Tuesday, April 12, 2011

Carbon management and emissions trading

Having just arrived back from the Canadian Institute Carbon Management seminar in Vancouver, it seems clear that there is great uncertainty in Canada and around the world in regard to emissions trading. As many people know The Management and Reduction of Greenhouse Gases Act (the "Act") has passed all three readings in the provincial legislature and is set to receive Royal Assent and enter into force into Saskatchewan shortly. The Act in Saskatchewan will provide for an emissions trading system that roughly follows that in place in Alberta with a similar technology fund, auditing requirements and will import established Alberta protocols. Mining, oil, gas and independent power projects in Saskatchewan are moving forward with their development plans quickly and we are anticipating an increase in the number of large emitters in the future. Given Saskatchewan has nearly 40% of all the cultivated farmland in Canada, there are also opportunities for generation of zero-till offsets in Saskatchewan and potential trade with Alberta.

To my amazement, the emissions trading system in Saskatchewan was not even mentioned by speakers at the Carbon Management seminar and when the matter was raised there seemed to be little familiarity of the proposed Saskatchewan program. One has to wonder if we cannot even share information within Western Canada regarding emissions trading systems what chance the UN Climate Change talks have of accomplishing much in Durban, South Africa this fall? Given the obvious lack of leadership in Canada and at the federal level in the US, many are hopeful California will lead the way but that remains to be seen.

What does this mean for our emissions trading system in Saskatchewan? Like Alberta, we are going to have to go it alone with little or no support from the federal government, Ontario, Quebec or British Columbia. Alberta has been a good neighbour and has agreed to share information and best practices with Saskatchewan, which is certainly appreciated. Saskatchewan is also is taking steps to ensure that we remain basically harmonized with Alberta but can still join the Western Climate Initiative if an opportunity to materializes.

One thing that is certain however, is that drafting and executing the necessary agreements and managing the contracting process will be a challenge for Saskatchewan lawyers both in-house and in private practice who work with the provincial government, aggregators, landowners, mining, oil and gas companies and large emitters such as SaskPower, but it is a challenge I am looking forward to.

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