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Eyeing NAFTA carbon scheme
The leaders of the United States, Canada and Mexico are taking North America down the path to a carbon market, gathering some reluctant support in the process.
President Barack Obama, Prime Minister Stephen Harper and President Felipe Calderon agreed at their Guadalajara summit to work on a joint effort that would allow carbon emitters to meet some portion of their targets by purchasing credits in the North American Free Trade Agreement marketplace.
Canada’s Environment Minister Jim Prentice said it was the first time the three leaders had “started to flesh out the elements of a continental approach.”
Both the U.S. and Canada are also vowing to impose national carbon caps that would force industries to either reduce greenhouse gas emissions or buy “offset” credits that are generated by renewable energy plants, reforestation programs and environmentally friendly agricultural practices.
Opening up the vast North American marketplace would give big oil companies and coal-fired utilities access to a deeper pool of credits and help developers to “offset” projects obtaining financing, said Andrei Marcu, an emissions trading advisor with the Calgary-based law firm of Bennett Jones.
First sign from U.S. Elisabeth DeMarco, a lawyer with Macleod Dixon, said the summit declaration was the first sign from the U.S. that it was open to linking emissions trade systems.
Prentice said the two countries are still likely to develop their own systems for overall emissions trading, which could be spelled out this fall when Canada releases a new version of its climate-change plan.
In anticipation of a cap-and-trade system to help the U.S. cut its GHGs by 17 percent of 2005 levels by 2020, three regional U.S. groups are already trading or creating regulated carbon trading markets. (Canada is targeting a 20 percent reduction from 2006 levels.)
Faced with this gathering momentum, Canada’s 10 provincial and three territorial premiers, under extreme public pressure, agreed Aug. 8, that Canada would be “well served to work with the United States on a continental approach” to combating climate change.
Coal an issue Saskatchewan Premier Brad Wall, who hosted the premiers’ conference, said he might warm to a North American cap-and-trade system if that was where the three countries were headed, but he said such a system should not be tailored to better suit coal-reliant jurisdictions.
“Let’s remember that the American plan, supported by the Obama administration, is going to provide significant concessions to coal-based economies,” he said
Less than a year ago, Wall opposed cap-and-trade as a “questionable environmental objective that would actually harm the parts of the Canadian economy (oil and gas production) that are working.”
British Columbia, Manitoba, Quebec and Ontario support cap-and-trade, with B.C. Premier Gordon Campbell arguing Canada stands to be a global leader in climate change if it makes the right moves.
He said Canada should present a “solid, concrete proposal” to the Copenhagen summit in December, when global leaders will try to agree on a post-Kyoto approach to climate change.
—Gary Park
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