Tag: Carbon Accounting

Ontario Introduces Draft Climate Change Legislation and Supporting Cap & Trade Regulation

To facilitate the implementation of its cap and trade program, Ontario has introduced framework climate change legislation and a supporting cap and trade regulation. The Climate Change Mitigation and Low Carbon Economy Act (the Act) legislates Ontario’s greenhouse gas (GHG) emissions targets, requires the publication of a climate change action plan, and establishes the framework rules for the cap and trade program, as well as the rules for managing the proceeds from the cap and trade program. Ontario has also introduced a draft regulation setting out the details of the cap and trade program, which will cover industries, institutions, electricity generators, and suppliers and distributors of heating fuels that emit 25,000 tonnes of GHG emissions per year or more, as well as suppliers and distributors of transportation fuels that distribute 200 litres of fuel per year or more. The program would also cover entities that import electricity and fuels in to Ontario. Under the cap and trade program, which will come into force on January 1, 2017, 82% of the province’s total GHG emissions will be covered. To create a robust offset credit program in Ontario, a separate offsets regulation will be drafted under the climate change legislation later in 2016.

Overview of the Climate Change Mitigation and Low Carbon Economy Act
The proposed Act looks to:

  • Make Ontario’s greenhouse gas reduction targets legally binding – the following targets have been established: 15% below 1990 levels by 2020, 37% below 1990 levels by 2030 and 80% below 1990 levels by 2050.
  • Formally direct all cap and trade auction proceeds to a new Greenhouse Gas Reduction Account that would fund green projects to reduce emissions.
  • Ensure transparency by requiring an annual public report on funds flowing in and out of the Greenhouse Gas Reduction Account, including a description of funded initiatives and their alignment with climate change action plans.
  • Provide a legal framework for the cap and trade program.
  • Provide a framework for reviewing and increasing targets, as well as establishing additional interim targets.
  • Allow for transitional allowances to large industrial emitters which would be phased out over a period of time.
  • Require the government to prepare and implement a climate change action plan for achieving these targets, with progress reports and a review of the plan at least every five years.

Overview of Draft Cap and Trade Regulation
In connection with the proposed cap and trade program, the Ministry of Environment and Climate Change (MOECC) has posted a regulatory proposal for a cap and trade regulation, which includes an appendix presenting detailed technical information for the distribution of allowances to eligible capped emitters for the first compliance period, details related to early reduction credits, and an overview of complementary amendments for the reporting regulation and incorporated guideline to support implementation of the cap and trade program.
Ontario is planning to set a cap on emissions for each year of the first compliance period that will start in 2017 and last through 2020; the cap would be set based on the emissions that are forecast for each of those four years. The cap would translate into the total number of emissions allowances that would be made available for covered sectors through auctioning and free-of-charge allocation. Under the program, regulated emitters will be required to hold a sufficient number of allowances to cover their annual emissions.
Between 2017 and 2020, the economy-wide cap is expected to decline at a rate of 4.17% each year to meet Ontario’s 2020 emissions reduction target. The heating and transportation fuel sector and industries will face cap declines. However, the sector-specific cap for the electricity generation sector will remain unchanged from year to year in recognition of the emission reductions that the sector has already undertaken with the closure of coal-fired power plants.
In order to provide transitional support for emissions intensive and trade exposed industries, Ontario plans to allocate emissions allowances free of charge to a broad range of industries including cement, lime and steel. This is aimed at reducing the risk of “carbon leakage”, or the relocation of local industries to other jurisdictions with less stringent environmental standards or no carbon pricing policy. Ontario will review the allocation of allowances at the end of the first compliance period in 2020. The coverage of electricity and fuel imports in the program seek to provide a level playing field for Ontario’s electricity generation and fuels sectors. The government has also indicated that it will consider additional actions to prevent carbon leakage, including border carbon adjustments.
To facilitate compliance, covered sectors would also have the option of funding emissions reductions in non-covered sectors, such as agriculture, through the purchase of offset credits. The government will establish the criteria for creating offset credits that are real, permanent and quantifiable. Furthermore, emitters that have voluntarily taken early and verifiable action to reduce GHG emissions would be rewarded through one-time early reduction credits. Smaller emitters with annual emissions of between 10,000 and 25,000 tonnes would have the choice of opting into the cap-and-trade program and have access to the free allocation of allowances.
The cap and trade proposal has been posted for a 45 day public review and comments may be submitted to MOECC by April 10, 2016.

Revised GHG Reporting Guideline
MOECC has also issued a revised Guideline for Greenhouse Gas Emissions Reporting. To support the proposed cap and trade program, MOECC is now proposing to revoke the Greenhouse Gas Emissions Reporting Regulation (O.Reg. 452/09) and replace it with a new greenhouse gas reporting regulation and incorporated Guideline under the Act. Proposed changes will include:

  • Requirements to report production and other process related information;
  • Provisions to allow facilities with emissions between 10,000 and 25,000 tonnes to opt-in;
  • Clarifications on measurement requirements and reporting of biomass types; and
  • Refinements to the Regulation and Guideline to facilitate implementation of the Cap and Trade Regulation.

Canada, US and Mexico sign MOU on Climate Change and Energy Collaboration

On February 12, 2016, the energy minister and energy secretaries from Canada, Mexico and the United States met for the North American Energy Ministers Meeting in Winnipeg, where the parties signed a Memorandum of Understanding on Climate Change and Energy Collaboration. The countries also announced a web platform where North American energy information can be accessed in one place. The MOU represents a step towards a continental energy strategy, under which Canada, Mexico and the US will collaborate and share information in six key areas:

  1. Sharing experience and knowledge in the development of reliable, resilient and low-carbon electricity grids.
  2. Modeling, deploying and accelerating innovation of clean energy technologies, including renewables.
  3. Exchanging information in order to improve energy efficiency for equipment, appliances, industries and buildings, including energy management systems.
  4. Exchanging information and promoting joint action to advance the deployment of carbon capture, use and storage.
  5. Identifying trilateral activities to further climate change adaptation and resilience.
  6. Sharing best practices and seeking methods to reduce emissions from the oil and gas sector, including methane and black carbon.

As noted above, the three countries have announced a web platform for sharing information on energy resources in North America. The North American Cooperation on Energy Information (NACEI) was initiated in 2014 and sought to develop resources for:

  1. comparing, validating, and improving respective energy import and export information;
  2. sharing publicly available geospatial information related to energy infrastructure;
  3. exchanging views and information on projections of cross-border energy flows; and
  4. harmonizing terminology, concepts and definitions of energy products.

With the launch of the NACEI, North American energy information is now available on one platform and includes:

  • Energy Trade Data: Data tables covering traded energy between the three countries, as well as a methodological guide explaining the attributes of each data source. A detailed cross reference of terminology and a common set of conversion factors are also available.
  • North American Energy Maps: A series of maps of energy infrastructure and a multi-layered interactive mapping site are available and will be augmented as additional GIS data is verified.
  • Energy Outlooks: Reports describing and comparing the outlooks for energy trade across the continent.

Further discussions on a continental energy strategy are expected when Prime Minister Justin Trudeau meets with President Barack Obama in March 2016.

Amendments to Ontario’s GHG Reporting Regulation now in Force

In December 2015, the Ontario Ministry of the Environment and Climate Change filed amendments to the Greenhouse Gas Emissions Reporting Regulation (O.Reg. 452/09) that came into force on January 1, 2016. An amended Guideline for Greenhouse Gas Emissions Reporting was published as well. The amendments include:

  • lowering the reporting threshold to 10,000 tonnes carbon dioxide equivalent (CO2e) from the current threshold of 25,000 tonnes per year, while maintaining the requirement to have emissions greater than 25,000 tonnes per year third party verified;
  • dividing the emission sources into those that only need to report and those that require third party verification;
  • clarification on verification to allow for the use of qualified positive, in addition to positive and adverse verification statements;
  • adding petroleum product suppliers and natural gas distributors to the reporting regulation starting in 2016, to support the implementation of a cap and trade program; and
  • adding other sources to the reporting regulation including:
    – equipment used for natural gas transmission, distribution and storage;
    – electricity imports;
    – electricity transmission and distribution;
    – magnesium production; and
    – mobile equipment at facilities (optional reporting only).

These amendments were made to support the implementation of Ontario’s cap and trade program, the design for which is expected to be finalized in spring 2016. As previously announced by the Ontario government, it will also be releasing a detailed five-year action plan in 2016 which will include specific commitments for the province to meet its 2020 emission reduction targets and establish the framework necessary for Ontario to meet its 2030 and 2050 emission reduction targets.

Paris Agreement Heralds New Era for Climate Change Policies

On December 12, 2015, the Paris Agreement was adopted by 195 members of the UN Framework Convention on Climate Change (UNFCCC), which sets out the terms of a global agreement to lower greenhouse (GHG) emissions and limit the impacts of climate change. Unlike the Kyoto Protocol, this is not so much a regulatory tool with one clear pathway of actions and regulations set at one point in time, but rather a framework with a portfolio of directions for different aspects of climate change mitigation instruments developing over time. This portfolio includes a framework of national GHG emission reduction plans, regular reviews, clean development financing as well as market and non-market approaches to reducing emissions. The Paris Agreement is a global instrument that will develop and solidify over time.

The key element at the national government level is the concept of Nationally Determined Contributions (NDCs), a process which relies on national governments to formulate, implement, monitor, report and update their own national reduction targets and strategies to achieve them. At the sub-national government level, technical and financial commitments in the Paris Agreement will help to facilitate climate action at the local level. However, non-state actors (such as companies and non-governmental organizations) also have a key role and are strongly encouraged to make their contributions to enable lower GHG emission solutions. The Paris Agreement will enter into force on the 30th day after the date on which at least 55 parties to the UNFCCC accounting for at least 55% of total global GHG emissions deposit their instruments of ratification, acceptance, approval or accession.

The Paris Agreement consists of 29 articles, with both binding and non-binding commitments. The aim of the Paris Agreement is to strengthen the global response to climate change on a time horizon towards 2030 and one of the key commitments by countries is to hold the increase in global average temperature to well below 2°C above pre-industrial levels, while pursuing efforts to limit the temperature increase to 1.5°C above pre-industrial levels. The Paris Agreement also establishes goals to enhance capacity for climate change adaptation, strengthen resilience and reduce vulnerability to climate change.

While each member nation is required to put forward an NDC, there are no legal requirements for specific national emission reduction targets or actions in the agreement itself beyond the overall global climate change mitigation target. However, certain legally binding commitments have been built into the Paris Agreement. This includes a requirement that countries submit updated plans every five years with increasingly stringent emission reduction targets as part of the NDC, starting in 2020. Countries will also be required to carry out a global stocktake in 2023, and every five years thereafter, to assess their collective progress on emission reductions. Countries will also be required to monitor and report on their national emissions inventory using a common reporting format. In terms of financing, developed countries have committed to mobilizing the financial resources needed to assist developing countries with respect to both mitigation and adaptation.

Even though climate change has been on the global agenda for the past two decades, the Paris Agreement marks a major milestone in global climate change policy, where both developed and developing countries have reached a consensus on taking action and making the necessary investments to move the world towards a low carbon and resilient future. Over the next few months, it will become clear to what extent policy makers from all levels of government will engage with stakeholders to initiate the conversation on what actions will be required at all levels of the economy and government to meet our international climate commitments.

 

Kassel International Dialogue on 100% Renewable Energy 10-11 November 2015

International cooperation and knowledge exchange is essential and sparks innovation. Therefore, for the third time, a side-event at the congress targets an international audience and will take place in English. This year`s international dialogue also follows up on the findings of the Renewable Cities’ Global Learning Forum in Vancouver, May 2015 and marks an important milestone in building a global 100% RE cities and regions network, a project of the Global 100% RE campaign.

International Conference on Local Climate Action (ICCA2015) Oct. 1-2, 2015

Municipalities play a strategic role in addressing climate change. They drive developments and act as role models for successful measures in greenhouse gas emissions reduction. To highlight local potential and achievements and to support mutual know how-transfer on policies and implementation, Germany will host the International Conference on Climate Action (ICCA2015). The conference is organized by the German Federal Ministry for the Environment, Nature Conservation, Building and Society (BMUB), the ministry for the Environment, Energy and Climate Protection of Lower Saxony and the German Institute for Urban Affairs (Difu).

Moving the Discussion Forward: Alberta Environment & Parks releases Climate Change Discussion Document

On August 14, 2015, the Alberta government released a Climate Leadership Discussion Document (Discussion Document) to lay the foundation for ongoing consultations with Albertans on climate change policy. The Discussion Document sets out the challenges the province faces, presents considerations and options for action, and offers questions to spur debate and discussion for stakeholders and members of the public. The Discussion Document is a follow up to the Alberta government’s June 2015 announcement that it was taking steps to achieve real, demonstrable reductions in the province’s greenhouse gas (GHG) emissions by tightening the requirements under the Specified Gas Emitters Regulation and appointing an advisory panel to undertake a comprehensive review of Alberta’s climate change policy.
The Discussion Document sets out the province’s new approach to climate change to:
• serve as an important commitment to protect the health of Albertans and our ecosystem;
• make a significant and meaningful contribution to Canada’s greenhouse gas reduction commitments and the global effort to mitigate climate change;
• ensure the continued strength and competitiveness of the province’s economy in a lower carbon world;
• advance innovation, encourage adoption of new technologies and support more renewable and cleaner sources of energy and conservation;
• acknowledge the interactions and coordinate with other related policy initiatives, including the royalty review, land-use plans, infrastructure planning and investment;
• provide open and transparent monitoring and regular reporting to Albertans on progress toward emissions reductions;
• foster partnerships with municipalities, provinces, territories, the federal government and First Nations and Métis communities; and
• ensure Albertans are engaged and part of the solution.
Following the review process, Alberta’s climate change advisory panel will provide its recommendations and advice to the Minister of Environment and Parks in fall 2015. Stakeholders and members of the public are encouraged to engage in public meetings and taking the online survey.

 

Alberta’s Carbon Price to Increase as the Province Moves Toward Climate Change Policy Renewal

Alberta’s new Premier, Rachel Notley, expects to have a long-term climate change strategy in place for the province before she travels to the Paris Climate Conference (COP21) in December 2015. In taking up the mantle of climate leadership, Alberta’s Minister of Environment and Parks, Shannon Phillips, announced on June 25, 2015 that the government is moving forward with a two-step process for renewing the province’s climate change policy.
The centrepiece of Alberta’s climate change program is the Specified Gas Emitters Regulation (SGER), which came into force in 2007. Under the current regime, Alberta requires any facility emitting 100,000 tons or more of greenhouse gases (GHG) a year to reduce their emissions intensity by 12%. Following Minister Phillips’ announcement, the stringency level is set to increase:
• 15% as of January 1, 2016
• 20% as of January 1, 2017
There are four ways companies can comply:
• by making improvements to their operations;
• using Emission Performance Credit (if a facility reduces its emissions intensity to below its reduction target, it is eligible for an emission performance credit which are used to counteract the emissions of the facility);
• purchasing Alberta-based emission offset credits; and/or
• contributing to the Climate Change and Emissions Management Fund (the Fund).
The price of carbon for regulated entities choosing to pay into the Fund is also scheduled to increase:
• in 2016, $20 for every ton over a facility’s reduction target; and
• in 2017, $30 for every ton over a facility’s reduction target.
In addition to renewing and bolstering the SGER, the province appointed Professor Andrew Leach from the University of Alberta to chair an advisory panel to develop a more ambitious climate change regime in advance of COP21 in December 2015. The advisory panel has a mandate to carry out stakeholder consultations and prepare a discussion paper by the early fall which will inform the development of a new provincial climate change strategy. Indications are that the panel will undertake a comprehensive review and all options will be considered, including a carbon tax and a cap-and-trade scheme which could link with other jurisdictions such as Quebec or California. It is uncertain which aspects, if any, of Alberta’s unique emissions intensity scheme will survive the panel’s review. However, Alberta’s new NDP government seems keen to show that it is willing to commit to a higher carbon price and more stringent emission reduction targets, which will help to lend credibility to future climate change policy measures that it will be introducing in the coming months.

British Columbia joins Sub-National “Under 2 MOU” Climate Change Initiative

On May 19, 2015, British Columbia (BC) joined a new sub-national climate change initiative known as Under 2 MOU. The Under 2 MOU brings together states and regions willing to commit to reducing their greenhouse gas (GHG) emissions and will galvanize action at the Conference of the Parties (COP 21) in Paris this December. The founding signatories, who were present at the May 19 signing ceremony in Sacramento, California, include the following:
• Acre, Brazil
• Baden-Württemberg, Germany
• Baja California, Mexico
• British Columbia, Canada
• California, USA
• Catalonia, Spain
• Jalisco, Mexico
• Ontario, Canada
• Oregon, USA
• Vermont, USA
• Wales, UK
• Washington, USA
The Subnational Global Climate Leadership MOU is nicknamed “Under 2 MOU” in reference to (i) the goal of limiting warming to below 2°c, and (ii) the MOU’s shared goal of limiting greenhouse gas emissions to 2 tons per capita, or 80-95% below 1990 level by 2050. By joining the Under 2 MOU initiative, signatories also commit to establishing midterm targets, increasing energy efficiency and renewable energy, coordinating on a number of issues from transportation to short-lived climate pollutants, and working towards consistent monitoring, reporting, and verification of their emissions. All signatories will submit an appendix to the MOU that will outline their unique set of actions and plans to reach their goals.
The Under 2 MOU originated from a partnership between California and Baden-Württemberg out of the desire to bring together ambitious states and regions willing to make a number of key commitments towards emissions reduction and to help galvanize action at COP 21. Jurisdictions are invited to sign the MOU up to COP 21 in December. Interested jurisdictions are asked to submit a letter expressing their intent to sign on to the MOU and to complete an appendix that outlines the unique set of actions that are in place or planned to reach their emissions reduction targets.
According to the United Nations Development Program (UNDP), 50 to 80% of the mitigation and adaptation actions necessary to tackle climate change will be implemented at the subnational or local levels of governance. Subnational governments are particularly well placed to address climate change for a number of reasons, including:
• They are often responsible for the development and implementation of policies that have the most impact on climate change, including in the following areas: air quality; transportation; energy and energy efficiency; the built environment; natural lands; technology innovation, development, and transfer; and others that have direct implications for greenhouse gas emissions levels.
• Sub-national governments often serve as the laboratories for policy innovations which are then adopted at the national and even international level.
• Sub-national governments provide the critical link in the vertical integration of climate policies between national and local governments.