Update: BC's Cap and Trade Regulations - Consultation Papers Released

Just a quick update on our blog post last week. Today, the Ministry of Environment released two consultation papers in connection with BC's proposed cap and trade legislation under the Greenhouse Gas Reduction (Cap and Trade) Act:

The consultation paper for Cap and Trade Offsets Regulation can be found here (pdf); and
The consultation paper for Emissions Trading Regulation can be found here (pdf).
The backgrounder for Carbon Pricing policy in British Columbia is here (pdf).
The Ministry has a given the public 45 days (to December 6, 2010) to provide comments on the two papers. To do that please go here.
The Ministry is also conducting a webinar on the consultation papers on Monday, October 25 at 11am (we understand that there may be others). Here are the dial-in instructions.

These regulations are especially important to the Province as it continues in it efforts to fight climate change by reducing BC's greenhouse gas emissions by at least 33% below 2007 levels by 2020. 

Coming Soon: BC's Cap and Trade Regulations

British Columbians are eagerly awaiting the release of the Ministry of Environment’s consultation papers on the proposed Cap and Trade Emissions Trading Regulation and the Cap and Trade Offsets Regulation, which were set to be posted on the Ministry’s website in September 2010.  Once the consultation papers are posted a 45 day consultation period will follow where the Ministry will be seeking comments from stakeholders, First Nations and the general public on the proposed regulations.

The proposed regulations will be introduced under the authority of the Greenhouse Gas Reduction (Cap and Trade) Act (the “Cap and Trade Act”) which enables the Province to put into place a cap and trade system, the details of which will be worked out in co-operation with the provincial and state Partners of the Western Climate Initiative (“WCI”).  The WCI recently released its report on the “Design for the WCI Regional Program”, which serves as a guidance document for WCI Partner jurisdictions as they implement cap and trade systems on January 1, 2012. The WCI Partners have committed to reduce regional greenhouse gas (“GHG”) emissions to 15% below 2005 levels by 2020. To achieve this goal, the WCI’s approach involves the use of a flexible, market-based, regional cap and trade program that caps GHG emissions and uses tradable permits. The program is designed to act as an incentive for WCI Partners, companies and inventors to develop renewable and clean energy technologies, as well as reduce dependence on fossil fuels, which will further allow the Province to meet its objectives set out in the Clean Energy Act

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Update: Public Submissions Invited by Green Energy Advisory Task Force

The BC Government announced today that it wants to hear from the public about its ideas on the future of clean and renewable energy in British Columbia.

The Green Energy Advisory Task Force met for the first time over two days at the end of last week and it now invites submissions from the public on any of the four task force groups topics:

  • clean energy procurement and regulatory reform;
  • carbon pricing, trading and clean energy export market development;
  • community engagement and First Nations partnerships; and
  • clean energy resource development.
The public may make submissions directly to the Green Energy Advisory Task Force until December 31.
For more information on how to make a submission please see the Green Energy Advisory Task Force public submissions webpage (click for the link).
These are important topics, each having an impact on the future economic, environmental and community development of the province.  The Province is welcoming the public's input on these topics.

BC's Green Energy Advisory Task Force

Following up on the BC Government's August 2009 throne speech and the Premier's announcement on November 2, 2009, today, the BC Government announced the members of, and the terms of reference for, BC's Green Energy Advisory Task Force. 

Here is the weblink for public submissions, which can be made on any of the four task force topics until December 31.
I am very pleased to have been appointed to be a part of a team that will advance BC's long-term vision for green energy.
Reporting directly to the Cabinet Committee on Climate Action and Clean Energy, the Green Energy Advisory Task Force will comprise of the following 4 advisory task force groups:
  • Green Energy Advisory Task Force on Procurement and Regulatory Reform
    This task force will recommend improvements to BC Hydro’s procurement and regulatory regimes to enhance clarity, certainty and competitiveness in promoting clean and cost-effective power generation; and identify possible improvements to future clean power calls and procurement processes.
  • Green Energy Advisory Task Force on Carbon Pricing, Trading and Export Market Development
    This task force will develop recommendations to advance British Columbia’s interests in any future national or international cap and trade system, and to maximize the value of B.C.’s green-energy attributes in all power generated and distributed within and beyond B.C. borders. The task force will also develop recommendations on carbon-pricing policies and how to integrate these policies with any cap and trade system developed for B.C.
  • Green Energy Advisory Task Force on Community Engagement and First Nations Partnerships
    This task force will develop recommendations to ensure that First Nations and communities see clear benefits from the development of clean and renewable electricity and have a clear opportunity for input in project development in their areas. It will work in partnership with First Nations, not only to respect their constitutional right, but to open up new opportunities for job creation and reflect the best practices in environmental protection.
  • Green Energy Advisory Task Force on Resource Development
    This task force will identify impediments to and best practices for planning and permitting new clean, renewable-electricity generation to ensure that development happens in an environmentally sustainable way. The task force will also consider allocation of forest fibre to support energy development and invite input from solar, tidal, wave and other clean energy sectors to develop strategies to enhance their competitiveness.
BC has tremendous green energy potential and we are pleased that the government is taking steps that will help turn British Columbia's energy potential into real economic, environmental and social benefits for all British Columbians.

Pacific Carbon Trust Makes First Offset Delivery

The Pacific Carbon Trust has made its first delivery of carbon offsets to the B.C. government. The transaction, which consisted of 34,370 tonnes of emission offsets, represents an important landmark in the development of the Trust.

The Trust was created in 2008 as a B.C. crown corporation to facilitate the carbon offset aspect of the government’s environment policy. In particular, the Trust has a mandate to deliver offsets to Provincial Government ministries, all of which will be required to offset their carbon emission by 2010 under the Greenhouse Gas Reductions Targets Act. To date, the Trust has acquired offsets from 15 facilities in B.C. and aims to purchase over 700,000 tonnes of carbon offsets per year by 2011.

In a recent press release, Minister of State for Climate Action John Yap said he felt the Trust has been a success story so far and is helping to deliver on the government’s green economy initiative. Mr. Yap has reason to be excited about the Trust’s accomplishments given that it is delivering carbon offsets in only its first year of operations.

The wider impact of the Trust on B.C.’s green economy is also evident in the success of private offset businesses such as Offsetters. The Trust has purchased over 300,000 carbon offsets from the offset provider to be delivered over 5 years. The Trust also recently entered into an offset contract with Sempa Power Systems. Sempa has created a successful enterprise installing energy efficient hybrid heating systems in hotels and other buildings.

To date, the Pacific Carbon Trust has been an example of the Provincial Government’s ability to stimulate B.C.’s green economy through innovative projects and legislation designed to encourage private initiative. Megawatt will keep you posted on further developments for the Trust and the world of carbon offsets.

Offsetters: Your Official Carbon Offset Provider for the 2010 Vancouver Olympic Games

In a previous post, I discussed the concept of carbon offsets and looked at the Pacific Carbon Trust in particular. The Trust is a new B.C. crown corporation that provides carbon emission offsets to businesses and government ministries. This week, the Megawatt spotlight is on Offsetters Clean Technology Inc. Offsetters is a B.C. based company and one of Canada’s leading offset providers. Notably, Offsetters was recently named the Official Carbon Offset Provider of the Vancouver 2010 Olympic and Paralympic Games.

Offsetters was founded in 2005 by two professors at the University of British Columbia. The company has created numerous carbon offset projects to date, many of which increased the energy efficiency of existing businesses and encouraged the introduction of more efficient energy systems. For example, one offset project was based on the use of a new biomass boiler to heat greenhouses, while another project involved the purchase of a ground-source heat pump system for an extended care facility. Offsetters states that these projects would not have been possible without funds from carbon offset purchasers.

One reason Offsetters focuses on energy efficiency projects, rather than forestry based carbon offsets, is that it claims the carbon reductions from energy efficiency undertakings are more easily verifiable. In particular, a representative from the company suggested that carbon offsets based on tree planting may be less successful because when the trees eventually decompose, they release stored carbon back into the atmosphere. Offsetters insures that all carbon emission reductions from its projects are independently verified by a qualified engineering firm.

In addition to the Vancouver Olympic Organizing Committee, Offsetters has already assembled an impressive list of clients. These include Vancity Capital, Bunting Coady Architects and Avison Young Real Estate Solutions, to name just a few. Offsetters also partners with West Jet and Air France to provide free carbon offsets to airline passengers. Patrons of either company may elect to have the carbon emissions from their flight offset by the airline at no cost to themselves.

Megawatt will keep you posted on new developments in the world of carbon offsets and other climate change solutions.

New Carbon Offset Opportunities from the Pacific Carbon Trust

The British Columbia Government’s Climate Action Plan will soon be providing new opportunities to organizations and entrepreneurs interested in undertaking environmental “carbon offset” projects. Carbon offsets are projects that reduce the amount of carbon in the atmosphere in order to counteract global warming. The economic concept behind carbon offsets is that businesses and organizations purchase “carbon credits” generated by the projects to cancel out their own carbon emissions. Businesses usually purchase carbon credits in order to improve public relations or meet regulatory standards.

The Provincial Government created the Pacific Carbon Trust  as a crown corporation to facilitate the carbon offset aspect of its Green Economy Initiative. In particular, the Trust was created to serve the needs of British Columbia Government ministries, all of which will be required to offset their carbon emission by 2010 under the Greenhouse Gas Reductions Targets Act. The Trust will purchase carbon credits from private suppliers and then sell them to government ministries and businesses.

The Trust recently asked potential carbon offset suppliers to provide information on the kinds of projects they would create and market to the Trust. The Trust expressed particularly strong interest in forestry projects that aim to offset carbon emissions by increasing tree density. All offset projects marketed to the Trust must be based in British Columbia. The Trust plans to purchase carbon credits from offset suppliers by the end of 2009 and will publish a detailed guide on how to submit project proposals to the Trust in July.

Stay tuned to the Megawatt blog for more on the Pacific Carbon Trust and other carbon offset opportunities.  


Carbon Tax, Cap'n Trade and the BC Election

With the BC Provincial election less than a month away, the Government's existing carbon tax has stirred up quite a bit of controversy here.  I won't get too deep into the politics of it, but if you are interested, I recommend that you check out ZeroCarbonCanada, which has some excellent coverage on the carbon tax from an environmentalists perspective.

While it may seem remarkable to see the broad coverage that the BC carbon tax is now receiving, from the recent editorial by the National Post to the New York Times, but it must be understood that BC's carbon tax is seen by many as a test market for the ability of regional governments (ie, Provincial or State) to impose direct climate change legislation, such as a carbon tax, rather than the more indirect cap and trade system.  A carbon tax, because it is so easily understood compared to a cap and trade system, is also the more politically risky of the two. So, if the BC Government is not returned to the legislature on May 12, it will be viewed by many as a failure of its carbon tax legislation and you can be sure it will be a very long time before any government anywhere tries to introduce a carbon tax.  Hence, the BC election is important for many reasons, especially with respect to climate change legislation.

Currently, the BC carbon tax is relatively mild, at $10 per tonne, but it will be increased each year for the next three years, to $30 per tonne on July 1, 2012.  A good start, but not especially significant in terms of lifestyle changing.  I think $200 per tonne would make that happen in a big way. Also, BC's carbon tax is "revenue neutral" meaning, the tax is offset by a reduction in taxes. It is expected to bring in revenues of $1.85 billion over three years. For some real bite, I would like to see the carbon tax revenues earmarked for GHG saving initiatives, like personal solar, home eco-energy retrofits or even the infrastructure required for electric cars.

While the underlying legislation exists in BC for a cap and trade system, it is not yet operating. And without regional cooperation, it would be entirely ineffective for British Columbia to go it alone with the market-based carbon trading system. This process is underway through the Western Climate Initiative, of which British Columbia is a partner.  However, given the complexities of creating a brand new market-based commodity trading system through the myriad of bureaucracies, both north and south of the border, any regional or national cap and trade system would likely not be operating for another 3-5 years. I just can't imagine it getting done any sooner than that.

Politically, it may be easier to advocate cap and trade now, but practically, it is not easy to put this scheme into action. So, right now, the easiest way to encourage people to reduce their carbon use is a carbon tax. Ideally, 100% of the revenues generated by the carbon tax and, later, the cap and trade system in British Columbia, would go to funding research and development, and/or other incentives, for the clean tech and renewable energy industries in the Province. Only then, would there be some real economic (and job creating) benefit for industries which by their very nature are helping to reduce greenhouse gas emissions.  And if that is the case, people just might not mind paying the tax.

Canada-US Climate Change Pact

Well...it didn’t take Canadian Prime Minister Stephen Harper long to reach out to US President-elect Barack Obama. What may or may not be surprising to some is the topic of this first message. As the Globe and Mail reported yesterday, Prime Minister Harper’s recently-elected Conservative government intends seek a climate change agreement with the new US administration.

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Western Climate Initiative

British Columbia has recently joined the Western Climate Initiative (WCI), a collaboration of seven U.S. states and four Canadian provinces that have joined together to reduce greenhouse gas (GHG) emissions in the region through a cap-and-trade system.  The WCI's goal is to reduce GHG emissions in the region to 15% below 2005 levels by 2020. 

The Canadian participants encompass 73% of the Canadian economy, representing 50% of all Canadian greenhouse gas emissions.  When the first phase of the WCI program comes into effect in 2012, approximately 100 BC companies (notably natural gas producers, BC Hydro, cement makers, smelters and pulp and paper mills) will be affected.  These companies will have upper limits on the amount of GHG emissions (25,000 metric tons of annual emissions) that they can emit without having to purchase additional emission credits.

For the initial period, the WCI program will cover emissions from fossil fuel combustion in the production of electricity (including electricity imports, industrial combustion (such as the burning of coal to produce cement) and emissions from other industrial processes.  The WCI participants anticipate expanding the program to include emissions from transportion fuel combustion (i.e. gasoline and diesel) by 2015.