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Legal & Regulatory Columns

The American public is losing interest in climate change; are Canadians following in their footsteps?

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Read more...Climate change has been around as an environmental issue since the late 1980s and finally emerged to capture the spotlight in 2007, helped by a combination of climatic, political and media events (including Al Gore’s award-winning documentary, An Inconvenient Truth). Polls showed the public in most parts of the world starting to take this issue seriously and looking to their governments and corporations to make this a priority. However, progress on solutions has been halting, and as the global community gathers in Copenhagen this month many doubt a viable international agreement on reducing greenhouse gas emissions on a global scale can be achieved.

Governments facing difficult economic and political circumstances at home will need a strong backing from their citizens if they are to make significant political commitments on climate change in the international arena. In the United States public support has declined significantly over the past 18 months. A recent survey conducted by the respected Pew Research Center reveals that Americans are less likely than 18 months ago to consider climate change a very serious issue (35%, down 9 percentage points), the lowest level recorded since 2006. Perhaps more important, fewer Americans now believe that climate change is actually happening and the result of human activity (36%, down 11 points), with almost as many endorsing the view that there is not enough evidence to show the earth is in fact warming (33%, up 12 points). Moreover, these latest trends are evident across the political spectrum, with the biggest changes among those who label themselves as neither Democrats nor Republicans, but “Independents.”

These trends may not be much of a surprise when considered in the context of the current economic and political climate in the U.S. Americans are in the midst of the worst recession since the Great Depression, and many are encountering economic hardships wholly unknown in their experience, or their parents’ experience. Further distraction comes from the current push for health care reform which has generated a political firestorm between progressive and conservative interests. And the public dialogue about climate change has itself become increasingly polarized as the voices of the so-called “climate change deniers” have effectively reopened the question of whether climate change is in fact for real. Guardian journalist George Monbiot wrote recently that “climate change denial is spreading like a contagious disease … expanding with astonishing speed.”

What is happening north of the border — are Canadians also losing interest in climate change? The answer is yes and no. The most recent Environics’ Environmental Barometer survey reveals the same downward trend in opinions, but to a lesser degree. The Canadian public today is not as focused on climate change as it was in 2007 and 2008, but they continue to be more likely than Americans to consider it a serious problem (in November 53% said they are extremely or definitely concerned about climate change). Along with Americans, Canadians are also somewhat less likely than before to believe that science has now proved that climate change as real and caused by human activity, but this remains the majority view (56%), compared with only a small minority who question whether climate change is actually taking place (14%).

So it appears that the Canadian public is responding to some of the same influences taking place south of the border, but the impact is much smaller and there remains a stronger public constituency for action on climate change. Canada is weathering the current recession much better than Americans, and the country is not consumed by political battles over health care, social policy or constitutional issues. As well, the rising debate between climate change “warmists” and “coolists” has yet to generate much profile in Canada, as no prominent Canadian voices have yet emerged to credibly challenge the scientific community. Environmental issues historically have been more of a stated priority for Canadians (relative to Americans) because of the country’s climate, culture and social values. 

At the same time, it is important to note that Canadian public concern about climate change is as low as it has ever been. Neither prevailing weather patterns, pronouncements by leading environmentalists, nor coverage of the upcoming international summit in Copenhagen has prompted increased public attention to, or priority on, climate change; public opinion appears to be in a holding pattern. One might characterize the prevailing Canadian public position on climate change as being more activist than the federal government (and provincial governments in places like Alberta), but considerably less so than that of leading environmental groups and climate scientists who are pushing for strong Canadian leadership at home and abroad.

The public constituency for this latter position is neither large enough nor vocal enough to put concrete political pressure on the federal government in Parliament or on the international stage. As a result, when Canada goes to Copenhagen it will likely be able to manage public expectations at home simply by showing up, not standing out from the pack, and tucking itself under the wing of whatever the Americans stand for. But in the longer term, the pressure for Canada to move forward with a credible climate action plan will almost certainly grow, both from the international community and from its own citizens, as the evidence of a changing climate — from disappearing sea ice to spreading drought — makes itself felt.

Keith Neuman ( This e-mail address is being protected from spambots. You need JavaScript enabled to view it ) is Group Vice-President, Public Affairs, for Environics Research Group Ltd.
 

BC continues the renewable energy momentum

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Read more...British Columbia is aggressive in its determination to remain a global leader in clean and renewable energy. This is not surprising, given that a recent PricewaterhouseCoopers study predicts that BC’s independent power sector could inject $26.1 billion into the provincial economy by 2020.  Determined to maximize this economic potential, the BC government recently established a Green Energy Advisory Task Force and a new Cabinet Committee on Climate Action and Clean Energy.

Premier Campbell, in announcing the new task force and committee, stated that “[c]lean energy will be a cornerstone of BC’s climate action plan that will create jobs, support families and generate new economic activity throughout British Columbia”.  He went further, stating that these new entities will help BC develop its resources, maximize its opportunities and establish the province’s potential as the “supplier of choice for clean power”.

The new task force is dedicated to advance BC’s green energy potential and to maximize clean energy opportunities within the province.  And as Premier Campbell eluded above, the task force will also focus on fostering the export of green electrons to Alberta and the United States. The task force must work quickly to meet its January 2010 deadline for providing its recommendations to the new cabinet committee. 

Task Force Groups
The task force groups consist of clean energy experts, energy consultants, renowned climate experts, leading academics, First Nation representatives and environmentalists.  As Chair of one of the task forces, I’ve had the opportunity to experience first-hand the government’s commitment to this area, as well as the high level of interest from business and the community.

Blair Lekstron, Minister of Energy, Mines and Petroleum Resources, announced the committee members of the new task force on November 20, 2009, stating that “[t]he new members of the Green Energy Advisory Task Force are leaders who will help us to turn green energy potential into real economic, environmental and social benefits for British Columbians”.

These groups will report directly to the new cabinet committee, and each is charged with a specific mandate: 
Procurement and Regulatory Reform – focusing on recommending improvements to BC Hydro’s procurement process to enhance clarity, certainty and competitiveness;
  • Export Market Development and Carbon Trading – focusing on maximizing the value of BC’s green-energy attributes in all power sold beyond BC borders, and to ensure that emerging carbon trading regimes treat BC’s green energy exports favourably;
  • Community Engagement and First Nations Partnerships – focusing on ensuring that communities and First Nations see clear economic and employment benefits, as well as input opportunities, regarding project development in their areas;
  • Resource Development – focusing on impediments to and best practices for planning and permitting new projects to ensure sustainable development, and to consider how forestry and less-established clean energy sectors (i.e. solar, tidal and wave) can increase their competitiveness in BC.

The Cabinet Committee
The new cabinet committee will include the Premier, Minister of Energy, Mines and Petroleum Resources Blair Lekstrom and other cabinet ministers whose portfolios are important to the development of clean energy, and existing members of the climate action committee. Additionally, the committee will include the chairs of BC Hydro and the BC Transmission Corporation.

"The task force groups and the new cabinet committee will help us advance our climate action goals to reduce greenhouse gas emissions and build a greener economy that generates well-paying jobs while maintaining high environmental standards for both the permitting process and the operational phase of any project that gets built," said Environment Minister Barry Penner.

Other Recent Developments
Five days before announcing the task forces, the BC government issued a legislative direction to the British Columbia Utilities Commission.  This direction ordered that the BCUC no longer rely on the aging gas-fired Burrard Thermal plant for a supply of firm energy. This direction is not only consistent with the Province’s plans to focus on clean and renewable energy, but BC Hydro estimates that phasing out Burrard Thermal will also save tens of millions of dollars in maintenance and capital costs in the coming decade.

Accelerating the Clean Power Agenda
British Columbia has clearly accelerated its clean power agenda. The Province is dedicated to become electricity self-sufficient by 2016, and will do so by developing green power that creates new economic and employment opportunities. The new task force and cabinet committee will provide expertise and analysis that will help maximize these opportunities, and will foster BC’s emergence as a powerhouse in the global green energy sector. 

Cheryl Slusarchuk is a partner in the Vancouver office of McCarthy Tetrault LLP practicing in the business law and technology groups. She is the president of the B.C. Premier’s Technology Council and serves as Chair of the B.C. Climate Action Team.
 

BC renewable energy regains momentum

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Read more...The British Columbian renewable energy sector is back on the straight-away after a few tight corners over the past few months. First, there was the economic downturn. Then, the British Columbia Utilities Commission (BCUC) decided that it wouldn’t endorse BC Hydro’s 2008 Clean Power Call. 

Despite these setbacks, the provincial government has reiterated that BC’s renewable energy sector will forge ahead as planned.  In a recent speech to the Union of BC Municipalities, Premier Campbell stated that “[BC] will give bioenergy and other clean power producers the certainty that they need to invest literally billions of dollars and create literally thousands more jobs in the province of British Columbia.”

The BCUC put the brakes on renewable power
The economic downturn had the potential to freeze the renewable energy sector in BC. But because BC Hydro initiated the 2008 Clean Power Call before the markets collapsed, it looked like the renewable energy sector would suffer much less than anticipated. At least, that was until the BCUC, the provincial energy regulator, rejected BC Hydro’s 2008 Long Term Acquisition Plan (LTAP) on July 27, 2009.

The BCUC reviews each LTAP application made by BC Hydro. In finding that the 2008 LTAP was not in the public interest, the BCUC made two findings that are particularly troublesome for BC’s renewable energy sector. First, the BCUC did not approve a specific acquisition target for the 2008 Clean Power Call.  BC Hydro was seeking approval to enter into electricity purchase agreements (EPAs) for up to 3,000 GWh/year of new renewable energy generation. 

Second, the BCUC did not agree with BC Hydro’s request to reduce its reliance on the aging, natural gas-fired Burrard Thermal power plant from 6,000 GWh/year to 3,000 GWh/year. Instead, the BCUC decided that Burrard Thermal should be relied on for 5,000 GWh/year for planning purposes. This meant that, from the BCUC’s perspective the 2008 Clean Power Call — and its 2,100 GWh/year net new renewable generation — was unnecessary.

Opponents of the Clean Power Call were quick to declare that the BCUC decision was, in effect, a wholesale rejection of independent power production in British Columbia. Luckily, this is far from the case.   

The BC Government back in the driver’s seat
The BCUC decision clearly irked the provincial government. Billions of dollars of investment were at stake, as were the province’s climate and energy plans. The Minister of Energy, Mines and Petroleum Resources responded first, stating that the government had no plans to increase the use of Burrard Thermal as a result of the BCUC decision. Then, a few weeks later, the Premier addressed the issue in the Speech from the Throne, stating that the BCUC will receive specific direction to ensure the phase out of Burrard Thermal and to act on the BC Energy Plan and Climate Action Plan.

The BCUC’s insistence that BC Hydro increase its reliance on dirty power conflicts with the BC Energy Plan. This Plan calls for clean or renewable electricity generation to continue to account for at least 90 per cent the province’s energy use. The provincial government is pursuing carbon neutral energy generation, and phasing out Burrard Thermal is a critical step in meeting this goal.  

But regardless of continued government support, the 2008 Clean Power Call will be delayed. BC Hydro may still enter EPAs if it thinks prudent to do so, but each project will be subject to individual review by the BCUC. This one-at-a-time review process will necessarily delay the original timeline for the 2008 Clean Power Call. But expect BC Hydro and the government to take steps to minimize any such delays in order to avert any harm to the provincial economy.

Driving the BC Energy Plan forward
The provincial government is holding fast to the BC Energy Plan. The province is moving towards its goal of electricity self-sufficiency by 2016, and is determined that it will do so through clean or renewable generation. In addition to the Clean Power Call, the province has a Standing Offer Program for smaller clean projects that generate up to 10 megawatts of power, and a two-phase Bioenergy Call for Power which focuses on converting biomass into clean, cost-effective and carbon-neutral electricity. 

The government has also awarded $47 million in funding to thirty-four clean energy projects through the Innovative Clean Energy (ICE) Fund. The ICE Fund has invested in a broad range of technologies and sectors, including bioenergy, geothermal, solar and other alternative energy sources. Lastly, the government committed that all new electricity generation projects will have zero net greenhouse gas emissions. 

Climate action remains a political priority. In June 2009, the Premier appointed John Yap to be the Minister of State for Climate Action. The Premier also continues to chair the Cabinet Committee on Climate Action, which brings together key government ministries to make policy related to climate change.

Given the province’s commitment to clean energy and combating climate change, renewable energy generation will continue to move forward in BC. Billions of clean-energy dollars are poised to enter the provincial economy, making it likely that the past few months were nothing more than bumps in the road to BC’s renewable energy future. 

Cheryl Slusarchuk is a partner in the Vancouver office of McCarthy Tetrault LLP practicing in the business law and technology groups. She is the president of the B.C. Premier’s Technology Council and serves as Chair of the B.C. Climate Action Team.
 

The Road to Copenhagen: What does the Canadian public expect?

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Read more...The COP 15 international summit on climate change will be convening in Copenhagen in less than two months. While few would confidently predict the outcome, almost everyone agrees this will be a critical event in determining whether or not it is possible to reach a multi-lateral agreement on a problem that undeniably demands international action. The global commons of CO2, the fact that every country contributes to the problem, and in some way will experience its consequences, makes climate change the first major societal challenge that truly is global in scope.

As countries approach the negotiation table in Copenhagen, each will be searching to find the crucial balance between contributing to a much-needed common solution and looking out for domestic interests back home. This balance will dictate how far each country is prepared to go in supporting a credible multi-lateral plan, and the sum total of these individual decisions will in the end determine whether the negotiations produce a credible plan. Part of the domestic calculus each country must weigh are the opinions and expectations of its citizens. Do the people they think an international agreement is important, how far do they expect their country to go in making this happen, and what might be the political consequences of the outcome?

Let’s consider Canada — do Canadians care about what will take place at these upcoming meetings? Is public pressure likely to be a factor in how the federal government and its domestic stakeholders (provinces, industry) participate in what promises to be tough bargaining sessions in the Danish capital?  The short answer is no, at least in the short term.

Yes, Canadians are certainly aware of the climate change issue, they understand the basics (if only superficially), and most are clearly concerned about the problem. Canadians have expressed concern about climate change for a number of years, peaking in the Spring of 2007 when the issue gained new prominence with the release of Al Gore’s “An Inconvenient Truth” and other signature events. Since that time, the public has remained concerned about climate change, but the intensity of this view has been gradually diminishing. Climate change has lost much of its novelty and scariness, in part because there have yet to be compelling and tangible signals of either significant climate changes or climate impacts that might mobilize public focus and political pressure to act. Today, climate change is in a holding pattern — it has joined the ranks of endemic societal problems that people will talk about and take mostly symbolic actions to demonstrate (to self and others) their personal attentiveness. But there is as yet no critical mass of public pressure for significant changes. In fact it is quite the opposite: There is an underlying resistance to change in the absence of crisis because change is difficult and will always encounter resistance — this is how human societies have always operated since civilization began.

Does this mean there is little public appetite among Canadians for their country to join with the world in a global campaign against climate change?  The answer here is counter-intuitive. Despite the somewhat disconnected view of climate change, Canadians do recognize this to be a serious world-wide problem that requires a global solution. And they want — and expect — their country to be on the right side of the issue and set a good example for the rest of the world.  According to a recent Environics Canadian Environmental Barometer survey, more than half of Canadians believe it is “critically important” to find an international solution to climate change, and a clear majority (two in three) say Canada should sign on to such an agreement even if it may result in the loss of jobs and higher prices for some goods and services. What kind of agreement do Canadians want their country to sign on to?  Most have no clue, and many will not care about the details – they prefer to leave this to the experts and count on them to figure out the appropriate formulas, policies and strategies.

It is not that Canadians are ready to cast aside domestic self interest to support any level of CO2 reduction targets, or endorse restrictions that would undermine key sectors of the economy. But they do realize, and accept, that every country (especially wealthy developed ones like Canada) has a responsibility to the world community. Canadians as a whole will likely to be most comfortable with a negotiated outcome on climate change that falls somewhere between what environmentalists say is necessary and what their opponents believe is appropriate. When the dust finally settles in Copenhagen, Canadians most of all will want to see their country having done its fair share among the community of nations (at a minimum) and demonstrating leadership (if given the opportunity to do so). Key to understanding this mindset is Canada’s multicultural heritage and mix, which makes it among the most outwardly looking and globally connected of nations. 

And what happens if these expectations are not fulfilled, and the Canadian government does not contribute to a successful multi-lateral treaty on climate change? In the short term there will be little if any political consequences as climate change and the environment are largely absent from political agenda in today’s minority Parliament. None of the federal parties can gain political advantage on this issue, and they all know how to say the right things to avoid making it a liability at the polls. In the long run, however, the story that gets told in Copenhagen later this year could well have lasting consequences down the road when the reality of climate change finally “bites.”

Keith Neuman ( This e-mail address is being protected from spambots. You need JavaScript enabled to view it ) is Group Vice-President, Public Affairs, for Environics Research Group Ltd.


 

Turnabout: Are Canadians ready to follow the U.S. lead on climate change action?

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How times have changed. Just a few years ago, Canada was viewed as a leader on the climate change front (Chretien signing the Kyoto Accord, Dion hosting an international conference in Montreal), while the United States was widely castigated as the principal villain in the piece. Now in 2009, U.S. President Barack Obama has made climate change and clean energy cornerstones in his new administration, even in the teeth of the country’s worst economic slump since the Great Depression. Canada meanwhile is seen by many as treading water on climate change policy, and recently has been accused by environmental groups of working behind the scenes to undermine a new international climate change agreement in Copenhagen later this year.

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Why Canadians are not yet ready for environmental pricing reform

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By Keith Neuman, Ph.D.

Environmental pricing reform (or EPR) is the term now used to describe the various types of market mechanisms (e.g. carbon pricing, cap and trade, congestion fees) which are now being given serious attention as the most promising strategy for addressing climate change and other pressing environmental challenges such as water scarcity and traffic congestion. This concept has been around for some time, and is now finally receiving serious attention on the North American policy agenda. Economists have long been making a persuasive case for harnessing market forces to achieve environmental objectives, but only recently has this cause been adopted by major players, such as the Canadian Council of Chief Executives and the National Roundtable on the Environment and Economy. The idea that society puts a monetary price on environmental "goods" and "bads", and then letting market forces do their work (as they do with most other forms of business and consumer behavior) is compelling.

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Carbon trading in North America is now inevitable

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By Cheryl Slusarchuk

The phrase "cap and trade" is largely unfamiliar to most North Americans, but it will soon be well-known at both boardroom tables and kitchen tables. Canadian and U.S. legislators have been contemplating carbon trading, mostly in the form of "cap and trade" regimes, and three regional regimes are in the works, at varying stages of development: the Regional Greenhouse Gas Initiative (RGGI), the Western Climate Initiative (WCI), and the Midwestern Greenhouse Gas Reduction Accord (MGGRA).

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Green economy gains steam

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The U.S. bailout and cap-and-trade program developments demonstrate confidence in the clean tech sector

By Cheryl Slusarchuk

Although environmental concerns are now largely overshadowed by unprecedented volatility in the global economy, U.S. legislators recently demonstrated recognition that the clean technology sector can be used to grow gross domestic product, while developing a secure and sustainable energy sector. Contained in the United State’s new $700-billion Emergency Economic Stabilization Act of 2008 are approximately $18 billion worth of clean technology-related tax incentives.

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The feebate fiasco

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You can’t count on what regulators will do. The ’feebate’ program for the auto industry in last year’s federal budget is a case in point. Not only was it a surprise to the industry, it also did nothing to curb greenhouse gas emissions.

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