Stonewalled by the federal government of Prime Minister Stephen Harper, Canada’s 10 provinces are moving closer to taking responsibility for 75 percent of forecast reductions in greenhouse gas emissions over the next five years.
Ontario is making a push for carbon pricing and a cap-and-trade system, in the process establishing an unexpected alliance with Quebec, whose flirting over recent decades with separation from Canada has been shelved in favor of what Premier Philippe Couillard describes as a policy of “building bridges with our partners in the federation rather than putting up walls.”
Even more startling is the emergence of Alberta, home to the fastest rising source of carbon emissions from the oil sands, whose newly elected Premier Rachel Notley has signaled she is ready to remove a key barrier to progress.
Her declared intention to participate in national policymaking on energy and the environment was contained in her election victory speech on May 5.
Goal ‘national approach’
Notley said the need is for a “national approach to the environment and to Canada’s energy sector that builds bridges and opens markets, instead of giving us a black eye.”
The “black eye” is the result of Alberta’s determination to fight from its oil sands corner regardless of the international stain it has acquired and that has fueled opposition on a wide front to new crude oil export pipelines through Canada and the United States.
Notley is seen as having a chance to make a credible contribution to and even become a leader on environmental policy without sacrificing thousands of jobs and billions of dollars in revenue in the oil sands.
One of her first jobs is deciding whether to overtake Harper, who has insisted Canada will do no more in tackling oil and gas emissions unless the United States and Asia take action, starting with a bilateral Canada-U.S. agreement on oil and gas regulations and standards.
However, Notley could get help in shaping a strategy if Harper delivers on his promise to announce GHG reductions before a G7 Summit and before December’s United Nations conference in Paris on climate change.
Just when and how far Notley will go in putting together a plan for boosting energy efficiency measures and promoting renewable energy supplies is not clear.
“We need a little time to come up with our own strategy,” she said.
“The question is, how do we bring something into play that also takes into account our role in all of Canada as an economic player? Whatever we design will be within the context of ensuring the sustainability and viability of our energy industry.”
Playing along
Previous Alberta premiers have been content to play along with Harper’s approach while taking credit for introducing a C$15 per metric ton carbon levy that University of Alberta business professor Andrew Leach estimates works out to just C$1.70-C$1.80 per metric ton since it is applies only to emissions beyond an established threshold.
Notley said she is “not a big fan” of that system because it covers only a limited number of GHG producers and is not based on absolute reductions, thus achieving only “minimal impact.”
Amin Asadollahi, oil sands program director for the Pembina Institute environmental research group, agreed the tax has resulted in only a very small net reduction in GHGs because it’s cheaper for the few companies to which it applies to pay the fines or buy offsets rather than lower emissions.
David McLaughlin, a former chief executive officer of the National Roundtable on the Environment and the Economy, said Notley will have little time to move from the poetry of her campaign to the prose of governing as her joint environment and energy desires are put to the test.
Climate-action pact
While operating outside the realm of oil and gas producing regions, Canada’s two largest provinces - Ontario and Quebec - are rapidly building a climate-action pact that would apply to Canada’s industrial heartland.
Making the first speech by a Quebec premier in the Ontario Legislature in more than 50 years, Couillard called on May 11 for the federal government to step up its game in the battle against global warming, warning that the “cost of inaction is even greater” than the price of fighting back.
“We live today in an era that forces us to resist a false choice between economic development and environmental protection. This fight against climate change is a challenge, but it is also an opportunity to develop a 21st-Century economy,” he said.
He said the federal political parties should announce their own plans for tackling global warming before the national election expected this fall.
80% not in policy
However, this butting of heads between federal and provincial jurisdictions misses what many observers regard as the core of the climate change debate: When and how will governments broaden policy to cover the 80 percent of GHG emissions that are not included in existing policy.
“We need a balanced approach,” Leon Zupan, chief operating officer at Enbridge Liquids Pipelines, told an Edmonton panel discussion. “With 80 percent of emissions not being addressed, we cannot solve the world’s problems by just dealing with the 20 percent.
“We may need to do some tweaks, but we need to find a way to address the entire picture. (A new policy) should apply to users, not just the producers,” he said.
Greg Stringham, vice president of oil sands and markets for the Canadian Association of Petroleum Producers, told the same discussion that Alberta’s next move involves setting a carbon levy for more than just large emitters.
Leach said that if Alberta takes that step and does it right will give the province the license to stand on national, continental and international stages because a credible carbon policy would give the province a wider influence over the subject.
Premiers meeting in July
The provincial premiers are to meet in July when they plan to release their energy strategy in advance of the UN summit.
“It makes sense for the provinces to move together on these issues for a whole slew of reasons, including competition issues, the economic health of Canada,” said Sidney Ribaux, executive director of Equiterre, an environmental group that has been discussing a strategy with the Quebec government.
“What we are asking for is a price on carbon, a significant price on carbon,” he said.
The election of Notley might help clear the path to have the 10 premiers and three territorial leaders agree on a roadmap for energy development, which could set emissions reductions targets, apply environmental principles to oil pipeline projects and recommend carbon pricing.
Industry associations including CAPP, the Canadian Energy Pipeline Association and Canadian Manufacturers & Exporters are also playing a role in informal consultations with the provinces.
Alex Ferguson, vice president of policy with CAPP, suggested the provinces may end up establishing their own aspirations, goals and objectives for their own resource development scenarios rather than submitting to a hard and fast legal process.
That is consistent with CAPP’s long-time stance in favor of reducing GHGs on an intensity (or per barrel) basis rather than setting absolute targets, which would undermine the Canadian industry’s goal of tripling oil sands output over the next 15 years.
Navigating between those conflicting objectives may be as tough as any task on Notley’s agenda in her early days in office. But the widely held view is that many or most of those who elected her New Democratic Party expect Alberta to hit the reset button on the environment and introduce a new and daring “climate framework.”
