Tuesday, April 08, 2008

Cap-and-trade bill a blank cheque for government

A cap-and-trade system is a good way to reduce greenhouse gas emissions.
But if I were an MLA - pause here for a shared shudder of horror - I couldn't vote for the government's bill setting up the system.
It's vague and so short of details that MLAs of both parties really can't know what they're voting for.
The cap-and-trade system is a key part of the government's bid to reduce greenhouse gas emissions by one-third by 2020.
It's simple enough in principle. The bill gives the cabinet the power to set greenhouse-gas emission caps for economic sectors and individual companies. Each company would get B.C. Allowance Units that added up to their emission limit for a year.
If a company found ways to reduce emissions and come in under its cap, it could sell the unused units to another business that needed them. That encourages companies to invest in cuts; there's a financial benefit.
If companies exceed their caps, they would face penalties. But the bill doesn't say what penalties. The maximum is a $1-million fine or six months in jail, but there's no schedule of fines. That's still to come. That seems a big gap.
It gets more complicated. The bill also creates BC Emission Reduction Units. Companies can apply to an unnamed government employee for credits for reducing or removing greenhouse-gas emissions.
If the employee says it's OK, they can sell those reductions to companies that exceed their caps.
So, for example, I could come up with a plan to get everyone in a new development to heat their homes with solar energy instead of oil or gas. I could apply for reduction units based on the average cut in greenhouse gases each year and sell them to an industry.
How and at what price? The bill doesn't say that either.
This isn't so much legislation as the first draft of an idea.
A very good idea, I hasten to say. The best way to reduce greenhouse gas emissions is to put a price on them. That makes its worthwhile for companies - and individuals - to find ways to reduce their emissions. And the only way to deliver on the promised reduction targets is to limit emissions by the major sources to specific levels.
Nothing else guarantees the targets will be met, and that's what the government has promised.
But even supporters of the principle should be nervous about this legislation. MLAs are being asked to give the cabinet huge power to impose rules that could mean ruin - or riches - for companies and communities in B.C.
The legislation doesn't say how the caps will be allocated, either by sector or by company. Who will set the critical quotas, and on what basis? Will they be auctioned, or awarded by cabinet?
The bill doesn't even say which industries or sectors will or won't be covered.
It all matters. And none of the answers can be found in the legislation.
This is naturally making businesses nervous. What new costs might they face next year? Can they even measure their emissions accurately enough to make the system work? Some worry that the costs will put them at a disadvantage compared to out-of-province competitors.
Again, even those who support the cap-and-trade approach should be troubled by the lack of information.
It doesn't seem that MLAs - of any party - could vote for this bill, because it's impossible to judge the impact on the citizens they represent. It should be important, for example, that Prince George MLAs have at least some information on the likely caps and costs for the forest industry before they decide if they're prepared to support the bill.
The whole issue presents a big challenge for government. Premier Gordon Campbell has proclaimed climate change the biggest issue facing government, but there has been little concrete action.
This bill raises concerns about the government's rush to get the job done.
Footnote: B.C. has also signed on to develop a cap-and-trade system with Manitoba and seven U.S. states, including California, as part of the Western Climate Initiative. But again, there are no details and the government has not explained how the two plans will be integrated.


Anonymous said...

PW not the only one "Paying attention"

'Secrecy' in climate-change law under fire
Jonathan Fowlie, Vancouver Sun - April 09, 2008

"B.C.'s information and privacy commissioner says the government's new climate-change legislation permits too much secrecy and should be changed before it becomes law.

David Loukidelis wrote to Environment Minister Barry Penner and Energy Minister Richard Neufeld last week, saying sections of two pieces of recently introduced legislation represent "a significant encroachment" on freedom of information laws."


"He was concerned about two bills -- one to establish a cap-and-trade system (which involves a limit on carbon dioxide emissions, but allows large emitters to offset some emissions by trading or buying pollution credits) and another to set new environmental requirements for transportation fuels.

In both bills, the government is seeking extra powers to prohibit the release of information supplied by private corporations."

See for yourself: Bill 16 & Bill 18

Bernard von Schulmann said...

You would make a great MLA, but a bad politician