Action to cut greenhouse gas (GHG) emissions in the United States suffered a setback over the weekend, when it emerged that plans to unveil a bipartisan Senate climate and energy bill on Monday had been postponed. Does this spell delays for Canada too? We don't think it should.
Congress is having a hard time getting to the point of being able to pass legislation creating a cap-and-trade system for GHGs — the centrepiece of an effective national climate policy. The House of Representatives succeeded in passing a cap-and-trade bill ("Waxman-Markey") last year, but obtaining sufficient support in the Senate is more challenging.
Canada is in a very different position from the U.S. First, the Government of Canada has had the legislative power to implement cap-and-trade since November 2005, when the Martin government added GHGs to the Canadian Environmental Protection Act (CEPA). Canada can act immediately without going through a lengthy legislative process.
Second, if there is any need to amend CEPA to provide more flexibility[1] in implementing a Canadian cap-and-trade system, there should be no difficulty in securing the support of a clear majority of legislators. For example, the three opposition parties — which form a majority in the House of Commons — recently passed a motion calling on the government to "put in place immediately a national climate change plan that implements economy-wide regulations on greenhouse gas emissions."
The Harper government has repeatedly stated that Canada cannot make decisions about our own version of cap-and-trade until U.S. policy is clear. But there is simply no political or economic justification for such an extraordinary abandonment of Canadian sovereignty. Pembina's economic modelling work indicates that Canada can indeed show leadership by putting a strong price on GHG emissions (via cap-and-trade or a carbon tax) without waiting for the U.S. A few vulnerable industry sectors would require protection — but cap-and-trade can be designed so as to provide that protection.
It's encouraging that, according to a report in yesterday's Globe and Mail, federal Environment Minister Jim Prentice now acknowledges Canada can take action to phase out emissions-intensive coal-fired electricity without waiting for the U.S. On the other hand, his predecessor John Baird showed how ministerial statements of intent (such as Minister Baird's "Turning the Corner" plan) can be abandoned long before reaching the stage of publishing the regulations needed for implementation.
The bottom line is that the Harper government had the legislative power to implement economy-wide GHG regulations the moment it took office in February 2006. More than four years later, using U.S. indecision to continue delaying those regulations just looks like an excuse for inaction.
[1] Such an amendment might be needed, for example, to enable the auctioning of emission allowances, instead of giving them to industries free of charge. Pembina believes that in a fair, transparent system, emitters should have to buy 100% of allowances at auction.
