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Exploring the Challenges and Opportunities for Establishing a North American Emissions Trading System


Exploring the Challenges and Opportunities for Establishing a ... Director, Climate Change and Energy. IISD. Global Per Capita Emissions ... US Air Quality ... – PowerPoint PPT presentation

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Title: Exploring the Challenges and Opportunities for Establishing a North American Emissions Trading System

Exploring the Challenges and Opportunities for
Establishing a North American Emissions Trading
  • John Drexhage
  • Director, Climate Change and Energy
  • IISD

(No Transcript)
(No Transcript)
Global Per Capita Emissions
Appendix 2.1
GHG Emissions By Province
Appendix 2.1
GHG Emissions By Sector
Appendix 2.2
- 2
Canadas Projected GHG Emissions All talk and
voluntary actions
Business as Usual
2010 Emissions 809 Mt
(1999) 699 Mt
Mt CO2 equivalent
1990 Emissions 607 Mt
BAU Gap 238 Mt 33 above 1990
Kyoto Target 571 Mt 6 below 1990
GHG Emissions By Selected States
Appendix 2.1
A Challenge? Comparison of Oil Sands versus
Conventional Oil Production in Canada
  • Source CAPP, 2007, Canadian Crude Oil Production
    and Supply Forecast 2006 - 2020

Figure 3 US Share of Exports and Imports on the
.with the very notable exception of energy.
  • The United States is Canadas major trade market
    for energy products, accounting for 99 (84.8
    billion) of all Canadian energy exports for 2006
    up from 50 billion in 1990
  • Some with different climate change implications.
  • Canada exported 36.0 billion of natural gas to
    the United States (100). In volume terms, Canada
    accounted for more than 85 of U.S. gas imports
    and had a 16 share of the U.S. market.
  • Electricity exports, mostly sourced from hydro
    represented some 3.1 billion in sales.
  • than others
  • Exports of crude oil were 1 578 000 barrels per
    day in 2005, valued at 29.9 billion. More than
    99 of these exports were U.S.-bound. Canadian
    crude oil held an 11 share of the U.S. market in
    2005 and accounted for more than 16 of U.S.
    crude imports.

Linking Systems
  • Three broad state level/regional actions
  • West Coast Initiative (Targets, etc, still under
    design, but likely absolute with limits on
    international or even inter-regional credits, but
    interest in technology offsets )
  • RGGI (Absolute targets, limits on offsets access)
  • Climate Action Registry (No targets)
  • Provincial Actions
  • BC (absolute), Alberta (intensity), Quebec and
    Manitoba (Kyoto absolute) with Ontario soon to
    come (absolute a shoo in)

Federal Regulatory Framework
  • GHG intensity reductions of 6 per year 2007
  • 2006 baseline with 20 reductions by 2020 and 60
    to 70 by 2050
  • 2020 target equivalent to 150 M tonnes in
    absolute terms
  • Four compliance options emissions reductions,
    Tech Fund, Trading, One-time Early Action Credit

Federal Initiatives (Canada)
  • Conservative Plan
  • Regulatory Framework for Large Emitters
  • Integrated approach on air issues
  • Intensity Based 18 by 2010 2 per annum
    thereafter, and 20 absolute by 2020
  • The four compliance provisions
  • Technology Fund
  • Offsets
  • Credits for Early Action
  • Limited CDM Access for Industry

Federal Regulatory Framework
  • Offsets
  • Climate Change Technology Fund (Perm or
    Temporary, with receding access?)
  • Defn of offsets
  • Max. 10 of intensity target allowed to go to
    certain CDM credits
  • Next step? linking with N.A. ETS (WCI, RGGI)?
  • Explore linking internationally

British Colombia
  • Emissions target of 33 below 2007 levels by 2020
    (10 below 1990 levels)
  • Targets for 2012 and 2016 Long term target for
    2050 in development
  • Set to introduce legislation in late 2007 to
    institute hard cap on emissions, as part of WCI
  • Other actions/interest
  • adoption of tail pipe standards
  • low carbon fuel standards (reduction of at least
    10 in the carbon intensity -from well to wheel-
    of its transportation fuels by 2020
  • B.C. Energy Plan A Vision for Clean Energy
    Leadership (2007) emphasizes renewable energy,
    energy efficiency and CCS

  • Albertans and Climate Change Taking Action
  • reduce GHG emissions intensity by 50 below 1990
    levels by 2020.
  • completed commitments made under the 2002 plan by
    achieving a 15 reduction in emissions intensity
    between 1990 and 2002.
  • Climate Change and Emissions Management Amendment
    Act (2007)
  • Limits GHG emissions intensity for large emitters
  • (gt100,000 t GHG/yr must reduce emissions
    intensity to 12 below facilitys average
    emissions intensity from 2003-2005 by end of
  • New facilities must reduce intensity by 2/yr
    after third year of operation.
  • Reductions may be made via operational
    improvements, the purchase of offsets or
    contributions into a climate change Technology
  • Fund contribution rate is 15/tonne of greenhouse
  • In process of renewing its Climate Change Action
    Plan, anticipating late 2007 release.
  • Provincial offset system in development

  • Saskatchewan Energy and Climate Change Plan
  • Emissions stabilized by 2010
  • Reduce GHG emissions by 32 from 2004 levels by
  • Reduce emissions by 80 from 2004 levels by 2050
  • Proposes local Technology Fund Emissions Offset
    Fund, aiming to ensure that benefits of
    compliance measures taken in province under
    federal regime (via offset purchases or
    Technology Fund contributions) remain within

  • Kyoto and Beyond Manitobas Climate Change
    Action Plan (2002)
  • meet and exceed Kyoto Protocol reduction targets
    (6 below 1990 levels by 2012)
  • Plan currently being updated and expected to
    introduce new legislation in late 2007
  • Establishing an offsets registry with CSA and Cdn
    Climate Exchange
  • Joined the WCI and Climate Registry

  • Ontario Action Plan on Climate Change (2007)
  • relaxes targets originally introduced in
    Ontarios Climate Change Act.
  • Commits to reductions of 6 below 1990 levels by
    2014 (instead of 2012), 15 below 1990 levels by
    2020 (instead of 25) and an 80 reduction from
    1990 levels for 2050.
  • Plans to close its four remaining coal-fired
    power generation plants by 2014, make investments
    in rapid transit, double renewable energy
    generation and improve energy conservation
  • First jurisdiction in North America to introduce
    a Standard Offer Program (also know as feed-in
    tariffs) to reduce barriers to small renewable
    energy generators
  • Supported by Ontarios Renewable Porfolio
    Standards of an additional 5 renewables by 2007
    and 10 by 2010.

  • Quebec and Climate Change a Challenge for the
    Future (2006)
  • Reduction of 6 below 1990 levels by 2012
  • Includes carbon tax involving levies on gasoline,
    diesel fuel, light heating oil and coal,
    representing a levy of about 3 to 3.50 per ton
  • Focuses on public transportation, renewable
    energy generation, energy efficiency including a
    new building code by 2008 by up to 25 and
    regulating vehicle fuel efficiency to California
  • Supported by Using Energy to Build the Quebec of
    Tomorrow Quebec Energy Strategy (2006-2015),
    committing to increasing renewables 4000 MW of
    wind by 2015 and 4500MW of water by 2010)

Prince Edward Island
  • A Climate Change Strategy for Prince Edward
    Island (2005)
  • Reductions to 1990 levels by 2012 and 10 below
    1990 levels by 2020 (NEG/ECP CCAP)
  • 9 recommendations for addressing climate change
    focusing on renewable energy, transportation,
    energy efficiency, building partnerships, coastal
    management and land use planning, forestry, and
    waste management.
  • Supported by Energy Framework and Renewable
    Energy Strategy (2004) and Renewable Energy Act,
    mandating a Renewable Portfolio Standard of 15
    for 2010.

New Brunswick
  • Climate Change Action Plan (2007)
  • Reductions to 1990 levels by 2012 and 10 below
    1990 levels by 2020 (NEG/ECP CCAP)
  • Focuses on demand-side management and renewable
    energy in the electricity sector and improvements
    in public transit, fuel efficiency and
    alternative fuels in the transportation sector.
  • Other components of note include qualifying
    forest management-based offsets under the federal
    regime, improving nuclear power generation and
    consideration of clean coal and CCS technologies.

Nova Scotia
  • Environmental Goals and Sustainable Prosperity
    Act (2007)
  • 10 below 1990 levels by 2020
  • 21 goals and commitments on renewable energy, GHG
    emissions, and sectoral strategies
  • Supported by Renewable Energy Standards
    Regulations (2007) mandating a portfolio of 20
    renewables by 2013

  • Climate Change Action Plan (2005)
  • Reductions to 1990 levels by 2012 and 10 below
    1990 levels by 2020 (NEG/ECP CCAP)
  • 40 action items including energy efficiency, a
    house in order strategy for government, fuel
    efficiency of fishing vessels, research
    initiatives on carbon accounting in forestry
  • An energy plan which will support these actions
    is currently being prepared.

  • Yukon Climate Change Strategy (2006)
  • Builds on existing programs, activities and
    experience to respond to the impacts of climate
  • No specific GHG targets
  • Northwest Territories Greenhouse Gas Strategy
  • Commits to lead through example by adopting a
    target to reduce emissions from its own
    operations to 10 below 2001 levels by the year
  • Commits the territory to establish longer-term
    targets beyond 2011 by undertaking another review
    in 2010 in recognition of an equitable approach
    to Canadas international commitments
  • Nunavut Nunavut Climate Change Strategy (2003)
  • No specific target
  • Commits to identify and monitor climate change
    impacts, and develop ways of adapting to change.

Linkage Issues
  • Canadian provincial and federal actors all
    strongly interested to coordinate with US
  • Not as clear if this has the attention of US
    actors (exception of Schwarznegger?)
  • Clearly led from the top
  • Bureaucrats all scrambling around what does it
    all mean and how to coordinate?
  • Implications for linking with EU ETS?

Provincial Affiliations
  • West Coast Initiative
  • British Columbia and Manitoba members
    Saskatchewan, Ontario and Quebec observers
  • All Eastern Provinces members
  • RGGI
  • All five Eastern provinces are RGGI observers
    Ontario and Quebec have expressed an interest in
  • The Climate Registry
  • British Columbia, Manitoba and Quebec are
    members all provinces have committed to join TCR

Canada-US Air Quality Agreement
  • Example of Canadian US cooperation to address
    transboundary air quality
  • ½ of acid rain in eastern Canada comes from
    American sources, the cooperation of the U.S. was
    needed to reach the reduction targets
  • 1991 Canada-U.S. Air Quality Agreement
  • Both countries agreed to reduce emissions of SO2
    and NOx, the primary precursors to acid rain
  • Expanded cooperative efforts to control
    transboundary ground-level ozone and particulate
    matter (PM), the primary precursors to smog

Linkage Issues
  • Intensity vs. absolute
  • Stringency
  • Timing Provisions
  • Role of offsets
  • What and where
  • Price caps
  • Technology incentives/funds
  • Auctioning vs. Grandfathering
  • Credits for early action
  • Registry reporting
  • State/Provincial Federal Coordination

Broader Areas of Cooperation
  • Areas for progress
  • Continental approach to energy AND climate change
  • Potential for regional carbon trading systems
  • Integrated approach on energy and climate
  • Trade and investment
  • Biofuels and energy subsidization
  • Transportation
  • Vehicular and air
  • Urban planning
  • Post 2012 Supporting a clean energy future
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