Canadian carbon offsets: opportunities and problems

Four years ago, I participated in an Environment Canada consultation on creating an offset system for greenhouse gas reductions. My aim was to see that nuclear power projects qualified under the proposed system. If emitters were able to buy down their emissions with nuclear offsets, this would represent a non-government way of financing nuclear power projects. Nuclear is the only proven non-hydro form of zero-carbon baseload power generation.

Offsets are financial instruments that allow emitting companies to financially support the carbon reduction efforts of others in order to comply with mandatory emission reduction targets. Each offset represents a tonne of carbon dioxide, the benchmark greenhouse gas (GHG), or its equivalent (the actual gas in question could be one of the six recognized GHGs).

The government agreed, after much badgering, that new nuclear plants should qualify. Refurbishments could not. I felt that they should, but you can’t win them all. One out of two ain’t bad.

But that was 2005, and the Liberals were running the federal government. When the Conservatives won power in early 2006, everybody expected they would roundly abandon the environmental policies of their predecessors. That didn’t happen, though given the Conservatives’ position on Stéphane Dion’s Green Shift in the 2008 federal election you could be forgiven for thinking it did.

Few, however, noticed the irony in environment minister Jim Prentice’s announcement the other day that Canada will develop an offset system for carbon reduction credits. Why was it ironic? Because the author of the Green Shift was also the most recent Liberal environment minister. Environment Canada under Stéphane Dion had just completed the offset program consultation when the election was called in late 2005. Looking at the current draft program rules,  I don’t see much of a difference between this draft and the one Dion’s department released in the fall of 2005. Judge for yourself: click here to see the 2005 document.

For an idea of how this system might develop as we go forward, it is worth your while to get to know the Regional Greenhouse Gas Initiative (RGGI). A cap-and-trade system in the U.S. northeast, RGGI is in the process of working out offset rules. Because it contains an offset component, it could be a model for the Canadian system. RGGI currently covers only the power generation sector; its offsets would therefore involve only non-generation projects (see here for more information).

To be fair, the Conservatives have never ruled out the idea of carbon cap and trade—even in the early days of the Harper government. They got out in front of the issue in a big way just after the most recent U.S. election, by offering to work with the new administration in developing a continental cap-and-trade system.

Moreover, they said that 90 percent of Canada’s electricity would come from non-carbon sources by 2020 (see article). Prentice has frequently referred to this goal. So his offset program, though it looks a lot like Dion’s 2005 version, is also not really out of character.

The minister has also taken care to include nuclear when he mentions the kinds of generators that will or should make up Canada’s 2020 fleet.

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11 years ago

The way I see it Canadian bureaucrats dont need to waste their time working out carbon regulations. Canada is small. What we do or dont do here in Canada will not make any difference in terms of global heating. But that does not mean that we do not have a role in the emergency response to global heating. Since we are small we can be listened to by other countries, and our advice can be considered, without creating the appearance of those countries being bullied by a superpower. And we have a lot of high level expertise. We should be able to focus our intellectual resources and work with countries such as India, China, South Africa, and Brazil so that they advance quickly toward cleaner, nuclear, energy harvesting practices. We are try to save the planet, not just Canada alone.