North American Climate Accord a Real Possibility

Last week the writer blogged about the inefficiency of our bottom-up approach to the U.S. developments in energy, climate change and the economy. Looks like things are starting to improve somewhat in that regard.

The Canadian Environment Minister, Jim Prentice, confirmed yesterday that among other topics, a Canada-U.S. energy and climate change accord is on the agenda when the Prime Minister meets with the new President next week. Minister Prentice's remarks outlined five key points:

1. Canada and the US already have similiar targets for reducing greenhouse gas emissions;

2. Both countries would likely at some point establish cap and trade systems for meeting their respective emissions reduction goals;

3. The cap and trade systems would, ideally, be linked through a cross-border carbon trading market in which Canadian and American companies which exceed emissions caps could buy carbon credits from one another;

4. The retention of Intensity-based caps, which the Minister reiterated are not mutually exclusive of "hard" caps, would be open to discussion;

5. The costs of carbon cutting would appear on both sides of the border so that neither Canada nor the U.S. would suffer a competitive disadvantage.

The Minister also confirmed that he was unaware of a discussion related to giving special treatment to the oilsands and asserted a much bigger challenge is in the United States, where coal-fired electricity-generating plants spew out 70 times the carbon emissions of Canada's oilsands.

The Minister remarked "one of the challenges that we faced in the past was we had an American administration that was not taking any action on climate change. [I]n that context anything you did as a Canadian government was imposing a competitive burden on Canadian industry and Canadian jobs. That now has all dissipated and we're in an enviable circumstance where we can move together".

Minister Prentice understands the math - to President Obama and his new administration plans to make to use Energy and the Environment to result in economic recovery. The formula for Canada's approach to the issue of Climate Change appears to be going in a similar (although not parallel) direction, particularly with the confirmation that a north american climate accord is so doable. That's good news for Canada and for climate change.

By the way, the U.S. House of Representatives passed the Economic Stimulus Bill on Friday. More about the climate change related contents of that later, but for now, I thought that it was interesting to mention that of the $787 billion in spending, $2 billion was earmarked for carbon capture and storage. The same sum that Alberta alone has set aside for the same thing. Actually, there are a number of similiarities between the spending in that bill and the commitments Canada and its provinces have made. More on that at a later date.