Yesterday, the federal government released its new regulatory framework for setting mandatory reduction targets for emissions of greenhouse gases and air pollutants from all major industrial sources including the electricity, oil and gas, forestry, mining, steel and chemical sectors.  The federal government calls its new framework a "middle ground" between industry and environmental concerns.

Key provisions of the new framework include intensity-based targets to reduce greenhouse gas emissions by six percent annually below 2006 levels to a target of 18 percent by 2010, and thereafter, two percent annually below 2006 levels to a target of 26 percent by 2015.  These industry targets, combined with other new initiatives to address emissions from transportation sources and consumer and commercial products, are intended to reduce Canada's total greenhouse gas emissions, relative to 2006 levels, by 20 percent by 2020 and by 60 to 70 percent by 2050.  These goals are in stark contrast to Europe's approach, which proposes to lower greenhouse gas emissions by at least 20 percent below 1990 levels by 2020.

Industry targets may be met by:  in-house reductions; contributions to a capped technology fund until 2017 (with specified decreasing contribution limits); domestic emissions trading; domestic offsets; international trading through the Clean Development Mechanism under the Kyoto Protocol (limited to ten percent of target); and potential linkages with emissions trading systems in the United States and Mexico.

Intensity-based targets will be developed for each sector and up to 15 megatonnes of early action credits for reductions achieved since 1992 will be allocated.  Facilities opened since 2004 will be granted a three-year grace period before they have to meet an emission-intensity reduction target.  Industry targets will be established through regulations and therefore do not require parliamentary approval.  Regulations are expected to be released by spring 2008 and equivalency agreements will be pursued with the provinces.

While the federal government states that it continues to be committed to participating in the United Nations' climate change process, the new framework does not address how Canada, which will not meet its Kyoto targets until well after the Kyoto Protocol's first commitment period (2008-2012), will satisfy Canada's legal obligations under the Kyoto Protocol.

Finally, the new framework will pursue the federal government's "clean air" agenda introduced last fall by establishing absolute targets for key air contaminants such as smog-producing pollutants that are at least as rigorous as those in the United States. 

The foregoing is a summary of a recent development in environmental law.  If you would like additional information about this or any other environmental law topic, please contact Sarah Powell, Alexandria Pike and Katie Goldberg Zwick in the Toronto office at (416) 863-0900 or Michel Pelletier in the Montréal office at (514) 841-6400.

Davies Ward Phillips & Vineberg LLP, with over 235 lawyers, practises nationally and internationally from offices in Toronto, Montréal, New York and an affiliate in Paris and is consistently at the heart of the largest and most complex commercial and financial matters on behalf of its North American and overseas clients.

 

The information and comments herein are for the general information of the reader and are not intended as advice or opinions to be relied upon in relation to any particular circumstance. For particular applications of the law to specific situations, the reader should seek professional advice.