Transcript only `green` international credits will be recognized for Canadian

Greening Canada’s
International Purchases
Climate Law Symposium
December 3, 2005
Warren Bell, IISD
Why should Greening be important
to Canada? (1)
 Greening is key for Canadian compliance
 Canada will need to make substantial international
purchases
 “Hot air” completely unacceptable in Canada
 Greening offers economic benefits
 In exchange for AAUs, Canada could provide services,
technology and capacity building
 Opportunities in gas transmission, energy efficiency
and conservation
Why should Greening be important
to Canada? (2)
 Greening is key to effectiveness and credibility of
international emission trading

IET a cornerstone of climate regime


….but without greening, AAU trading may be very limited
Implications for post-2012
 Greening can increase environmental effectiveness
of Kyoto Protocol


Additional reductions in 2008-2012
Long-term transformation
Canadian Climate Change Plan
 Climate Fund purchases of international credits:
“100 percent of the proceeds from the purchase
must be reinvested in projects and activities that
contribute to GHG emission reductions in the
seller country.”
 Large Final Emitters with regulated targets:
“only ‘green’ international credits will be
recognized for Canadian compliance purposes.”
What might Canadian Greening
look like?
 Wide range of possible projects/activities:
 From specific emission reduction projects (e.g. gas
pipeline leaks)…
 …to strengthening climate change policy capacity…
 …to supporting transformation in energy production
and use
 Dimensions:
 Quantification – “hard” vs. “soft” greening
 Timing – 2008-2012? Post-2012?
 Canadian purchases may reflect a mix
“Hard” Greening
 Projects/activities that achieve quantifiable
emission reductions
 Direct relationship between greened AAUs and
reductions achieved
 Greening offers flexibility:
 Timing – reductions beyond 2012
 Ratio of AAUs to reductions
 May have higher credibility with Canadian
stakeholders
“Soft” Greening
 Reductions not easily quantified
 Address opportunities not easily captured by
project-based trading:



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Government programs that fund energy efficiency,
renewable energy, fuel switching
Outreach and education
Clean energy technology demonstration projects
Strengthen climate change policy capacity – including
completing inventories and registries
Greening and Long-term
Transformation
 Greening could help effect long-term transformation to a
low-carbon economy in host countries
 Build enabling environments for investment in sustainable
energy


Support policy changes – energy sector market reform, energy
efficiency standards
Address hard-to-tackle sectors like transportation
 Part of a broader, strategic approach linked to other
initiatives

Export credit agencies, Industry Canada, Foreign Affairs
Implementation Issues
 Main Canadian buyer will be the Climate Fund
 Bilateral agreements with seller countries
 Possible scope for multilateral approach?
 What role for Canadian private sector?
 Partnerships with government
 Joint ventures
 Credibility is overriding concern
 Monitoring, reporting, verification
 Governance and management
Host Country Implementation
 Host countries will need to:
 Screen projects and proposals, provide funding, carry
out monitoring and reporting
 Finance projects – where AAU funding is not all
delivered at once
 Lever additional funding
 Provide different types of greening services to different
buyers
 Significant capacity needs
 Role of existing institutions
Path Forward
 In Canada
 Climate Fund preparing for launch
 Informal consultations on elements of greening
 Main challenge is public/stakeholder perception

International emission trading = “hot air”
 AAU market at early stage of development
 Canada and other countries can play a leading role in
defining the market