Photo: Western Climate Initiative still offers hope

By placing a strong price signal on carbon pollution, Canadian provinces could place themselves at the forefront of climate leadership in North America (Credit: Evan Leeson via flickr).

By Ian Bruce

The flexibility of the Western Climate Initiative's cap-and-trade program is its strength and its weakness. On one hand, the coalition of states and provinces participating in the plan to reduce greenhouse gas emissions that contribute to climate change are free to develop their own approaches, including setting the amount of industrial pollution they will respectively reduce. This means that California, for example, has been able to set a weaker reduction target than the leading partner, Quebec. However, on other fronts, including investing in renewable energy, California is leading by far.

It also means that any jurisdiction, including Quebec, could water down its target by exploiting the system's many loopholes. For example, any province or state could weaken the incentive for industry to reduce its pollution by using a lot of offsets, or giving away the emissions quotas to industry for free — which could also lead to windfall profits for large industrial polluters.

But it also allows individual jurisdictions to show leadership by setting a strong target, as Quebec has done, and to disallow or strictly limit the use of offsets and close other loopholes, which Quebec and other provinces and states should do.

California's recent announcement that it will delay requirements for compliance accounting until 2013 appears to be a setback, but it isn't a major one. The state's cap-and-trade program will start in 2012 as planned, and the emissions goals would remain the same for the 2020 target. But emissions reductions would start slower and then increase to reach the greenhouse gas target as 2020 approaches.

So far, the participating Canadian provinces — Quebec and B.C. (with Ontario and Manitoba promising to join, pending the results of their fall elections) — have set more ambitious pollution goals than the U.S. states. We can only hope that leadership by Canada's provincial governments, especially in Quebec, continues and that it spurs others to more ambitious action to ensure the environmental integrity of the system by adopting effective rules and phasing out loopholes.

Regulations to cap and reduce industrial pollution can play a significant role in reducing Canada's and North America's emissions, but success hinges on the environmental integrity of the system. We can reduce the risk of climate change, save lives and protect our communities while transforming our industrial facilities into leaders in energy efficiency and cutting-edge clean technologies if the regulations are well-designed and in place for Jan. 1, 2012.

By placing a strong price signal on carbon pollution, Canadian provinces could place themselves at the forefront of climate leadership in North America, capitalizing on the clean energy economy. Clean energy industries are among the fastest growing sectors in the world with an annual growth rate of 30 percent over the past decade.

Fuelled by rising demand for clean, secure energy sources, investment in clean energy technologies totalled $243 billion worldwide in 2010. The clean energy sector has also been one of the most resilient during the recent global recession as countries around the world have pursued low-carbon infrastructure and clean energy as a primary strategy for economic recovery.

This global trend has created and will continue to create tremendous economic and job opportunities if Quebec, Ontario and B.C. become innovators and developers of solutions to climate change.

Quebec, B.C., Ontario and Manitoba have an opportunity to show international leadership and help steer the world onto a path to overcome climate change, the greatest challenge facing humanity today. Let's hope they seize it.

June 30, 2011

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