around: what does it all mean
and how to coordinate?
Implications for linking with EU ETS?
Provincial Affiliations
West Coast Initiative:
 British Columbia and Manitoba members;
Saskatchewan, Ontario and Quebec observers
NEG-ECP
 All Eastern Provinces members
RGGI
 All five Eastern provinces are RGGI observers;
Ontario and Quebec have expressed an interest in
membership
The Climate Registry
 British Columbia, Manitoba and Quebec are
members; all provinces have committed to join TCR
Canada-US Air Quality Agreement
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Example of Canadian – US cooperation to address
transboundary air quality
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½ of acid rain in eastern Canada comes from American
sources, the cooperation of the U.S. was needed to reach
the reduction targets
1991 Canada-U.S. Air Quality Agreement
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Both countries agreed to reduce emissions of SO2 and NOx,
the primary precursors to acid rain
Expanded cooperative efforts to control transboundary
ground-level ozone and particulate matter (PM), the primary
precursors to smog
Linkage Issues
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Intensity vs. absolute
Stringency
Timing Provisions
Role of offsets
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What and where
Price caps
Technology incentives/funds
Auctioning vs. Grandfathering
Credits for early action
Registry reporting
State/Provincial – Federal Coordination
Broader Areas of Cooperation
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Areas for progress:
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Continental approach to energy AND climate change
 Potential for regional carbon trading systems
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Integrated approach on energy and climate
Trade and investment
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Biofuels and energy subsidization
Transportation
 Vehicular and air
Urban planning
Post 2012: Supporting a clean energy future internationally