When Ontario signed on to the Western Climate Initiative (WCI) last month, it set in motion a chain of events that could have long term implications for the regulation of greenhouse gas (GHG) emissions in North America.
This collaborative approach by a regional group of US states and Canadian provinces to reduce greenhouse gas emissions and address climate change using market-based mechanisms is perhaps not unprecedented, but with the addition of Quebec and Ontario, WCI now seems to be the leading organization in North American climate change policy action. This is noteworthy because Canada already has a different national approach to the issue, and the US federal government has yet to act, although undoubtedly it will do so quickly after the upcoming US presidential elections. So the table will be set for a complex amalgam of national and sub-national approaches to the same issue.
Although it remains to be seen if the WCI plan and targets are achievable, establishing a consistent approach and set of rules amongst a broader number of jurisdictions appears to be a central goal, and should be capable of generating positive momentum. Previously many of the climate change rules in Canada had been showing signs of increasing fragmentation and an almost unmanageable complexity.
Establishing a system for reducing emissions that cause climate change is a challenging task as it undoubtedly will create winners and losers with all the attendant political difficulties. The big winners will be future generations, who will have no ability to deliver the political support necessary to help proponents today No wonder progress has been slow – and all the more reason for public accolades to go to those who have taken significant steps forward.
The McGuinty government’s decision to join the Western Climate Initiative was a practical approach, chosen from a number of options that were available to the province. The Ontario government had to negotiate around higher automobile emissions standards that would have otherwise been applied by WCI. Ontario’s request was accommodated in light of the province’s commitment to phase out its coal fired generation fleet. That these negotiations succeeded without having to go public is a sign not only of the flexibility of the WCI but of the Ontario government’s determination to craft a workable solution.
The last fifteen years of climate change policy-making in Canada have been marked by more discussion than agreement, and by largely unsatisfying attempts to reconcile divergent principles and approaches. A national approach has been caught up in Canadian regional differences and political gamesmanship. Despite the best efforts of many dedicated individuals, Canadian climate change action proposals have yet to show that they have gained enough momentum to achieve a lasting political solution.
National governments, both in the US and Canada, took inconsistent approaches to managing regional concerns: Some of the time they were trying to recruit lower level governments as standard-bearers of change, while at other times they tried to devise accommodations for one regional government or another, to help them deal with perceived inequities in the rules. The critical question of how to share rule-making with regional and local authorities is still unresolved. Many other countries do not face this problem. With such political complications, process often got more attention than substance, and the pace of progress was slowed.
Even though most of the official responsibilities for managing climate change reside at the national levels in Canada and the US, many of the practical tools operate at the state and provincial levels. As a matter of constitutional law national governments have control over treaties and over trade between states or provinces, whereas the sub-national governments sometimes have more direct control over the actual sources of emissions. States and provinces have a big role in regulating emissions from power plants, for example. The division of powers is somewhat different south of the border, but in both cases, national governments tend to set standards and offer frameworks and incentives, whereas the states and provinces actually develop and operate many of the enforceable protocols, sector by sector. While debate may continue as to whether this is more a result of politics or of the constitutional and legal structures that exist in the two countries, it seems that provincial and state rules often have the ring of specificity, more concrete and with less room for interpretation, than national rules – although it is abundantly clear that both levels of government must be engaged in developing solutions.
Any regime for managing climate change that comes up from the states and provinces is likely to create issues for national governments around co-ordination and pre-emption or comparability between regions. That won’t be easy to resolve. But it may be a lot more achievable than trying to get diverse regions to buy into a national plan that will need to accommodate many variations and concerns. Electricity stakeholders may in fact prefer the certainty that comes from a required GHG system, even if some provinces do not participate. Alberta may have already set the precedent for provincial leadership by implementing its own system well ahead of most others on the continent.
Legislators and regulators in North America are getting ready for a sea change. With a new administration pending in the US, there is no doubt that major new initiatives will be on the table in less than a year. All bets are off on what the outcome will be, but by the same token, this is a crucial time for proponents of one approach or another to show that their system of rules and regulations is a workable model to be carried forward. There is an appetite for practical if ambitious proposals like never before, and a readiness to study and compare detailed propositions.
The political stars seem to be coming into alignment for action on climate change. Republican and Democratic leaders are singing almost the same tune in the US, and Ontario and Quebec have signed an historic accord in Canada. Dalton McGuinty can enjoy some positive press for his energy initiatives, with the backing of environmental groups. Investors may be comforted by knowing that at least some of the rules of procedure are on a track towards becoming clearer. At least some Canadians can be seen as joining a rising international tide with celebrity star-power, as WCI support grows partly thanks to the work of its movie-star advocate Governor Schwarzenegger. And political leaders are able to use a system that starts with voluntary adherence from numerous states and provinces, rather than trying to impose something burdensome from above.
Facing formidable challenges, and with numerous issues to be worked out, the WCI system, including its cap-and-trade model, hopes to facilitate increased clarity, comparability and in general the manageability of North American climate change rules. Of course, WCI still has a number of unresolved aspects each of which will present its own set of issues, and the plan hasn’t been fully tested yet, but the same can be said of all the alternatives. (See related article, “WCI raises special issues for Ontario generators,” page 12.) Suffering from less dissension and benefiting from a more fully defined set of implementation procedures, many may be attracted to WCI simply because in those respects it decreases uncertainty, and the related business risk associated with climate change.
Every system has its weaknesses, and the WCI has many challenges yet to be resolved. Its advocates hope it will prove to be a structure that is able to grow, adapt to new circumstances, build public support, and survive the test of time. For many in the industry, timing is the key question: How soon will the system for managing GHG emissions be solidified and the rules clarified? If WCI can help expedite resolution and improve certainty, so much the better.
— Jake Brooks, Editor