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Provinces step in

Canada
The Globe and Mail
05/08/2010

The Western Climate Initiative recently unveiled its plan for a cap-and-trade system to reduce carbon emissions, to launch in 2012. A North America-wide system would be preferable, but in the absence of federal leadership, some provinces and states are appropriately starting their own scheme, even if it comes at some risk.

The system is intended to reduce climate-change-causing carbon emissions by 15 per cent from 2007 levels by 2020. California and six other states, comprising 20 per cent of American GDP, and four provinces – Ontario, Quebec, B.C. and Manitoba – say they will take part.

There are dangers in going out with a plan ahead of others. If it becomes too costly to emit pollution in one province or state, an industry could easily move to a neighbour that isn’t part of the WCI. The biggest risk in Canada is a flight of capital to Alberta. But with size comes strength, and together the Canadian participants make up three-quarters of national GDP.

The provinces and states have built in additional protections. Permits for carbon emissions from the electricity sector are likely to be given away, not auctioned off. Fuels are exempt until 2015.

The plan creates some policy certainty for businesses that bristle at regulation but that operate in jurisdictions whose leaders – especially B.C.’s Gordon Campbell and California’s Arnold Schwarzenegger – have been vocal on climate change.

In national capitals, meanwhile, there is no plan. The latest energy bill before Congress shelves any reference to cap-and-trade. Canadian voters implicitly rejected a carbon tax in the last federal election, and under current policy, no national American cap-and-trade system means no Canadian system, either.

Cap-and-trade systems are not cure-alls. The market can fall apart (as it did recently for acid rain). The allocation of allowances can lead to corruption, or can fail to actually stem emissions. But the WCI, even if it has flaws, forms a basis for study, improving whatever continental policy ultimately emerges.

A patchwork can’t make up for a continental approach. B.C. will soon have its own carbon tax, a cap-and-trade system, a federal regulatory regime and provincial regulations, all targeting carbon emissions. With different rules across provinces, Canada’s economic union can only be weakened.

At some point, some rationalization will be needed. The Canadian participants in the WCI have a platform, at next week’s Council of the Federation meeting, to encourage other provinces to join. With the addition of more players to the same emission-fighting regime, the system can get better.

El contenido de las noticias que se presentan en esta sección es responsabilidad directa de las agencias emisoras de noticias y no necesariamente reflejan la posición del Gobierno de México en este u otros temas relacionados.

    

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