Undoubtedly, the way of the future for Canadian companies will be to adopt business practices that help reduce their carbon footprint and improve the environment. Some of this will be in response to consumer interest. But the majority of businesses believe it's up to government to create this behavioural shift.

Indeed, 94% of Canadian executives surveyed in the recent PricewaterhouseCoopers (PwC) report Appetite for Change, expect to change the way they do business over the next two to three years because of climate change, with a third of respondents (34%) saying there will be significant changes to their business.

But while more companies are touting their environmental achievements and adding eco-friendly merchandise to their product lines to reap the benefits attained through sustainable business practices, the majority of Canadian companies still prefer to take a backseat approach in the fight against climate change.

Responsibility for Change
The environment is a significant area of concern for the majority of Canadian businesses. According to PwC’s report, the top environmental issues that Canadian companies anticipate will have the greatest impact on the way they do business in the next two to five years are: reduction of emissions (14%), energy efficiency (12%) and climate change/global warming (12%).

Interestingly, while the majority of Canadian companies say climate change is currently an issue for them, they don’t think the onus is on business to invoke widespread change. Instead, the majority (60%) believe the primary responsibility for a behavioural shift against climate change should belong to the government, compared to just 6% who think that business should lead the issue and 24% who indicated the responsibility should be shared between government and business. These results demonstrate that while Canadian executives recognize the environment will increasingly impact their business, they prefer to wait on government to create enough motivation for change before altering their environmental practices.

Moreover, the study also found that the majority of Canadian executives (70%) don’t believe the current government policy for climate change is effective in encouraging businesses to significantly change their environmental behaviour. Even more Canadian respondents (72%) don’t feel the current policy is effective in providing clear and consistent signals to businesses on the need to assess their environmental impact and energy usage.

Incentives to Change
The most effective method called out by the business community for enticing them to reduce their impact on the environment is an approach with a combination of carrot (tax incentives) and stick (regulation, tax charges).

Our study found that as far as current government incentives are concerned, the majority of Canadian businesses believe they aren’t enough to motivate them to change their environmental practices. Moreover, more than half (52%) of Canadian respondents said that meeting the criteria for current tax incentives is too onerous to make them worth applying for.

Instead, an overwhelming majority (90%) of Canadian companies believe the government needs to offer more incentives to support investment in environmentally-beneficial activities, processes and new technologies to help achieve targets on greenhouse gas emissions. 

Time for Change
What’s clear is that there is an appetite for change among our nation’s businesses to adjust their environmental practices, but the majority are waiting on government action before making significant changes.

However, regardless of whose responsibility it is to lead the charge against climate change, the issue will certainly remain a hot topic for both business and government in the immediate future. What’s needed from both parties is a long-term commitment to tackling climate change that may only be sparked by new government tax incentives and strengthened climate change regulations.

For more information or to read the Canadian summary of the Appetite for Change report, please visit: www.pwc.com/ca/appetiteforchange.

Key Findings
Key Canadian findings of the PricewaterhouseCoopers LLP (PwC) report Appetite for Change, a review of international business community attitudes toward climate change, include:

• A majority of 94% of Canadians surveyed expect to change the way they do business over the next 2-3 years, with a third of respondents (34%) saying there will be significant change compared to 25% globally
• Nearly all Canadian respondents (98%) cited regulatory compliance as the biggest influencer over an organization’s approach to environmental issues
• About 60% of Canadians think the government should have the primary responsibility for leading behavioural change, which is significantly higher than the global and US results (44% and 23% respectively)
• Only 6% of Canadians executives believe business should have the primary responsibility for driving change
• 90% of Canadian respondents believe the government needs to offer more tax incentives to support investment in environmentally-beneficial activities, processes and new technologies

Leanne Sereda is the national leader of the Clean Energy group and a partner in the Energy Tax Services group of PricewaterhouseCoopers LLP working in the Calgary office. She has more than 18 years of corporate taxation experience advising energy clients on all tax matters including corporate reorganizations, mergers and acquisitions, divestitures, cross-border financing, and ventures in and out of Canada. In addition, Leanne is an accomplished speaker on energy-related topics for the Canadian Tax Petroleum Society conference, the Small Producers and Explorers Association of Canada, Queen’s Business Law Symposium, and the Canadian Association of Petroleum Landmen. Leanne is the former treasurer of the Nature Conservancy of Canada, Alberta Region, and a former director of the Canadian Petroleum Tax Society.

On May 12, 2010, Senators John Kerry and Joseph Lieberman released the initial draft of a comprehensive climate change and clean energy bill, titled the “American Power Act” (APA). The 987-page draft bill, which has not been formally introduced in the Senate, is the product of months of negotiations led by Sens. Kerry, Lieberman and Republican Lindsey Graham. Graham recently stepped away from the negotiations, in the belief that no meaningful debate would be possible within the current climate of the Gulf of Mexico oil spill and issues of immigration reform.

Despite that, the Kerry-Lieberman bill has garnered tentative praise from some industry stakeholders, including several major electric utilities and the Edison Electric Institute, the leading trade association for investor-owned utilities.

Of interest to Canadian readers will be the greenhouse gas (GHG) emission reduction targets and timetables. These are are almost identical to the Waxman-Markey bill passed by the House in June 2009 (the “American Clean Energy and Security Act”). The cap on GHG emissions would begin a year later than in Waxman-Markey, in 2013, at a level equal to 4.75% below 2005 emission levels, with a 17% reduction below 2005 levels required by 2020, 42% by 2030, and 83% by 2050.  However, the APA differs from Waxman-Markey in many respects and is seen as a compromise.

The Bill imposes a cap-and-trade system only on major emitters, such as coal-fired power plants. Most small and medium-sized industry is exempt.  It is only facilities that produce more than 25,000 tons of carbon pollution annually – about 7,500 factories and power plants – that must comply with reduction targets. The establishment of a federal cap-and-trade system will put an end to regional or state cap-and-trade systems.

The bill also sets a “hard price collar” on carbon prices, which sets a minimum auction reserve price for allowances at $12 per ton in 2013, which would rise at 3% above inflation. The ceiling price is set at $25, increasing at 5% over inflation.

Most observers don’t see the bill passing this term, and there is a varied response to the provisions it sets out. For some sample commentary, check out the Willms & Shier website, a response from the American Council for Affordable and Reliable Energy, and from the U.S. renewables business.
  

As part of its Open Ontario Plan the province is taking steps to make Ontario the leading clean water jurisdiction in North America. The proposed Water Opportunities and Water Conservation Act would, if passed, encourage the creation and export of innovative clean water technology, promote water conservation, attract economic development and create jobs. Among the proposals, the proposed act would:

• Make Ontario a North American leader in developing and selling water technologies and services through the creation of the Water Technology Acceleration Project (TAP) — a technology hub bringing together industry, academics and government to develop the sector and promote it abroad.
• Encourage Ontarians to use water more efficiently by creating and implementing innovative approaches to conserve water.
• Strengthen sustainable municipal water planning by helping them identify and plan for long term infrastructure needs.

The proposed Water Opportunities and Water Conservation Act is posted on the Environmental Registry for public comment until July 16, 2010. (Registry number 010-9940).

On May 18, 2010, Bill 72 (The Water Opportunities and Water Conservation Act, 2010) was introduced and received first reading. The proposed Water Opportunities and Water Conservation Act, 2010 contains a new stand-alone act, the Water Opportunities Act, 2010, as well as schedules containing amendments to existing legislation.

The proposed Water Opportunities Act, 2010 would, if passed, establish a Water Technology Acceleration Project, a non-crown corporation to encourage collaboration and coordination between industry, governments and academia. The Water Technology Acceleration Project would assist in facilitating the creation and growth of globally competitive companies and high value jobs in the water and wastewater sector. This includes increasing the capacity of these sectors to develop, test, demonstrate and commercialize innovative technologies for the treatment and management of water and wastewater and expand business opportunities in Canada and abroad.

The proposed Water Opportunities Act, 2010 also includes a regulation-making authority to require municipal water sustainability plans and allows the Minister of the Environment to establish performance indicators and targets for municipal water, wastewater and stormwater services.

The proposed Act would also facilitate government leadership by providing regulation-making authority to require public agencies to consider water conservation and innovation in their procurement practices. The proposed Act also provides regulation-making authority to require prescribed public agencies to prepare water conservation plans. This includes proposed authority to require public agencies to achieve water conservation targets and consider technologies and services that promote the efficient use of water when making capital investments or purchasing goods and services.

For more information, click here.

British Columbia’s new Clean Energy Act sets the foundation for a new future of electricity self-sufficiency, job creation and reduced greenhouse gas emissions, powered by unprecedented investments in clean, renewable energy across the province.

According to a press release issued jointly by the Office of the Premier, the Ministry of Energy, Mines and Petroleum Resources and BC Hydro, Bill 17 builds upon British Columbia’s unique heritage advantages and wealth of clean, renewable energy resources.

“The new Clean Energy Act opens the way to an exciting new age of economic growth and job creation by unleashing British Columbia’s full potential in clean energy, power smart technologies, environmental stewardship and climate action,” said Premier Gordon Campbell. “It will maximize the value of our public heritage assets for the benefit of British Columbians by forever securing competitive rates and generating new streams of revenue for crucial public services.”

The act advances 16 specific energy objectives by expediting clean energy investments, protecting BC ratepayers, ensuring competitive rates, encouraging conservation, strengthening environmental protection and aggressively promoting regional job creation and First Nations’ involvement in clean electricity development opportunities.

“British Columbia has a proud history of producing clean, reliable electricity at rates that are among the lowest in North America,” said Blair Lekstrom, minister of energy, mines and petroleum resources. “The Clean Energy Act builds on the work of the Green Energy Advisory Task Force with a new statutory framework to encourage new investments and jobs, strengthen BC Hydro and secure British Columbia’s power needs at low rates for generations to come.”

The new Clean Energy Act sets the foundation for three areas of priority:

1. Ensuring electricity self-sufficiency at low rates
The act will strengthen BC’s legislated goal of electricity self-sufficiency by 2016 with a new regulatory framework for long-term electricity planning, bold commitments to clean and renewable electricity generation, streamlined approval processes, and new measures to promote electricity efficiency and conservation.

It also strengthens protection for BC ratepayers with new measures to promote competitive rates and to ensure that all of the benefits from the province’s heritage assets continue to flow to British Columbians. These objectives will be accomplished through long-term planning; public investments and conservation; and new investments in clean, renewable power and energy security. The British Columbia Utilities Commission will continue to ensure appropriate rates are set in advancing government’s energy objectives and long-term resource plans.

2. Harnessing BC’s clean power potential to create jobs in every region
The act will provide BC Hydro and renewable power producers the tools necessary to establish British Columbia as a clean energy powerhouse that enables economic growth and job creation in every region. It will enable BC Hydro to maximize the value of its energy resources for ratepayers and taxpayers. It will provide a new model to secure long-term export power sales to other jurisdictions seeking clean power by partnering with renewable power producers without risk or cost to BC ratepayers.

The act also creates a First Nations Clean Energy Business Fund to provide the opportunity for First Nations to create investment and jobs in renewable power production.

3. Strengthening environmental stewardship and reducing greenhouse gases
The act enshrines in law measures the Province will take to reduce greenhouse gas emissions, help customers save money through conservation and protect the environment.

The Environmental Assessment Act process will be strengthened to specifically provide for assessments of potential cumulative environmental effects. In addition, the development or proposal of energy projects in parks, protected areas and conservancies will be prohibited by law.

The Clean Energy Act builds on the work of the Green Energy Advisory Task Force, appointed in November 2009 to provide insights and recommendations on a comprehensive strategy to put B.C. at the forefront of clean energy development.

CLICK HERE for a summary of the Task Force report.

CLICK HERE for more information on the Clean Energy Act.

In his March 2 budget speech to the B.C. legislature, finance minister Colin Hansen announced $100 million over three years in new climate action and clean energy development funding.

The future of B.C., he said, "is a future where our clean-energy expertise supports both our economy and our environment, and a future where people from around the world increasingly see our province as the best place anywhere to locate their businesses, raise their families and contribute to an even better quality of life."

Although he noted that mining, forestry, oil and gas "are all essential to the health of our economy" and "natural resources have always been the backbone of the B.C. economy", funding to the five resource ministries —  Forests and Range, Agriculture and Lands, Community and Rural Development, Energy, Mines and Petroleum Resources, Transportation and Infrastructure — has been cut by $320 million over three years.

Tax incentives will be offered to business sectors "which have enormous potential to boost our economy and generate jobs," said Hansen, including clean technology and carbon trading.

"In terms of clean technology," he said, "the IFA (International Financial Activity Act) will provide incentives to international players to come to British Columbia…They now employ about 18,000 people and contribute more than $2 billion a year to our economy. The global market for environmental products and services is expected to double by 2020, and we have a chance to capture an even greater share of that market."

"There is also huge growth potential in carbon trading," he said. "Since 2005, when we saw the beginnings of a global cap-and-trade system, carbon transactions worldwide have been valued at well over $100 billion. Analysts say the market could be valued in the trillions when the U.S. government adopts cap-and-trade… and B.C. will be ready."

Steps already taken include legislating targets for emission reductions, implementing a revenue-neutral carbon tax, committing to a carbon-neutral government and public sector, and beginning to develop the province’s clean energy resources. International and regional partnerships including ICAP, the International Carbon Action Partnership, have also been forged, Hansen said.

"No other jurisdiction in North America has done as much," he said, adding that an upcoming new B.C. Clean Energy Act "will advance the government’s commitment to become a world leader in the low-carbon economy of the future."

To date, the existing Innovative Clean Energy Fund "has committed more than $47 million to 34 projects in communities throughout B.C. in areas such as solar, wind, tidal, geothermal, and bio-energy," he added.

A new Green Energy Strategy will also be developed "to harness the potential of British Columbia’s clean energy resources to generate wealth, create new jobs and lower greenhouse gas emissions."

Another $35 million over three years is set aside for the popular LiveSmart BC: Efficiency Incentive Program, which provides financial support to households for energy audits and energy efficiency building retrofits. New program initiatives include residential smart meters and new smart-grid investments.

The power and utilities sector is rarely considered ground zero for green business practices. However, as the political and social climate mandates a more rapid reduction in global greenhouse gas emissions, power and utilities organizations find themselves in the spotlight.

Dealing with this mandate implies more than simply identifying strategies to burn cleaner fuel. Organizations also must consider the role of renewables and nuclear generation in their energy portfolios, enhance plant efficiencies and tackle both technological and infrastructure obsolescence. And they must do this under the cloud of a capital requirement that could exceed $1 trillion over the next five years in the United States alone.

Although some executives may be tempted to take a wait-and-see approach, this could be a mistake. Instead, they must position themselves to take action. As Deloitte detailed in a recent report, Empowering ideas: A look at the top emerging issues in the power and utilities sector, organizations should focus on the following ten areas.

1. The carbon conundrum
Organizations heavily invested in traditional fossil fuels must now reconsider. Policy makers worldwide are setting lofty emission reduction goals, with Canada aiming to reduce emissions to 20% below 2006 levels by 2020. To achieve these goals, companies need to do more than shift to low-carbon and carbon-neutral generation. They also need to continue pushing for commercial-scale carbon capture and storage (CCS) technologies and explore options for participating in global cap and trade markets.

2. Betting on renewables
Energy from renewable sources will have a major part to play in the future of the global power and utilities sector. Canada alone has set a goal to source 90% of its power from non-GHG-emitting sources by 2020. The “bet” for organizations is choosing which renewables will be the best investment. While wind, solar and biofuel power are all possibilities, the profitability of each has yet to be determined, and securing financing for their development and eventual transmission is proving difficult.

3. A nuclear renaissance
Nuclear power is on the brink of a global resurgence, with new players entering the arena and existing participants relicensing plants and investing in new projects. However, problems remain, including those related to standardizing nuclear construction in a world of inconsistent regulatory regimes, and sourcing skilled resources.

4. Turning power into profit
In their efforts to fuel future growth, power and utilities organizations face one overriding challenge: the need to access additional capital. To finance critical investments, companies must find ways to wring further costs out of their operations if they are to enhance revenues. A market-based approach to power plant efficiency will play a key role in helping them achieve this goal.

5. The generation gap
Developed nations’ attempts to limit energy consumption cannot sufficiently counter the developing world’s appetite for electricity. The demand for energy is growing and the industry must be prepared. The Middle East alone is experiencing upwards of a 10% annual increase in its power requirements. While the debate about how to fuel rising global energy needs rages on, one thing is certain: failure to prepare could have dire consequences.

6. Public and private ownership models
Utility ownership looks vastly different around the world. Australia’s power and utilities industry has moved towards privatization, the Middle East industry is government-dominated, and countries like Canada and the United States blend the two models. Regardless of the model chosen, industry participants require creative and measured management to deal with rising commodity prices and capital costs. Building strong relationships between public and private players can contribute to industry sustainability.

7. Technological transformation
In the power and utilities sector, two areas dominate the technological agenda: the need for commercial-scale carbon capture and storage (CCS) technology and the move towards a smart grid. While the adoption of these technologies is currently hampered by a lack of industry standards, both promise to enhance the industry’s environmental performance while improving network management and control. The key will be to secure the necessary financing to drive these visions forward.

8. Labour shortages
Few industries rely on skilled labour more intensely than the power and utilities sector and demand for specialized talent is expected only to grow, especially in regions with low birth rates and aging populations. To attract the necessary talent, organizations must go beyond simply enhancing their recruitment policies. They also must engage in progressive workforce planning to mitigate potential labour gaps in the future.

9. Tackling infrastructure obsolescence
The global power and utilities sector requires heavy capital investment. The International Energy Agency puts that number at $26.3 trillion US between 2007 and 2030, and also estimates that our global economy will require power and utilities organizations to double their base load generation over the next 30 years. While it can seem like a difficult decision to commit enormous funds in a time of such uncertainty, companies can minimize the risks by building strategic flexibility into their generation planning – effectively preparing for a range of possible futures.

10. Managing demand
Although demand for energy continues to grow, the push toward conservation requires organizations to find ways to curb that demand. Organizations have already demonstrated a variety of responses to this challenge – from consumer education and conservation program funding to the issuance of rebates to consumers who reduce energy usage during peak periods. To truly succeed at these efforts, however, power and utilities organizations will need to upgrade existing technology to ensure both they and consumers can properly measure energy usage.

Without question, the issues facing the power and utilities sector are both complex and wide-ranging. Tackling these challenges will take hard work, imagination and a long-term vision. Not tackling them, however, will take a serious toll on organizations – ultimately eroding their competitiveness and their profitability. The need for the power and utilities sector to act is both imperative and immediate. The time for hesitation is past.

To read the full Deloitte report, visit www.deloitte.com/ca/empoweringideas.

Jane Allen is a partner and leader of Deloitte Canada’s power and utilities practice. She can be reached at This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

An agreement dubbed the Copenhagen Accord was drawn up by a limited group of countries late on Friday December 18th. It was formally accepted by the Conference of the Parties to the UN Framework Convention on Climate Change (COP15) during a closing session on Saturday morning. The climate change talks in Copenhagen were rife with disputes between rich and poor countries, and between the world’s biggest carbon polluters — China and the United States. Some might consider the Accord a failure, but it included at least one critical outcome that hadn’t been managed before the talks began.

Leaders from the United States, China, Brazil, India and South Africa sat down together Friday night and drafted the Copenhagen Accord. On Saturday, what they came up with became the outcome of the UN conference on climate change. This marked a change in the normal procedures of the UN Framework Convention on Climate Change (UNFCCC), which generally requires that all parties to the convention hammer out an agreement together.

Importantly, for the first time, leading developing countries — China, India and Brazil — have agreed to rein in emissions as part of an international agreement aimed at battling climate change. This is a big step for the United States and Canada. Canada’s federal government was demanding that such a commitment be made. In the United States, the fact that President Barack Obama was able to sit down and establish this arrangement may give him the necessary ammunition to push a climate change bill through the U.S. Senate — that is an essential in 2010 if businesses in North America wish to see certainty on the issue of a North American cap-and-trade system.

The Copenhagen Accord requires industrial countries to list their individual targets and developing countries to list the actions they will take to cut global warming pollution by specific amounts. Obama called that an "unprecedented breakthrough."

The accord also includes a method for verifying reductions of heat-trapping gases — a key demand for Washington, because China has resisted international efforts to monitor its progress of acting on climate change.

The Accord promises 30 billion dollars in emergency aid in the next three years and a goal of channeling 100 billion dollars a year by 2020 to developing countries with no guarantees.

A draft agreement had leaders committed to a path that would reduce global emissions to half of 1990 levels by 2050, with an 80-per-cent reduction from the developed world. That has been scuttled, but what has been created is a clear understanding that developed and developing countries are willing to create carbon reduction goals together, which may in turn lead to more legislative certainty here in North America. One victim of the Copenhagen summit may be the UN process itself. It was not possible for the 193 countries present to achieve the kind of consensus required. Will it be necessary to draft a similar statement of intent among a handful of countries prior to the next UN meeting so that we are able to make more progress next time? Maybe it’s time for a different approach.

Watch the Green Business website for more discussion of this topic in the coming weeks.

On December 1, 2009 Ontario filed its final Greenhouse Gas Emissions Reporting Regulation (O. Reg. 452/09) under the Environmental Protection Act. The regulation will ensure that an estimated 200 to 300 large emitters of prescribed greenhouse gases (GHGs) will provide regulators detailed GHG emissions data to support a multi-jurisdictional cap-and-trade system. The new regulation comes into force on January 1, 2010.

The final regulation closely resembles the draft posted for public comment on October 7, 2009. View W+SEL’s September/October Newsletter. There have been some minor revisions relating to third party verification, the protection of confidential business information and various technical clarifications. These changes are summarized below.

The regulation applies to refineries, pulp and paper companies, energy generation facilities, chemical producers and metallurgical companies, as classified in 26 sectors. All prescribed facilities will be required to quantify their annual GHG emissions using standardized methods set out in the new Guideline for GHG Emissions Reporting. For the 2010 reporting year, facilities will be permitted to use alternative methods as described in the Guideline or approved by the Ministry of the Environment.  The standardized quantification methods, which have been tailored for each of the 26 sectors, are based on procedures developed by the Western Climate Initiative (WCI) and the U.S. Environmental Protection Agency.

All prescribed facilities must collect emissions data but only those that emit 25,000 tonnes of carbon dioxide equivalent (CO2e) or more per year are subject to the annual reporting requirements. The first emissions report, covering the 2010 calendar year, is due by June 1, 2011. Beginning with the 2011 reporting year, the emissions data must be verified by an accredited third party and a verification report submitted by September 1 of the calendar year following the reporting period. All documentation and data must be retained for at least seven years. The Director can require any prescribed facility that does not file an annual emission report to submit proof that its emissions did not exceed the 25,000 tonne threshold during the relevant reporting period.

In response to a number of comments on the costs and administrative burden associated with third party verification of emissions data, the Ministry says it will continue to look for ways to “streamline” the verification requirements, in accordance with its other cap-and-trade partners. It will also work with accreditation agencies and verification service providers to ensure sufficient capacity is in place when the verification provisions take effect in the 2011 reporting period. 

A number of concerns were also raised about the protection of confidential business information. The Ministry has removed from the final regulation data submission requirements that are “not essential for the design of a future cap-and-trade program or for a high level quality assessment of the reported emissions.”  In addition, much of the sensitive information doesn’t have to be submitted, but can be kept on site by the company for audit by the Ministry. 
The Ministry has also made the following technical changes to the regulation and the reporting Guideline:

• Continuous emissions monitoring is only required when there is already a requirement for such monitors by federal or other provincial regulations
• The definition of facility has been harmonized with the federal reporting requirements
• The frequency of fuel sampling and analysis has been reduced to match the U.S. EPA’s mandatory reporting regulation (the Ministry will also explore the possibility of providing province-wide fuel data that could be used by all regulated facilities) 
• A company can postpone the calibration of flow meters until its next scheduled shutdown 
• The biomass definition has been harmonized with the Green Energy Act, 2009 and the reporting requirements modified to allow for the use of emission factors 
• The deadlines have been extended for confirming a facility is below the reporting threshold or submitting a revised report
• A number of modifications were made to the cement and lime sector requirements to address technical errors and improve harmonization with U.S. requirements. 

 
Paul Manning ( This e-mail address is being protected from spambots. You need JavaScript enabled to view it ) is a Partner and a Certified Specialist in Environmental Law at Willms & Shier Environmental Lawyers LLP
(www.willmsshier.com). This information bulletin is reprinted with permission. 

The past year has appeared to be a watershed in climate action, smart grid development (in some places), green building and clean technology promotion. It’s difficult to say what it will all amount to in another 12 months, but the following five stories are worth keeping a watch on throughout the new year.

1. Ontario introduces the Green Energy Act and a Feed-In Tariff
Local and international environmental and renewable energy groups congratulated the Ontario government in September for four new programs that aim to make the province a global leader in clean, green, renewable energy. The aim of the new regulations is to create thousands of jobs in the new green economy under Ontario's Green Energy Act.

The major components of Ontario's Green Energy Act include:
•    A Feed-In-Tariff (FIT) program, which allows individuals and companies to sell renewable energy — like solar, wind, water, biomass, biogas and landfill gas -- into the grid at set rates.
•    Domestic content requirements, which would ensure at least 25 per cent of wind projects and 50 per cent of solar projects be produced in Ontario — requirements for solar will increase by January 1, 2011 and wind will increase by January 1, 2012.
•    A streamlined approvals process and a service guarantee to bring developers greater certainty.
•    Regulations for setting wind turbines certain distances from houses, roadways and property lines.
•    A new Ontario Renewable Energy Facilitation Office — a one-stop shop to help renewable energy projects get off the ground faster.

While there has been plenty of discussion about what else the Ontario government can do, the FIT and MicroFIT programs are receiving a fair amount of interest and are likely going to change the nature of Ontario's power grid in the long term.

2. LEED goes mainstream – What’s next?
On August 3rd the Canada Green Building Council (CaGBC) launched the second phase of the LEED Canada Initiative: LEED Canada for Existing Buildings: Operations and Maintenance 2009. This was one of many changes to LEED in Canada this year. LEED Canada for New Construction and Major Renovations were updated as well, with new weightings for a variety of elements. Meanwhile, the accreditation process for LEED APs is getting an overhaul as well.

Leading up to its 2nd Annual National Green Building Summit in Montreal on June 9 to 11, the Canada Green Building Council (CaGBC) announced that the 100th building and the first two homes had become LEED Canada certified. During a keynote address at at the Canada Green Building Council's (CaGBC) National Summit in Montreal, Thomas Mueller, President and CEO of the CaGBC, announced that there would be more than 6,000 LEED Accredited Professionals (LEED AP) in Canada by the end of this year. He also noted that the City of Montreal is now making LEED Gold the standard certification for all of their buildings.

These are all clear indications that LEED is going mainstream. The question now is, how can organizations like the CaGBC and BOMA push property owners, managers and developers even further? 20 x ’15 may be one answer.

3. REALPac announces 20 x 15 goal with BOMA and CaGBC
In September, the Real Property Association of Canada (REALPac) announced the 20 by '15 national energy consumption target for office buildings. The goal of REALpac's 20 by '15 initiative is to achieve the target of 20 equivalent kilowatt hours of total energy use per square foot of rentable area per year (20 ekWh/ft(2)/year), in office buildings, by the year 2015. The target is intended as an essential first step in demonstrating substantial, sector-wide emissions reductions and operating cost savings, while taking full advantage of incentives and getting in front of potential regulations. 20 by '15 is one of the most aggressive office building energy performance targets in the world and, if achieved, would make the commercial office building sector in Canada a leader in conservation efforts. It's also notable in that it is a target embraced by REALPac, the Building Owners and Managers Association of Canada (BOMA Canada) and the Canada Green Building Council (CaGBC) — all of the big players in the commercial real estate space.
For video coverage of the launch, click here.

3. American Clean Energy and Security Act passes
On March 31st, Representatives Henry Waxman and Edward Markey released a draft U.S. climate change bill entitled "The American Clean Energy and Security Act of 2009." What could this bill mean to Canadian companies? There was much discussion of the bill and its implications at Insight’s recent 3rd Annual Cap and Trade Forum, held in Toronto. In June the Act passed in the House by a vote of 219 to 212. This was an important step towards creating national cap and trade legislation in the U.S. and establishing ambitious goals for emissions cuts for industry. Specifically, it calls for emissions reductions of 17 per cent (from 2005 levels) by 2020 for large emitters, and 83 per cent by 2050. It also had implications for countries like Canada, in that it included provisions that could affect Canadian companies if we don't adopt a similar cap and trade system. 

On September 30th, U.S. Senators John Kerry (D-MA), Chairman of the Foreign Relations Committee, and Barbara Boxer (D-CA), Chairman of the Committee on Environment and Public Works, introduced the Clean Energy Jobs and American Power Act. The Bill is aimed at creating clean energy jobs, reducing pollution and protecting U.S. security by enhancing domestic energy production. This is the key legislation that could finally create certainty regarding cap and trade in North America. 2010 could be a big year if the Act passes.

4. EPA’s endangerment finding 
After a thorough examination of the scientific evidence and careful consideration of public comments, the U.S. Environmental Protection Agency (EPA) announced in early December that greenhouse gases (GHGs) threaten the public health and welfare of the American people. EPA also stated that GHG emissions from on-road vehicles contribute to that threat. The announcement appeared timed to come on the first day of climate talks in Copenhagen.

EPA’s final findings respond to the 2007 U.S. Supreme Court decision that GHGs fit within the Clean Air Act definition of air pollutants. The findings do not in and of themselves impose any emission reduction requirements but rather allow EPA to finalize the GHG standards proposed earlier this year for new light-duty vehicles as part of the joint rulemaking with the Department of Transportation.

Speaking at the UN climate conference in Copenhagen, Environmental Protection Agency Administrator Lisa Jackson described her agency's decision that greenhouse gases should be regulated as complementary to US legislation — not an effort to supplant the work of Congress.

"This is not an either/or moment. This is a both/and moment," she told.

What this does is increase the methods by which the U.S. can manage GHG emissions.

5. Copenhagen: What will the outcome be?
As I write this, the COP15 climate change talks are still on and there doesn’t seem to be an agreement in sight, although on the final Thursday leaders were being determinedly upbeat. The question is, will such meetings continue to hold any sway or will another approach be necessary? In my conversation in Toronto recently with Mexico City’s Environment Secretary, Martha Delgado Peralta, she suggested that maybe another approach is necessary; that perhaps it would be more effective to have a coalition of the willing who could demonstrate how climate action can create opportunities and advantages for those nations that pursue it – in much the same way cities involved in the Clinton Climate Initiative are encouraging change. It’s worth considering.

The first week and a half of discussions at the climate talks in Copenhagen have been marred by the entrenched positions of various countries (including Canada), perceived slights by developed nations and at least two protest walk-outs by delegates from developing nations. These same stresses are likely to make any sort of agreement in Copenhagen impossible to reach, according to Jonathan Cocker, a Toronto-based Partner with Baker & McKenzie who has been in Copenhagen during the summit.

“My sense is, there is not going to be a deal here that’s going to involve an obligation upon the developing world to adhere to targets,” says Cocker. “That is a non-starter even though most of the G77 probably could agree to such a deal. In principle, they won’t agree. I think this is going to be a failed conference.”

Developing nations are keen to see the provisions of the Kyoto Protocol remain in force because it does not impose any obligations on them. Cocker believes this will continue to be a stumbling block.

“The idea of targets is abhorrent to most of the developing nations,” he explains. “That is going to be a problem. At the same time, among the developing nations, there is obviously a spread with respect to how quickly they are developing. The countries that have been developing more quickly, including the BRIC countries (Brazil, Russia, India and China), say that they are still developing, and therefore there should be no obligation upon them to meet emissions targets either, because it is the industrialized nations’ that have been able to industrialize without any emission targets whatsoever. That’s a familiar refrain.”

Canada’s pariah status
Meantime, Canada continues to be considered a “fossil” among developed nations.

“Canada is something of a pariah here, quite frankly,” says Cocker. “We are number one as what was previously referred to as the “Fossil of the Day” – Canada is notorious for being the most obstructionist in the meetings. We’ve won that award four times already. There’s a chart you can see at the summit that shows us literally off the charts. That’s pretty frustrating. My sense is that Canada has lost its goodwill on this issue, and that most people at the summit are saddened by what Canada has not done, the position that the government has taken. On the science side, we ally ourselves with the Saudi Arabians – the two countries in the world that are still skeptical of the science, which is pretty frustrating. This is not a judgment, but I am just surprised that no other industrialized nation has the same perspective as we have.” 

Asked what he would consider a real win for industry coming out of this meeting, Cocker notes that a cap-and-trade system that would apply to Canada is something that needs to happen.

“That is certainly what we would hope comes out of this,” he says. “Most regulated enterprises would actually do better under a cap-and-trade system than a pure compliance system. The ability to trade is a benefit, and a cost reduction for some of the enterprises that would otherwise simply have to reduce their emissions. We’re conscious here and in Canada that the oil sands probably could not comply with almost any firm target so we think that cap and trade is probably in their interests and ultimately in the interests of most Canadians.”