Davis LLP - Climate Change Law Practice Group Blog

B.C. Out to Top Ontario as Canada's Leading Clean Energy Destination

Thu, 11 Mar 2010 12:29:00 EST

The Globe and Mail reported yesterday that B.C.'s quest for clean energy investment is going to be directly headed up by Premier Gordon Campbell. According to the report, "Ontario's new energy pricing strategy has left B.C. behind, with new contracts expected to be rolled out in the coming weeks under its "feed-in tariff" policy guaranteeing prices and long-term contracts for green power.

B.C.'s budget, which was introduced last week, establishes a three-year, $100-million clean energy fund to support biofuel production and other forms of low-carbon electricity generation. B.C. has vast hectares of forest which have been devastated by the mountain pine beetle. The Government intends, through the introduction of its Clean Energy Act to exploit these forests as a bioenergy alternative. I mean, when life hands you lemons, you may as well make lemonade. That's what B.C. plans to do.

B.C., along with its neighbour Alberta, are beginning to make subtle shifts away from a climate change agenda to one which signals that the provinces are open for clean and green energy initiatives. B.C. for its part, has thrown down the proverbial gauntlet when it comes to clean energy. The Premier remarked: "There is not a jurisdiction that won't try to win the clean-energy race...[t]he real advantage we have is incredible clean, low-carbon resources".

According to the Globe, later this week "BC Hydro is expected to announce a series of new clean-energy contracts designed to leverage more than $3-billion in investment. The purchase agreements are slated to produce up to 5,000 gigawatt hours per year to help B.C. become self-sufficient for its electricity needs". Because B.C. does not generate enough power to meet its needs, those in the power game see B.C. as a strategic place to invest.

The article concludes "Don Roberts, research analyst with CIBC World Markets Inc., said Mr. McGuinty has set the benchmark for investors with Ontario's new long-term price guarantees.

"The feed-in-tariff program is by far the most generous in North America, and in some cases in the world," he said. Mr. Roberts doesn't expect B.C. will be able to match those subsidized rates, but he said there are changes the province can make to regain competitiveness.

BC Hydro will have to provide long-term commitments on energy pricing, and the province needs to lower the cost of extracting pine-beetle-killed timber from the forests to make bioenergy more viable, he said".

While Alberta's emissions profile is vastly different from that of B.C. and Ontario, Alberta intends to be a leader in the development of clean energy technology. The February 4, 2010 Speech from the Throne, indicates:

Energy development is a partnership between Albertans, who own the resources, and industry, which develops them on Alberta's behalf. It's a partnership that has yielded tremendous benefits in economic activity that touches every corner of our province...[Alberta] is committed to ensureing that this industry remains vibrant, continues to attract investment and create new technologies...As a result of the international agreement in Copenhagen, we will work with the federal government to reach a thoughtful, continental approach to controlling greenhouse gas emissions - one that spurs Alberta-based investment in new technologies and the next generation economy. In addition to announcements late last year with respect to the $2 billion CCS fund, Alberta's climate change and emissions management fund, administered by the CCEMC, will be used to leverage investments in clean and green technologies. These investments will help secure Alberta's position in the clean energy future of Canada.

With major initiatives in Alberta, B.C. and Ontario, 2010 is shaping up to showcase Canada as a "clean energy superpower".

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BC Ministry site offers update and clarifications on BC' new Renewable and Low Carbon Fuel Requirements Regulation

Tue, 09 Mar 2010 14:36:00 EST

Submitted by Grant Boyle

The Renewable Energy Development Branch of the British Columbia Ministry of Energy, Mines and Petroleum Resources launched a new information page on BC's new Renewable and Low Carbon Fuel Requirements Regulation, which is now in force and discussed in a earlier posting.

The web page contains a questions and answers section for suppliers and an Information Bulletin meant to clarify who subject to the new regulation.

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Copenhagen Accord or Bali Action Plan? Next Steps for UNFCCC Bonn talks in April unclear.

Mon, 01 Mar 2010 19:59:00 EST

Submitted by Grant Boyle

Climate talks in 2010 might get bogged down over the role of the Copenhagen Accord - with the US on one side and the EU and major developing countries on the other.

Last week the UN announced the 9th Session of the Ad Hoc Working Group on Long Term Cooperative Action (AWG LCA) under the UNFCCC will take place in Bonn, Germany from 9-11 April 2010. This is the negotiating group of the UN under which a successor to the Kyoto Protocol has been discussed over the past two years and which produced a series of thematic decisions at its 8th session at COP 15 in Copenhagen.

Binding legal outcome in Mexico?

Leading up to the recent formal announcement of the Bonn talks, a number of parties made submissions to the UNFCCC with respect to the AWG LCA's work programme for 2010. Notably, the US indicted its support for a legally binding outcome in Mexico "provided that the legally binding elements in an otherwise acceptable agreement would apply in a symmetrical manner to all major economies."

Copenhagen Accord as starting point?

The US highlighted the importance of the Copenhagen Accord as the "basis for an agreed outcome in Mexico", submitting that "the Copenhagen Accord is expressly operational and calls for work to be carried out in a number of areas that should be launched without delay," including: Mitigation, Transparency, Long-term Temperature Goal and Review, REDD-Plus, Adaptation, Finance/ Copenhagen Green Climate Fund and Technology.

However, not surprisingly, submissions from other major economies indicate a lack of consensus on the role of the Copenhagen Accord as the basis for new talks. The BASIC countries (Brazil, South Africa, India, China ) appear to favour the two-track approach set in motion at Bali in 2007 (the AWG LCA and the Ad Hoc Working Group on Further Commitments under the Kyoto Protocol (AWG-KP), notwithstanding their subscription to the Copenhagen Accord.

In its submission, China called for the AWG LCA Chair's text to remain on the table as the "only legitimate basis for further negotiations under the AWG-LCA". China said the "political agreement in the Copenhagen Accord may be considered and where appropriate, be translated into texts that can be incorporated in the negotiating text of the AWG-LCA."

India made a similar submission, saying the "political understanding among the participants as reflected in the Copenhagen Accord should facilitate the two-track process of negotiations under the Long Term Cooperative Action and the Kyoto Protocol and lead to a successful conclusion of ongoing negotiations in Mexico."

In addition, the EU, which was largely left out of the last minute negotiation of the Copenhagen Accord, also emphasizes the two-track approach that pre-dated Copenhagen. Its submission reads:

"As agreed in Copenhagen, both AWG-KP and AWG-LCA should continue their work in a comprehensive and balanced manner and any future meeting should bear in mind the need to maintain a coherent approach between the Convention and the Kyoto Protocol. Both tracks should continue working in full negotiating mode to deliver a substantive and coherent outcome in Mexico at the end of this year.."

Not surprisingly, the US submission makes no mention of the AWG-KP. With respect to the AWG-LCA the US noted "that LCA texts have been vehicles for facilitating consensus on key issues, and their contents do not reflect specific agreements or understandings in the negotiating process. And, significantly, it was not agreed that the LCA texts would be the basis of any future negotiation."

In what appears to be a direct response to the BASIC countries, the US submission goes on to say:

"Those involved in the development of the Accord negotiated in good faith with the intention that it result in an agreed outcome in Copenhagen, and understood it to be a package - one that, like all difficult compromises, is ideal to no Party, but which was acceptable to a diverse range of Parties."

So the saga continues. Hopefully, the Parties at Bonn will be able to focus more on substance than on procedure. Much of the Copenhagen Accord and the results of the AWG-LCA overlap. Even then, the US call for a legally binding agreement in 9 months in Mexico looks overly-ambitious.

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Virginia and Alabama join the attack on the EPA's endangerment finding

Mon, 22 Feb 2010 09:50:00 EST

The States of Virginia and Alabama have commenced legal action to challenge the U.S. Environmental Protection Agency's ("EPA") endangerment finding and its jurisdiction to regulate greenhouse gases under the Clean Air Act. As reported last week, Texas, the U.S. Chamber of Commerce, and a coalition of business lobby groups (including the National Association of Manufacturers and the American Petroleum Institute) have launched similar claims.

Virginia's petition stands out, however, in that it appears to attack the climate science, not just the administrative process by which the EPA arrived at its foundational endangerment finding. BusinessGreen.com reports that Virginia attorney general Kenneth T Cuccinelli II accused the EPA of acting in "an arbitrary and capricious fashion" and relying too heavily on reports from the U.N. Intergovernmental Panel on Climate Change ("IPCC"). "The IPCC reports were produced without regard to US data standards and thus lack the transparency and data quality standards that the EPA should be demanding in the reports it bases it's [sic] endangerment findings on," said Mr. Cuccinelli, continuing, "We cannot allow unelected bureaucrats with political agendas to use falsified data to regulate American industry and drive our economy into the ground."

By focusing on the science that underpins the endangerment finding, Virginia's petition could result in a trial that would be much more politically charged and highly publicized than the trials of the petitions that focus on purely administrative law concepts. Comparisons are already being drawn with the 1925 "Scopes Monkey Trial", in which the validity of a statute that prohibited the teaching of evolution was challenged.

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Texas, US Chamber of Commerce and other groups challenge EPA endangerment finding

Fri, 19 Feb 2010 09:16:00 EST

The U.S. Environmental Protection Agency ("EPA") will be fighting a battle on many fronts with respect to its recent finding that greenhouse gases in the atmosphere endanger the public health and welfare of current and future generations (the "endangerment finding"). At least three lawsuits have been launched to challenge the ability of the EPA to regulate greenhouse gases under the Clean Air Act based on its endangerment finding. The litigious onslaught is far from surprising, but comes at a bad time as prospects for passing a climate change bill in Congress dimmed further this week.

The State of Texas launched a lawsuit this week opposing the endangerment finding. A similar action was launched the same day by a coalition of eight trade groups, including the National Association of Manufacturers, the American Petroleum Institute (API), and the National Association of Home Builders. The U.S. Chamber of Commerce kicked off the trend last week with a petition challenging the process by which the EPA arrived at its endangerment finding.

In fact, the Chamber of Commerce has been on the offensive for several months, but appears to have changed tactics. Back in August, the Chamber was calling for a "Scopes monkey trial" of climate change science. Now they appear to be taking a more clinical administrative law tack, alleging that the EPA's process for making the endangerment finding was deficient. The Chamber's chief legal officer, Steven J. Law, said that the legal challenge "will focus specifically on the inadequacies of the process that EPA followed in triggering Clean Air Act regulation, and not on scientific issues related to climate change or endangerment."

The Chamber's view is not shared by all of its members. Apple, Pacific Gas and Electric, PNM Resources, and Exelon announced last year that they would not renew their memberships as a result of the Chamber's stance on climate change. Nike stepped down from the board in protest, but remained a member in hopes of advocating for a change in the position.

The lawsuits are not surprising. All of the petitioners have expressed deep concern about the economic impact of EPA-administered emissions regulations. Perhaps these stakeholders believe that a more favourable and flexible climate change regime will be developed in Congress, although they may be hoping to stall that effort as well.

And stalled is exactly what the bills in Washington appear to be. Making matters worse, key industry supporters ConocoPhillips, Caterpillar, and BP recently dropped out of the US Climate Action Partnership, which has been lobbying Congress to pass climate change law. They cited concerns that the draft bills did not do enough to recognise the importance of natural gas and were too favourable to the coal industry.

The brakes are therefore on all efforts to regulate climate change in the U.S. Given the federal government's strict policy of harmonization with the U.S., Canada's efforts to create national climate change legislation are therefore also on hold as well. Until progress is made south of the border, emissions in Canada will most likely be regulated at the provincial or regional level, if at all.

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Lobby group challenges California's Low Carbon Fuel Standard in court

Tue, 16 Feb 2010 16:50:00 EST

The National Petrochemical & Refiners Association ("NPRA") is asking a court to strike down California's Low Carbon Fuel Standard ("LCFS"). The LCFS will make it harder to sell certain fuels, including those derived from Alberta's oil sand, in California. NPRA is attacking the LCFS principally on constitutional grounds, arguing that California lacks the jurisdiction to make laws that pertain to inter-state commerce. The case could be one to watch as Canada's provinces and federal government contemplate emissions reduction schemes whose effects will cross jurisdictional boundaries.

The LCFS is intended to achieve at least 10 percent in the carbon intensity of California's transportation fuels by 2020. Under the regulation, every type of fuel is assigned a carbon intensity value (measured in CO2-equivalent gram per unit of energy). Fuel providers must ensure that the mix of fuels they sell into the California market meets, on average, a declining standard for greenhouse gas emissions intensity. The LCFS therefore creates a strong disincentive to buy fuels that have a high carbon intensity.

Under the regulation, the carbon intensity of a fuel is derived with reference to the lifecycle emissions associated with the fuel (coloquially referred to as "well head to wheels" emissions). Fuels derived from Alberta's oil sands, the output of which is deemed to be "high carbon-intensity crude oil" ("HCICO"), are deemed to have particularly high lifecycle emissions, making them much less attractive under the LCFS. In their complaint (at paragraph 61), the NRPA asserts that the LCFS thereby "creates a barrier to the sale of transportation fuel derived from oil extracted by certain processes, and in certain regions, including Canada" and that "the barrier to HCICO oil is designed, as a practical matter, to make it economically infeasible to import HCICO to California."

NRPA takes particular issue with such extra-jurisdictional impacts of the LCFS. Article I, Section 8, Clause 3 of the United States Constitution (the "Commerce Clause") provides that the US Congress has the jurisdiction to "regulate Commerce with foreign Nations, and among the several States, and with the Indian tribes." There is a line of cases in the US that stand for the proposition that there exists a converse "dormant Commerce Clause" that prohibits states from passing laws that burden or discriminate against interstate commerce. The NRPA complains that the LCFS does exactly that by making judgments about activities that occur wholly outside of California. The NRPA therefore seeks to have the law struck down as being contrary to the US constitution.

The NRPA's motivation is not earth shattering. It is generally opposed to legislation that burdens its members, which include such oil giants as Shell and BP, both of which have significant oil sands interest, but both of which have also denied supporting the litigation). Their constitutional argument, however, should be much more interesting to Canadian legal observers.

Sections 91 and 92 of Canada's constitution also divide jurisdiction between the federal and provincial governments. Given that the constitution was penned in 1892, it is not surprising that low carbon fuel standards and other environmental matters are not expressly discussed in the division of powers sections. Past cases involving environmental laws, including the Canadian Environmental Protection Act (under which the federal government proposes to enact its pending GHG regulations), have focused on the tension between the federal power with respect to criminal law and the provincial power with respect to property and civil rights. However, the federal government's powers with respect to tax, trade and commerce, and peace, order and good governance could also become relevant to the economic regulation of emissions, as could be the provincial power with respect to direct taxation.

There is therefore ample scope for constitutional litigation in Canada with respect to greenhouse gas emissions regulations, whether enacted provincially or federally. NRPA's complaint could therefore foreshadow similar actions north of the border.

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Alberta adjusts CCS spending timeline in 2010 Budget

Wed, 10 Feb 2010 12:21:00 EST

The Government of Alberta unveiled its 2010 Budget on Tuesday. The budget continues to provide funding for carbon capture and storage ("CCS") projects, although at a slower pace than previously planned.

In last year's budget, the government planned to spend the first $800 million of its $2 billion of CCS funding by the end of the 2011-2012 fiscal year. That figure has been scaled back to $300 million in the 2010 Budget ($500 million over the next 3 years), with $100 million allocated for the coming fiscal year.

The Edmonton Journal reports that Alberta Minister of Energy Ron Liepert emphasized that the government is still committed to providing the full $2 billion in funding. However, he explained that the spending timeline had been adjusted because the private sector has not been ready to push ahead with the four projects to be funded by the government.

Recall that Alberta announced in 2009 that four projects would received CCS funding. The winning private sector proponents propose to:

* retro-fit CCS onto a coal-fired generating plant under construction west of Edmonton;

* install CCS technology on an oil sands upgrader;

* turn deep coal deposits into clean burning synfuel; and

* transport carbon dioxide from a fertilizer plant and proposed upgrader east of Edmonton to oil fields in east-central Alberta to enhance recoveries.

According to 2010 Budget documents, the projects will remove more than five million tonnes of carbon dioxide per year once fully operational in 2015. The 2010 Budget notes that this is equivalent to taking approximately one million vehicles off the road.

However, Alberta's greenhouse gas emissions grew by more than 5 million tonnes in the period from 2004 to 2007 (according to the Alberta Environment Report on 2007 Greenhouse Gas Emissions). If CCS is to make a significant and timely contribution to the mitigation of emissions in Alberta, both the private sector and the government should remain committed to moving forward with the projects as quickly as possible.

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Minister Prentice Confirms Canada's Commitment to Copenhagen

Tue, 02 Feb 2010 00:54:00 EST

On the heels of Canada's weekend confirmation of its emissions targets to the United Nations (17% reduction by 2020 relative to 2005 levels), Minister Prentice spoke to the University of Calgary Public Policy and School of Business today about climate change, the impact of the Copenhagen Accord, the importance of clean technology and innovation and Alberta's oil sands.

Copenhagen Accord

The Minister affirmed Canada's support for the Copenhagen Accord today and attempted to define, from Canada's perspective, the importance of the outcome of the December meetings in Denmark. The Minister remarked:

'What was achieved at Copenhagen, frankly, is not well understood. Neither is the fundamental importance of the outcome. That's partly because climate change has become such an ideological issue that media reports were often confusing, and sensationalized. And that made an already challenging process, even more challenging. The agreement forged during that intense two-week period in December, represents a major turning point. For Canada and for each of the other nations that signed it.

The Copenhagen Accord is what the federal government has advocated for more than three years and what we negotiated to accomplish for a year. And we firmly support it. It accords with the principles that we have enunciated, sometimes unpopularily, at the climate change table".

The Minister's confirmed that Canada has been continuing on the same path of emissions reductions and harmonization with the United States. He further outlined the major reasons why the Copenhagen Accord was a success for Canada:

1. The Accord has the support of the United States, meaning that Canada's objective of aligning our policy with that of the U.S. now has a reinforced framework.

2. The Accord creates a "functional, international community with one shared goal - addressing climate change in a principled, comprehensive fashion. As a respected, fully-engaged member of that community, Canada is not alone in facing that challenge".

3. The Minister affirmed that the Canadian Government under its current leadership is entirely committed to implementing the Accord, something that previous governments were not willing, by their own admission, to do with the Kyoto Protocol. Minister Prentice remarked that his Government "will act on the Copenhagen Accord because it is consistent with Canada's stated position on climate change and because it moves us closer to our ultimate goal of becoming a Clean Energy Super Power. It is also a practical document, one that acknowledges that there can be more than one way to proceed in addressing climate change. It accommodates the specific constraints of certain countries while allowing them to capitalize on their strengths".

Seventeen Percent by 2020 - An Ambitious Target

The Canadian Government inscribed its target to reduce greenhouse gas emissions with the United Nations on the weekend: a 17 per cent reduction by 2020 from the base year of 2005. The target, which has been adjusted from 20 per cent by 2020 relative to 2006 levels, now exactly aligns with those inscribed by the United States to the United Nations.

In his speech, the Minister stressed the pointlessness of "Canada and Canadian businesses to strike out on their own, to set and to pursue target that will ultimately create barriers to trade and put us at a competitive disadvantage". He chided Quebec's recent vehicle regulations as being evidence of this "folly".

Seventeen percent by 2020 is an ambitious target. Why? Because Canada will have to "dig deeper to achieve the same end":

1. Canada already burns less coal to generate electricty than the United States;

2. Our equipment and machinery is generally newer and more energy efficient;

3. Canada's "cold climate and sprawling geography typically mean significantly higher operating costs for Canadian companies".

Technology and Innovation

How are we going to do it? The answer, according to the Minister, is to focus on technology and innovation. Since 2007 the Canadian Government has invested in a range of ecoAction programs, many of which promote the use of new technologies. In 2009, Canada's Economic Action Plan included billions of dollars in spending on initiatives like the Clean Energy Fund and the Green Infrastructure Fund. They provide close to $2 billion for the development of promising clean energy technologies and green infrastructure projects. This is in addition to the clean energy technology initiatives that Alberta has undertaken provincially - the $2 billion Alberta CCS spend, the Climate Change and Emissions Management Fund are examples.

The Oil Sands

The Minister also directly addressed the question of Alberta's rich oil sands reserves by reiterating Canada's support of their continued expansion. "[T]he oil sands are one of Canada's greatest resource endowments and developed responsibly", he said, and "hold the promise to be a driving engine of the Canadian economy, ensuring prosperity and a high quality of life for our children and our grandchildren".

However, the Minister tempered his remarks and concluded that Canada and Alberta need to be vigilant:

"The oil sands must be developed in an environmentally responsible manner and the Government of Canada will ensure that oil sands development lives up to our stated objective to be a "clean energy superpower"...The development of the oil sands and the environmental footprint of these industrial activities have become an international issue and as such, they now transcend the interests of any single corporation. What is at issue on the international stage is our reputation as a country. Accordingly, we need to up our game, in terms of both environmental vigilance and in terms of our communication efforts.

For those of you who doubt that the Government of Canada lacks either the willingness or the authority to protect our national interests as a "clean energy superpower", think again. We do and we will. And in our efforts we will expect and we will secure the co-operation of those private interests which are developing the oil sands. Consider it a responsibility that accompanies the right to develop these valuable Canadian resources".

All in all 2009 was a good news story for Canada on the climate change front. The Minister closed his speech with a list of Canada's accomplishments, topped by the success of the Copenhagen Accord for our nation. He's right. It was.

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$559 million in Green Infrastructure Investments announced for Greater Montreal Area

Mon, 01 Feb 2010 11:18:00 EST

Following last week's similar announcement for Quebec City, Ms. Line Beauchamp, Minister of Sustainable Development, Environment and Parks, and Mr. Steven Blaney, MP for Levis-Bellechasse, today announced joint federal-provincial support for major Green Infrastructure Projects in the Greater Montreal Area (the "Projects").

The Projects represent an overall investment of $559 million and involve the construction of two facilities for organic waste treatment using anaerobic digestion, two composting centers and one pilot organic waste pretreatment facility, at a cost of close to $213 million. In addition, three more organic waste treatment facilities which would be constructed in Laval, Longueuil and Montreal's South Shore would benefit from additional joint federal-provincial financing of approximately $180 million, with the balance to be financed via municipal contributions.

The Projects will allow for the treatment of a large part of the organic waste generated in the Greater Montreal Area, including Laval and Montreal's South Shore. The biomethanization process used in the facilities will allow for the treatment of table scraps, septic sludge and organic waste from homes, factories and institutions, while the composting process will also treat table scraps, leaves and grass clippings produced in the municipalities and agglomerations. Ultimately, these Projects will limit the amount of waste sent to municipal landfill sites and allow, in the case of anaerobic digestion, for the production of bioenergy to replace fossil fuel and combustibles, thus reducing greenhouse gas emissions (GGEs).

Of the overall investment, the Government of Canada has committed to contribute close to $150 million, or up to one third of eligible costs. The federal contribution to the Project will be provided through the new, $1-billion, five-year, nation-wide Green Infrastructure Fund, which is part of Canada's Economic Action Plan announced in the January 2009 Budget. The Green Infrastructure Fund supports sustainable energy generation and transmission, as well as wastewater treatment and solid waste management at the municipal level.

As for the Government of Quebec, it is to fund approximately $165 million of the Projects. The provincial contribution is being granted under the province's Program for the Treatment of Organic Matter through Biomethanization and Composting (French-only) (the "Program") which benefits from a total investment of about $650 million, of which at least $187 million is to come from the Government of Quebec. Projects funded under the Program are to create approximately 5,200 direct and indirect jobs. The Program aims to implement one of the major components of Quebec's new Management of Residual Materials Policy (French-only) by progressively banning the landfilling of organic matter by 2020, while contributing to the achievement of the province's GHG emissions reduction target.

The federal government is also evaluating other biomethanization projects to be undertaken in the province of Quebec under the Green Infrastructure Fund. The total federal investment in these biomethanization projects could reach more than $170 million.

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Canada files new emissions reduction targets with the U.N.

Mon, 01 Feb 2010 10:06:00 EST

CBC reports that the federal government formally notified the United Nations that it plans to reduce emissions by 17% from 2005 levels by 2020. As recently as December during the climate change conference in Copenhagen, Canada's target had been a 20% reduction from 2006 levels by 2020. The change may amount to a "distinction without a difference", but has nevertheless frustrated many who want to see Canada be more aggressive in its efforts to combat climate change.

The new target is identical to that submitted to the UN by the United States. It is therefore consistent with the federal government's oft-repeated goal of aligning Canada's climate change policy with that of the U.S. (not surprisingly, Canada submitted its target one day after the U.S. had done so). In sharp contrast, the European Union has confirmed it commitment to cut emissions 20% from 1990 levels by 2020 and has reiterated that it will raise the reduction target to 30% if other large emitters set similar targets.

It is unclear whether Canada's new target is materially different from the old, as both the base year and the percentage reduction changed. Prime Minister Harper had previously said that Canada's old target was virtually identical to the new target.

Few are surprised by the change. Even as he presented the old target to the world in the run-up to Copenhagen, the Prime Minister reserved the right to "make some minor adjustments" to the target. Late last week, Environment Minister Jim Prentice teed up the change by emphasizing that the government wanted to "see our targets and the American targets equated, we want to see our base years equated."

The announcement has many in the environmental community incensed. Dave Martin, a climate and energy coordinator with Greenpeace, told the Toronto Star that the change was further evidence that "we're heading in exactly the opposite direction that we need to head." The new targets are equivalent to a 2.5% increase in emissions from 1990 levels. Canada's obligation under the Kyoto Protocol was to reduce emissions by 3% from 1990 levels by 2012.

More importantly, Mr. Martin expressed frustration that, "not only have they [the federal government] reneged on the target that they adopted a couple of years ago, they have also failed to put in place the regulations that they promised last year."

The failure to implement emission reduction legislation has plagued Canada, both under the Liberal government that signed the Kyoto Protocol and under the current Conservative government. Hopefully the latest target will not be just another international promise that Canada is unwilling or unable to keep domestically.

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Governments of Canada and of Quebec announce major Green Infrastructure Investment in Quebec City

Thu, 28 Jan 2010 16:03:00 EST

Today the Honourable Josee Verner, Minister of Intergovernmental Affairs, President of the Queen's Privy Council for Canada and Minister for La Francophonie and Minister responsible for the Quebec City Region, Ms. Line Beauchamp, Minister of Sustainable Development, Environment and Parks, and Mr. Sam Hamad, Minister of Employment and Social Solidarity and Minister responsible for the Capitale-Nationale region of Quebec, announced support for a major Green Infrastructure Project in Quebec City (the "Project"). The Project represents a global investment of $57 million and will create more than 450 direct and indirect jobs in the region.

The Project involves the construction of an organic waste treatment facility, including biomethanization and composting equipment. In its first five years of operation, it is expected the facility will be capable of treating up to 70% of the organic waste produced by the entire population of Quebec City. Once at full capacity, it will treat up to 85,000 tonnes of organic waste previously destined to incineration. Biomethanization is the process of decomposing biomass with anaerobic bacteria to produce biogas, a Green Fuel that can displace fossil fuels in automotive or home heating applications.

Of the overall investment, the Government of Canada has committed to contribute close to $17 million, or up to one third of eligible costs. The federal contribution to the Project will be provided through the new, $1-billion, five-year, nation-wide Green Infrastructure Fund, which is part of Canada's Economic Action Plan announced in the January 2009 Budget. The Green Infrastructure Fund supports sustainable energy generation and transmission, as well as wastewater treatment and solid waste management at the municipal level.

As for the Government of Quebec, it is to fund approximately $17.7 million of the Project. The provincial contribution is being granted under the province's Program for the Treatment of Organic Matter through Biomethanization and Composting (French-only) (the "Program") which benefits from a total investment of about $650 million, of which at least $187 million is to come from the Government of Quebec. Projects funded under the Program are to create approximately 5,200 direct and indirect jobs. The Program aims to implement one of the major components of Quebec's new Management of Residual Materials Policy (French-only) by progressively banning the landfilling of organic matter by 2020, while contributing to the achievement of the province's GHG emissions reduction target.

Quebec City Mayor Regis Labeaume announced that the remainder of the Project's cost will be borne by the City.

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Canada, BC and the Fraser Basin Council Initiate a BC Regional Adaptation Collaborative

Thu, 28 Jan 2010 15:12:00 EST

The Government of Canada announced a $6.9 million Regional Adaptation Collaborative program for BC ("BC RAC") this week, aimed at addressing the adverse impacts of climate change on water in BC. The project entitled Preparing for Climate Change: Securing BC's Water Future builds on key risks and adaptation opportunities identified in the BC chapter of Natural Resources Canada's report: From Impacts to Adaptation: Canada in a Changing Climate 2007.

The purpose of the BC RAC program is to assist government, First Nations, the private sector, communities and resource managers prepare for climate change through four initiatives: water allocation and use, forest and watershed management, flood protection and flood plain management and community planning. Over the next 3 years, the program will develop adaptation tools and support focused collaboration at the regional level, to facilitate regional adaptation planning and decision making. According to David Marshall, Executive Director of the Fraser Basin Council:

"We are all now faced with a dual challenge: first, to tackle climate change by moving to low-carbon economy and second, to minimize impacts that climate change is already having on watersheds. A collaborative approach is key to success, along with a frank acknowledgement that water is precious and can't be take for granted."

The program is one of several new actions undertaken by the Province to overhaul its water management laws and fulfill its committments for managing water resources and riparian areas under its Living Water Smart plan. See our previous blog on BC's Water Act modernization process.

BC RAC projects will be co-lead by the Fraser Basin Council and the BC Ministry of Environment with funding from NRCan and 18 regional partners.

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SEC issues climate change disclosure guidance

Thu, 28 Jan 2010 10:10:00 EST

As anticipated, the U.S. Securities and Exchange Commission ("SEC") voted 3-2 yesterday to release interpretive guidance regarding climate change disclosure by public companies. The guidance clearly signals the SEC's heightened expectation regarding climate change disclosure. However, issuers may find that the guidance raises more questions than it answers.

SEC Chairman Mary Shapiro was careful to emphasize that yesterday's release constitutes guidance, not an amendment to existing disclosure rules. She also noted that the SEC was expressing no view regarding the existence, pace or causes of climate change. This caveat reflects the highly politicized nature of the climate change issue in the U.S. Despite the "political sensitivity" of the issue, the SEC's guidance is intended to ensure that "disclosure rules are consistently applied...so that investors get reliable information."

The guidance, which is not yet available on the SEC website but is summarized in a press release, highlights that the following four issues may require disclosure:

* "Impact of Legislation and Regulation: When assessing potential disclosure obligations, a company should consider whether the impact of certain existing laws and regulations regarding climate change is material. In certain circumstances, a company should also evaluate the potential impact of pending legislation and regulation related to this topic.

* Impact of International Accords: A company should consider, and disclose when material, the risks or effects on its business of international accords and treaties relating to climate change.

* Indirect Consequences of Regulation or Business Trends: Legal, technological, political and scientific developments regarding climate change may create new opportunities or risks for companies. For instance, a company may face decreased demand for goods that produce significant greenhouse gas emissions or increased demand for goods that result in lower emissions than competing products. As such, a company should consider, for disclosure purposes, the actual or potential indirect consequences it may face due to climate change related regulatory or business trends.

* Physical Impacts of Climate Change: Companies should also evaluate for disclosure purposes the actual and potential material impacts of environmental matters on their business."

Interestingly, the guidance does not provide any guidance as to when companies should disclose actual emissions data. Presumably, it will be left to the issuers to determine when this level of detail is material.

Particularly challenging will be the call to disclose the impact of "pending legislation and regulation", the "potential indirect consequences it may due to climate change related regulatory or business trends", and " potential material impacts of environmental matters on their business". This type of speculative disclosure begs several questions: To be material, do pending legislation or potential consequences have to be possible, probable or certain? How are companies expected to assess the probability and likely magnitude of the impact of future contingent events? On whose assessment may they rely? What happens if an issuer provides disclosure based on speculation today that proves to be wrong tomorrow?

Given that these questions remain unanswered, we expect that any disclosure provided in response to the new SEC guidance will be heavily qualified. We also expect that many companies will rely heavily on professional advisors to assist with this speculation. Issuers will no doubt proceed cautiously when preparing climate change disclosure this year. They will have to balance the need to say something that takes the new guidance into account with the risk of saying something that harms share prices and is later found to have been unfounded or unnecessary to disclose.

As discussed in a previous posting, the SEC's guidance will certainly be taken into consideration by the Ontario Securities Commission as it develops its own climate change disclosure guidance in time for the 2010 annual report season.

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Canada qualifies its stated emissions reduction goals

Thu, 28 Jan 2010 08:40:00 EST

In remarks that are consistent with Canada's declared position over the past several months, federal Environment Minister Jim Prentice emphasized to the Globe and Mail that Canada's top priority is harmonizing its approach to regulating greenhouse gasses with that of the U.S. Minister Prentice clarified that such harmonization extends to the setting of reduction targets: "By definition, that means we will want to see our targets and the American targets equated, we want to see our base years equated, and we condition our position [on targets] as requiring commensurate U.S. effort."

In Copenhagen in December, Canada declared its target to be a reduction of 20% from 2006 levels by 2020, which it believed to be equivalent to the U.S.'s declared goal of a reduction of 17% from 2005 levels by 2020.

However, some expect that the U.S. may soften its target to help pass the draft climate change bill (which is currently languishing in the Senate). Minister Prentice's comments suggest that Canada would follow suit.

Minister Prentice also said that Canada will likely follow the overall approach to regulation adopted in the U.S. If the Waxman-Markey bill dies in the Senate, the Obama administration may turn to the Environmental Protection Agency to act on its endangerment finding by regulating emissions under the Clean Air Act.

Critics lament the Minister's comments, fearing that the federal government's strategy of following the U.S. is as much a tactic for further delaying the regulation of large emitters in Canada.

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BC Renewable and Low Carbon Fuels Act provides opportunity to sell 'over-compliance' rights

Wed, 27 Jan 2010 16:38:00 EST

The BC Greenhouse Gas Reduction (Renewable And Low Carbon Fuel Requirements) Act came in to force at the beginning of January. See news release.

Ethanol and Biodiesel Standards

Under the Act, a supplier who sells gasoline (for the first time after the fuel is manufactured or imported) in BC, must ensure that renewable fuel (ethanol produced from biomass) comprises 5% of supplies for each calendar year starting in 2010.

A supplier who sells diesel (for the first time after it is manufactured or imported) in BC, must ensure that renewable fuel (biodiesel) comprises 3% of supplies for the calendar year 2010; 4% for 2011 and 5% for 2012.

A handful of companies in BC import or manufacture transport fuels, but there are also numerous smaller companies that will be affected by the new requirements.

Notional Transfers

A supplier may "notionally transfer" all or part of the renewable fuel that it supplies in a compliance period to another supplier. In other words, if one fuel supplier in the province supplies more renewable fuel than is required under the Act that supplier will effectively be able to sell its "over-compliance" as a credit to another supplier who cannot (or who decides not) to meet the compliance obligation.

These trades take place under private contract.

Compliance reports must set out the volume of fuel notionally transferred as measured in litres, and be evidenced by "dated contracts, records of transfer, invoices, sales receipts, and records of payments". Compliance reports must be submitted in March 2011 for the 2010 reporting year.

Carbon Intensity Standards - Emissions Trading

Also, suppliers who sell gasoline, diesel, natural gas, propane, hydrogen or electricity (for the first time after it is manufactured or imported) in BC for use as a transport fuel must ensure that the weighted average of "carbon intensities" for all such fuels is no greater that a prescribed level for a compliance period. However, there are no penalty provisions yet in force for this part of the Act.

"Carbon intensity" means the GHG emissions proportionate to the energy provided by the fuel (measured in grams of carbon dioxide equivalent per megajoule)

As with the renewable fuels standard, suppliers will also be able to "notionally transfer" to other fuel suppliers carbon dioxide equivalent emissions if they exceed requirements.

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"BASIC Bloc" fast out of the gates on international climate talks (as well as economic recovery) in 2010

Wed, 27 Jan 2010 14:41:00 EST

Submitted by Grant Boyle

On January 24, 2010 the so-called BASIC Bloc - (Brazil, South Africa, India and China) held its second meeting since the Copenhagen Summit last December. The BASIC Bloc, along with the United States, were among the key players involved in last minute efforts to put together the Copenhagen Accord at the end of December's meeting.

In a joint statement the Ministers expressed their intention to communicate information on their voluntary mitigation actions to the UNFCCC by 31 January 2010 and called for the early flow of the pledged US$10 billion in 2010.

The Ministers spoke of the importance of the Copenhagen Accord as "representing a high level political understanding among the participants on some of the contentious issues of the climate change negotiations" but emphasized a negotiating agenda very much in keeping with the approach leading up to Copenhagen that started in Bali two years ago. The statement says:

"The Ministers underscored the centrality of the UNFCCC process and the decision of the Parties to carry forward the negotiations on the two tracks of Ad hoc Working Group on Long-term Cooperative Action (AWG-LCA) under the Convention and the Ad hoc Working Group on further emission reduction commitments for Annex I Parties under the Kyoto Protocol (AWG-KP) in 2010 leading up to COP-16 and COP/MOP6 at Mexico. The Ministers reiterated that all negotiations must be conducted in an inclusive and transparent manner."

The Ministers also called on the COP 15 President (Denmark) to convene meetings of the Ad hoc Working Group on Long-term Cooperative Action under the UNFCCC (AWG-LCA) and the Ad hoc Working Group on Further Commitments for Annex I Parties under the Kyoto Protocol (AWG-KP) in March 2010, and to ensure that the those groups meet at least five times before the Mexico Conference. (See previous post for a brief summary of the outcomes of the AWG-LCA at Copenhagen.)

It appears, then, that it's back to the "Bali drawing-board' as far as the BASIC Bloc is concerned.

This message is at odds with the flurry of sentiment following Copenhagen that the UNFCCC will likely (or should ) disintegrate into more manageable negotiating frameworks such as the G-20 or Major Economies Forum. See for example, remarks by US policy analyst, Robert Stavins.

It is difficult to imagine, however, that the G20 or something like it could establish an agreement framework that would go beyond the type of high-level political agreement exemplified by the Copenhagen Accord.

As reported in the Canadian Press, Canadian Environment Minister Prentice appears to agree that any international agreement would require consensus beyond the G20 to be legally binding.

We are therefore left with the question: is the Copenhagen Accord a turning point in international climate talks or does it simply amount to a high level announcement amidst what is shaping up to be a long-term, incremental, negotiating process under the UNFCCC?

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SEC climate change disclosure requirements imminent; OSC to follow by end of 2010

Tue, 26 Jan 2010 09:35:00 EST

We have blogged on several occasions about growing support in the investment community for greater disclosure by public companies of the financial risks posed by climate change (for all relevant posting, see here; for our most recent posting regarding shareholder activism in respect of Shell, see here). Investors and other stakeholders have called upon securities regulators to update their requirements in respect of such disclosure. U.S. investors may get their wish tomorrow. Canadian investors do not have long to wait.

SEC proposal

The U.S. Securities and Exchange Commission will be holding a meeting on Wednesday, January 27 at 10:00 a.m. to consider and vote on two proposals, the second of which is the following:

The Commission will consider a recommendation to publish an interpretive release to provide guidance to public companies regarding the Commission's current disclosure requirements concerning matters relating to climate change.

The recommendation, if endorsed, will have the SEC publish much more detailed guidance on how and what companies are to report with respect to climate change. Ideally, the SEC will require that companies disclose their emissions levels, discuss and quantify both regulatory risks (e.g., costs of complying with cap-and-trade or other emissions reduction obligations) and operational risks (e.g., impact of extreme weather events, changes in demand as a result of legislation), and discuss corporate strategies for addressing such risks and capitalizing on any opportunities created by climate change.

General implications

The guidance is a long time coming. Some groups, like the Investor Network on Climate Risk, have been petitioning the SEC since 2003 to improve its climate change guidance. Forward thinking investors have increasingly recognizing that the legal and physical changes brought about by climate change are financially material. Increasingly, the costs associated with climate change will have to be internalized by companies and will be reflected in the market's valuation of the securities of those companies.

Many large scale emitters will likely be happy to have the SEC tell them what to do about climate change disclosure. Several such companies have been forced by state-led lawsuits, environmental class actions, and shareholder activism to acknowledge that climate change is financially material to their business. SEC guidance would provide a level of clarity and certainty that civil litigation and proxy wars cannot offer.

Ultimately, clearer disclosure requirements should give the market access to the information they need to understand the impact of climate change on the long term value of companies. This improved understanding could drive a significant reallocation of capital that would have the potential to accelerate the transition towards a more sustainable economy.

Canada next

On December 18, 2009, the Ontario Securities Commission ("OSC") issued Staff Notice 51-717 to notify stakeholders of its plans regarding disclosure of corporate governance and environmental matters during 2010. With respect to environmental disclosure guidance, the notice says the following:

"During 2010, we intend to issue a staff notice providing guidance on compliance with existing environmental disclosure requirements under National Instrument 51-102 Continuous Disclosure Obligations. In developing the notice, we plan to consult with our advisory committees and other experts in this area. We intend to publish the notice by December 2010 so that reporting issuers will have sufficient time to consider the guidance when preparing their 2010 annual continuous disclosure documents."

It therefore appears that the OSC intends to prepare environmental disclosure guidance that it will expect reporting issuers to follow when preparing their 2010 annual report.

While the notice only discusses environmental disclosure generally, we expect that the OSC's guidance will deal with climate change issues specifically. In a December 18, 2009 report to the Minister of Finance on the OSC's corporate sustainability reporting initiative, the OSC referred to climate change risk in several places. It also took specific notice of a submission from the British Columbia Investment Management Corporation, Ceres, Climate Action Network Canada and the Climate Change Lawyers Network which included a survey of the annual reports of 35 reporting issuers in Ontario in nine industry sectors with market capitalization of at least CDN $1 billion. The survey found that the disclosure contained poor or limited descriptions of climate change risks, if the issue was discussed at all. The OSC's guidance will likely address this gap in disclosure by providing suggestions as to what should be disclosed where climate change is material for a reporting issuer.

Given the strong linkages between the capital markets of Canada and the U.S., we expect that the OSC (and other Canadian securities regulators) will follow the SEC's lead with respect to climate change disclosure guidance. The outcome of the SEC's meeting tomorrow, and the guidance that it subsequently issues, may therefore help companies anticipate what type of climate change disclosure the OSC will require by the end of 2010.

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Important note regarding Davis LLP's Climate Change Law blog

Wed, 20 Jan 2010 10:28:00 EST

As you hopefully already know, Davis LLP maintains a number of blogs of interest to the Canadian legal and business communities. This blog, which focuses on Climate Change Law, has included many postings over the past year regarding the evolving renewable power market in Ontario. In the future, renewable power developments in Ontario (and across Canada) will be covered on our Environmental, Energy and Resources Law blog, starting with today's posting: "Ontario to announce $7 billion renewable power deal with Samsung tomorrow."

Climate change issues, including those regarding greenhouse gas regulation in Canada and the U.S., emissions trading, climate change disclosure, and post-Copenhagen developments abroad, will continue to be covered here in the Climate Change Law blog.

We hope this change will help make each of our blogs more specific and relevant to you.

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Investors' petition to Shell to improve oil sands disclosure is a sign of a broader trend

Tue, 19 Jan 2010 14:43:00 EST

A coalition of over 140 investors wants the opportunity to scrutinize Royal Dutch Shell plc's decision to invest in Alberta's oil sands. The investors succeeded in having a motion added to the agenda for Shell's 2010 annual general meeting that, if passed, will require the company's Audit Committee or Risk Committee to report on the relevant investment analysis in time for the 2011 AGM. While this initiative is uniquely focused on Shell, it is part of a larger trend whereby progressive investors are calling upon large emitters to improve their climate change disclosure. Canadian reporting issuers should consider preparing today for the disclosure requirements of the future.

The Shell motion

The initiative is being co-ordinated by FairPensions, campaigning organisation founded in 2005 to promote responsible investment in the pensions and investment industry. The coaltions 142 supporters include fund managers, pension funds, foundations and faith groups. Major financial players in the coalition include The Co-operative Asset Management (which is also funding legal action by the Creen Nation alleging that Shell's oil sands development infringes their Constitutionally protected rights), the UNISON Staff Pension Scheme and a significant contribution from Rathbone Greenbank Investments clients.

The following is the full text of the proposed resolution:

That in order to address our concerns for the long term success of the Company arising from the risks associated with oil sands, we as shareholders of the Company direct that the Audit Committee or a Risk Committee of the Board commissions and reviews a report setting out the assumptions made by the Company in deciding to proceed with oil sands projects regarding future carbon prices, oil price volatility, demand for oil, anticipated regulation of greenhouse gas emissions and legal and reputational risks arising from local environmental damage and impairment of traditional livelihoods. The findings of the report and review should be reported to investors in the Business Review section of the Company's Annual Report presented to the Annual General Meeting in 2011.

The motion was informed by a general concern about the environmental impacts of the development of the oil sands and specifically by concerns regarding:

* the carbon intensity of the oil sands projects at a time of anticipated regulation and pricing of greenhouse gas emissions;

* forecasted carbon prices;

* the limitations and cost of emissions mitigation; and

* local environmental and livelihoods issues.

In its response, Shell noted that the oil sands account for only 2.5% of its production. "The resolution is basically a request for further information around the economics and other aspects of our oil sands operations. The resolution is submitted by shareholders representing some 0.15% of our total outstanding shares," said the company.

The investor's acknowledged that Shell has provided some disclosure, but believe that more is required. The Co-operative Asset Management's Niall O'Shea said, "given Shell's level of commitment to oil sands there is a greater obligation to shareholders to reassure how it would cope under a number of scenarios. We acknowledge Shell has already done some work in this area but it does not go anywhere near far enough to allay our concerns."

Shell's AGM will be held in the Hague on May 18, 2010.

Broader trend

Shell is not the only entity under pressure to improve environmental disclosure in the public markets. A variety of investor-backed initiatives are calling for more thorough financial reporting and discussion of climate change issues by public companies. Some recent examples include the following:

* The Climate Disclosure Project, which calls upon companies to disclose climate change risk voluntarily, entered its 9th year last year. CDP's 2009 request for information was sent on behalf of 475 global investors with assets under management of US$55-trillion, including 47 of Canada's largest investment organizations.

* In October 2009, the Ontario Securities Commission received a submission from a coalition of investors and environmentalists calling on it to address the poor rates of climate change disclosure in the annual reports of Canadian reporting issuers. The submission was prepared by the Climate Change Lawyers Network and endorsed by British Columbia Investment Management Corporation (bcIMC), Ceres and Climate Action Network Canada. It was based on a review of 35 reporting issuers with market capitalizations of more than $1 billion who operate in sectors that are particularly exposed to climate change risk. Finding disclosure to be wanting, the submission calls upon the OSC to issue guidance that could be informed in part by the Global Framework for Climate Risk Disclosure.

* Last November, a coalition of investors submitted a supplemental petition to the U.S. Securities and Exchange Commission asking for improved disclosure guidance. The 20 signatories to the petition include leading U.S. and Canadian institutional investors managing more than $1 trillion in assets, including the California Public Employees' Retirement System (CalPERS), British Columbia Investment Management Corporation of Canada, Pax World Management Corporation, state treasurers from Oregon, North Carolina, Connecticut, Maryland and Vermont and Florida's Chief Financial Officer. In an accompanying press release, Ceres notes that the "simple truth" behind the petition is that "it's impossible for investors to adequately assess the risk to their investment money if companies don't tell them how much climate change and its impacts might affect their financial performance."

* As we reported previously, New York's Attorney General Andrew Cuomo dusted off an obscure piece of legislation called the Martin Act and relied upon it to subpoena five large energy companies in 2007 to demand information about the companies' analysis of the risk posed by climate change and the disclosure of that risk to investors. The Financial Post reported on December 5, 2009 that three of the companies, AES Corp., Xcel Energy Inc. and Dynergy Inc., had all agreed to provide disclosure as part of settlements with the Attorney General.

Despite the lacklustre outcome of Copenhagen, the glacial progress of the Waxman-Markey bill through the U.S. Senate, and Canada's lack of emissions policy at the federal level, we expect that the investment community will continue to call for improved climate change disclosure through 2010. This trend will be facilitated by the introduction of mandatory emissions reporting requirements in many jurisdictions and by the credible threat that the U.S. EPA will regulate greenhouse gases if Congress fails to do so.

Companies may be wary of being the first to provide comprehensive climate change disclosure, as doing so may (fairly or unfairly) cause the market to devalue the stocks of such companies relative to their more tight-lipped peers. However, companies should nevertheless expect that more disclosure will be required in the foreseeable future. Such companies will not be able to understand their climate change risk exposure overnight. They should therefore consider developing systems today to enable them to meet the disclosure requirements of tomorrow.

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Hydro-Quebec and Mitsubishi Motor Sales of Canada to launch Canada's largest all-electric vehicle pilot project in the fall of 2010

Thu, 14 Jan 2010 15:34:00 EST

Today, Hydro-Quebec and Mitsubishi Motor Sales of Canada Inc. (MMSCAN) announced the signature of a memorandum of understanding that will lead to the launch of Canada's largest all-electric vehicle pilot project this coming fall. In collaboration with the City of Boucherville, Hydro-Quebec will test the performance of up to 50 Mitsubishi i-MiEVs, the vehicle which recently won the Japanese Car of the Year award for "Most Advanced Technology" at the Tokyo International Motor Show.

The project, which is evaluated at $4.5 million, aims to test the cars under a variety of road conditions, including those due to Quebec's harsh winters and is designed to study the vehicles' charging behaviour, the driving experience and overall driver satisfaction. The project is the first of its kind to include the participation of a car manufacturer, a public utility, a municipality and local businesses that will integrate the vehicles into their existing fleets.

Thierry Vandal, Hydro-Quebec's President and CEO declared "This new pilot project is part of our action plan for the electrification of vehicles [...] it will allow us to advance our knowledge of the technology and its integration into our grid, which in turn, will help us plan the necessary charging infrastructure for homes, offices and public places."

The City of Boucherville was selected as the project's host municipality given its proximity to Hydro-Quebec's research institute (IREQ), its role in Hydro-Quebec's upcoming interactive smart zone trial and the diversity of its local businesses. The availability of a local Mitsubishi dealership to oversee the i-MiEVs' maintenance was also part of the selection criteria.

i-MiEV, which stands for Mitsubishi Innovative Electric Vehicle, is an all-electric, highway-capable, charge-at-home commuter car. Because the battery, the motor and other items are mounted out of the way beneath the floor, the i-MiEV seats four adults and offers surprising interior room and cargo space. Other i-MiEV features include excellent low-speed acceleration and a very low centre of gravity, which contributes to superior handling and stability. Moreover, the i-MiEV is extremely quiet.

"We are very proud to be leading the way to a greener, more sustainable future by developing environment-friendly vehicles fuelled by clean, renewable energy," said Koji Soga, President and CEO of MMSCAN. "Mitsubishi is a leader in electric car development and the i-MiEV represents the pinnacle of our green technologies. In the same sense, Hydro-Quebec and the City of Boucherville are demonstrating their environmental leadership by participating in this unique initiative."

The electric vehicle pilot project comes ahead of the government of Quebec's soon to be released 2010-2015 Electric Vehicle Action Plan, announced in June 2009 and which is expected to include incentives to get electric vehicles on Quebec's roadways, as well as for car and component manufacturers to establish themselves further in the province.

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