The recent Globe Conference was held in Vancouver this year and I had the opportunity to attend a few sessions. Of everything I saw, the North American Carbon Trading session interested me the most.
Why? Well, one of the key goals in managing climate change, not only in North America, but globally, is to effectively put in place legislation to help control greenhouse gases. Copenhagen made little progress on this goal, and so now the next major question on the global scene is What will the United States do? Although other areas like Europe and Australia have carbon emissions trading schemes, we in the Western Hemisphere are woefully lagging behind in curtailing our greenhouse gas emissions. Here in Canada, it is even worse. We don’t have any major federal initiatives besides the official line that we are, too, watching and waiting on the US. Ok ok, we have mandatory greenhouse gas reporting, and this Turning the Corner document for Canada’s Offset System, but we still have not nearly made it around the bend.
So, what will get us rolling along? That leads me to my biggest takeaway from this session. It came from Janet Peace of the Pew Center (see below for references). She said that we can likely expect action soon from the Obama administration on US federal climate change legislation. Not only that, but she put a date on it. June! With the health care issue largely dealt with for now, Obama may indeed push for a newly hatched federal bill by June. Like the health bill, it might not be too pretty, but the hope is for it growing into a stately bird indeed.
If not a June bill, what? If there is no legislative action done by June, we are most likely left with 1) watching the EPA to see if it will regulate (which if you see below is not favoured by stakeholders), or 2) nothing, except what already exists, which is the voluntary carbon market. In light of global emissions reductions targets, well Uncle Sam, this is really, just not good enough. If not June, when? After June, election fervour will likely roll in, and it won’t be until at least November that action on a new bill would start over again. This would basically leave a delay of a whole year before the US would be able to move again on this issue. Ugh! So, my eyes are now closely on Obama, and my hopes now are for June. What do you think? Will he be able to do it? They said the health care bill would be impossible, so what do you think the chances are for two impossibilities in a row? Leave me a comment and let me know! Well, unless you’re going to be vile and flame me in which case I’ll ignore or delete you. (I like a good disagreement, but not when there are daggers in hand.)
Now, aside from the above, I did glean some other interesting take away points from the Globe session for the keeners out there who like reading more than tiny manageable chunks of information at a time. I have organized them below from a global to regional perspective, focusing on British Columbia, Canada at the end. If you attended the session and got something different from it, or have anything to add, please feel free to do so in the comment section.
- The EU wants OECD-wide carbon trading by 2015 by linking international trading schemes in order to meet global greenhouse gas reduction goals. A lofty goal with the current state of affairs!
- India and China have made good strides recently in energy based trading while western nations have become embroiled in issues
- The Nairobi Framework has emerged as a shining example of the Clean Development Mechanism
- In the US, federal legislation (entailing market mechanisms such as cap-and-trade) is generally seen as the more efficient and preferred way to manage emissions than EPA regulation (The Obama administration, industry and even the EPA agree with this. Wow.)
- There are strong public perception “No”s that are preventing progress on passing legislation in the US which include: 1) We don’t trust “markets”. Remember Enron and the recent recession? It’s those Wall St guys that did that, and cap-and-trade will be the next bubble., 2) Carbon tax is better than carbon trading because we don’t trust markets., 3) Is climate change even real – what about snowmaggedon and my local weather man saying global warming is a scam? 4) Climate change is low priority compared to health care and war in the Middle East. 5) We don’t have time for this, an election is coming. 6) Lobbies who stand to lose with proposed legislation have been very effective in the media and in government.
- Regional programs in North America seem to be working well, like the WCI (Western Climate Initiative), which boasts participation from many states and provinces.
- One of the key challenges of rolling out federal legislation is to make it coherent with regional programs to encourage early adoption of carbon management mechanisms and facilitate a smooth transition to a national scheme.
- One potential solution would be to link regional systems into a national to international mozaic. The challenge is how. The WCI provides one example of a system that links states and provinces with different sectoral strengths fairly effectively.
- Fungibility of offsets is a major issue in linking different trading systems together because, as it stands, not all carbon offsets are created equal.
- Alberta’s GHG regulation has resulted in about $15 million dollars in offsets being generated in the last 3 years, equivalent to about 6 million tonnes of CO2e. Holy Superlatives Batman, that’s a lot of offsets.
- In BC we have both a Carbon Tax (.pdf document about it), which helps to set a price on carbon, and we are also are participating in the Voluntary Carbon Market under the WCI. So far, this has been a good working example of how a carbon tax and market system can work together.
- BC is intent on closely watching cap-and-trade, and if it seems to be working well, they may transfer some emitters covered under the Carbon Tax over to the cap-and-trade system
For more information on the session and speakers, below is the official summary:
Update on North American Carbon Trading Initiatives
Sponsored by the Province of British Columbia
Regionally, Canada and the US continue to develop carbon trading regimes. How might cross-border trading of allowances and offsets work? How will the various schemes operate in an integrated North American economy and what are the implications and opportunities for businesses operating in North America?
Oliver Bussler, Senior Manager, Environmental and Emissions Portfolio, Capital Power Corporation, Edmonton, AB, Canada
It seems not a day goes by that I don’t hear or read something misleading about climate change. It’s hard to keep up with, not only new research, but the rhetoric, debate and bagglegarb out there on this topic.
So, here it is. Yet another blog on climate change. The intent is to clearly inform, discuss, connect and do something to better manage our shared environments–in particular that thin blue line that separates the rock we stand on from the deep dark universe that surrounds us. I hope it will be helpful and not just more hot air.