Lawyers in Canada: Davis LLP - Legal Advisors Since 1892

Eat your greens, and some other stuff

The Globe and Mail ran an interesting article about pre-packaged leafy greens and salad mixes today. The article basically says that along with the veggies you get a high chance of food poisoning. Add the fact that you still have to wash the pre-washed veggies because of high chlorine levels, the toxins leaching from the containers and the impact the packaging has on the nutrient value of the food and pre-packaged salad becomes a bit gloomy.

The article is made to make you think twice about the time saved by buying pre-packaged lettuce and to show you what you get for those time savings. But it also raises an interesting point about the products we consume. Everything from the processing and packaging, to the marketing of the product can impact the quality of the product, which in turn can be highlighted as a value added quality of the product, or glossed over under nice advertising. Many companies are now beginning to realize that there is a demand for goods and services that do not have negative impacts to their consumers hidden away.

This has caused an increase in Corporate Social Responsibility initiatives. It also one of the factors that has driven the voluntary carbon market and is now putting a cost premium on projects that have large carbon footprints while giving an economic incentives to business that do business better than usual. It is also an important reminder that, where you product has hidden 'flaws' you should be proactive about managing those, and where your product is better than the norm, you should do your best to leverage those qualities.

A New Attack on Canada’s Climate Change Plan

Submitted by Daniel Jarvis.

Can the Canadian Federal Court force the Minister of the Environment (“MOE”) to come up with a climate change plan that complies with the Kyoto Protocol (the “Protocol”)? This is the interesting question that arises from a Federal Court Application filed by the Friends of the Earth against the MOE on September 19, 2007.

The Application seeks judicial review of the failure of the MOE to prepare a climate change plan in compliance with the mandatory requirements set out in the Kyoto Protocol Implementation Act (“KPIA”), which received Royal Assent on June 22, 2007. Specifically, the Application seeks a declaration that the Minister has not complied with section 5 of the KPIA, that the Minister’s plan (released on August 21, 2007), A Climate Change Plan for the Purposes of the Kyoto Protocol Implementation Act 2007 (“MOE Plan”), does not meet the legal obligations under section 5, and an order of mandamus requiring the Minister to comply with section 5 by preparing a revised plan that ensures Canada meets its obligations under Article 3.1 of the Protocol.

Section 5(1)(a) of the KPIA provides as follows:

5. (1) Within 60 days after this Act comes into force and not later than May 31 of every year thereafter until 2013, the Minister shall prepare a Climate Change Plan that includes

(a) a description of the measures to be taken to ensure that Canada meets its obligations under Article 3, paragraph 1, of the Kyoto Protocol, including measures respecting

(i) regulated emission limits and performance standards,

(ii) market-based mechanisms such as emissions trading or offsets,

(iii) spending or fiscal measures or incentives,

(iii.1) a just transition for workers affected by greenhouse gas emission reductions, and

(iv) cooperative measures or agreements with provinces, territories or other governments;

The thrust of the legal challenge by the Friends of the Earth is that under the MOEs Plan, Canada’s projected emissions for the period of 2008 to 2012 are 3,779 Mt based on proposed measures, and as such, the MOE Plan does not describe measures taken to ‘ensure’ Canada meets obligations under Article 3.1 of the Protocol. Canada’s “assigned amount” under the Protocol is 6% below 1990 levels, which equates to 2,815 Mt for the period of 2008 to 2012.

The legal challenge is certain to be the focus of much debate, centering not only on Canada’s action on climate change, but also on issues pertaining to the division of executive, legislative and judicial powers.

Two Trillion Yuan of Renewables

Submitted by Daniel Jarvis.

On September 4th, China released an ambitious "Middle and Long-Term Development Plan of Renewable Energies", which pledged to source 10% of China's energy supply from renewables by 2010 and 15% by 2020. The plan was released through the National Development and Reform Commission (NDRC), a macro-economic regulatory department of the State Council, with a mandate to develop national economic strategies .The plan focuses on the development of hydropower, windpower, biomass and solar, with expected capacity to reach 300 million kilowatts (kW) (hydro), 30 million kW (for windpower and biomass each) , and 18 million kW for solar by 2020.The plan is projected to cost China two trillion yuan (US$266.7 billion) during the 2006-2020 period. In the international community this will likely be viewed as a very positive development, considering that China has now moved into the number one position in CO2 emissions, due in large part to sourcing energy needs from coal and from industrialized countries transferring energy-consuming industries to China.

New Carbon Marketplace Established by UN

Submitted by Andrew Lord.

The UNFCCC and URC just launched CDM Bazaar, a free information exchange service that aims to make the Clean Development Mechanism market more efficient. The portal connects CDM market participants (but does not provide an electronic marketplace for actual CER transactions). The site is divided into three major sections.

(1) Sellers area: profiles sellers, describes their current and planned CDM projects, and lists CERs available for purchase;

(2) Buyers area: profiles potential buyers; indicates how many CERs they want to purchase, and lists from what countries, project types and methodologies they would consider buying; and

(3) Service Providers area: offers a directory of carbon market technology and service providers.

Anybody can browse the site, but companies must register (at no cost) to be listed in one of the above areas. At the time of posting, the CDM Bazaar had 35 registered users, the majority of them in the Service Providers area. Hopefully this number will grow quickly.

The CDM Bazaar, which focuses on market participants, complements the existing CDM/JI Pipeline site, which focuses on projects. The CDM Pipeline not only lists projects that have been sent for validation/determination, but also provides links to approved methodologies, Designated Operational Entities, Accredited Independent Entities, and other project-related information.

Ontario releases its 20-year Integrated Power System Plan

Submitted by Andrew Lord.

On August 29, the Ontario Power Authority filed its 20-year Integrated Power System Plan ("IPSP") with the Ontario Energy Board. According to the OPA's press release, the 4,000-page plan is intended to ensure a "reliable, adequate and sustainable long-term electricity supply for the province."

The plan is OPA's response to the government's Supply Mix Directive dated June 13, 2006. That Directive set out the following priorities and goals:

1) Maximize cost effective conservation to reduce demand by 1,350 MW by 2010 and by another 3,600 MW by 2025;

2) Maximize cost effective renewable generation to increase supply by 10,402 MW by 2010 and by 15,700 MW by 2025;

3) Make up remaining baseload requirements with nuclear power but limit installed in-service capacity to 14,000 MW;

4) Phase out coal-fired generation and replace it with committed and planned resources including gas-fired generation; and

5) Use gas-fired generation as needed to meet peaking requirements.

These priorities are in rank order. For example, the plan addresses the goal of maximizing conservation before addressing the goal of maximizing renewable generation. However, the ranking above does not necessarily represent the order in which actual projects will be undertaken. For example, a renewable energy project may be started before a conservation initiative provided that the conservation initiative will eventually be undertaken.

With respect to the controversial issue of nuclear power, the plan provides for the refurbishment of existing stations but expressly excludes the construction of any new nuclear generating capacity. Nuclear power will be used to fill a significant gap (85 TWh by 2027) between the projected baseload demand and the planned capacity from other sources. OPA also considered combined cycle gas turbine generation as a means of filling this gap. However, it concluded that nuclear power was the superior choice.

The plan also addresses Premier McGinty's very public goal of eliminating coal-fired generation by 2014. Taking into account other planned changes, the OPA concluded that there would still be a supply gap to be filled in certain regions after the coal plants were shut down. The plan will fill that gap with the construction of 1,400 MW of gas fired generation near the GTA, North York, and Kitchener-Waterloo-Cambridge-Guelph regions. Simple cycle and combined cycle gas turbines, as well as co-generation, will also be used to meet peaking requirements in the province.

Overarching all of the priorities in the plan is the issue of transmission. The IPSP repeatedly emphasizes that Ontario's transmission infrastructure will have to be upgraded to accommodate the new mix of generating capacity (particularly renewable generation capacity such as wind power, whose intermittent nature presents specific technical challenges for the grid). Upgrading that infrastructure will therefore present some of the earliest opportunities under the IPSP.

The plan also identifies the following objectives as being part of its near-term action plan for 2008 to 2010:

1) Conserving an additional 1,400 MW;

2) Procuring 2,700 MW of additional renewable resources; and

3) Procuring 2,150 MW of gas fired generation for the GTA, North York, and Kitchener-Waterloo-Cambridge-Guelph regions.

The second objective was put into motion two days before the IPSP was released. On August 27, Ontario announced that it intends to procure an additional 2,000 MW of green renewable power. This announcement doubles the McGinty government's renewable generation target to 4,000 MW. The Ontario Power Authority will commence the process for procuring the first 500 MW of additional generation by the end of 2007. All projects under the new directive must be over 10 MW. The directive therefore complements Ontario's ongoing Standard Offer Program under which the government has set fixed prices for electricity purchased from renewable generation projects under 10 MW.

Stay tuned for additional commentary about the IPSP and Ontario's energy future.