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As indicated in previous posts on this blog, the Alberta government has been actively reviewing the Municipal Government Act (MGA).  In their recent News Release, the Government has indicated that it will be introducing legislative amendments in May.   In addition, there will be several open houses throughout Alberta to obtain feedback on these proposed amendments.  Proposed dates and location so far are:

  • June 1: Two Hills
  • June 2: Lac La Biche
  • June 3: Athabasca
  • June 6: Rocky Mountain House
  • June 7: Calgary area
  • June 9: Cochrane
  • June 10: Canmore
  • June 13: Edmonton area
  • June 14: Hardisty
  • June 15: Hanna
  • June 16: Red Deer
  • June 21: High Prairie
  • June 22: Peace River
  • June 23: Grande Prairie
  • June 27: Hinton
  • June 28: Whitecourt
  • July 13: Brooks
  • July 14: Medicine Hat
  • July 15: Lethbridge

 

Given the key role that municipalities play in the management and protection of Alberta’s environment, we have already participated in this review by making written submissions. Ultimately, we would like to see the MGA amended to require and empower municipalities to manage and protect the local environment.  Our key recommendations for strengthening the MGA are:

  1. Protection and management of the environment is a valid municipal planning purpose and, as such, should be expressly recognized in the MGA.
  2. The MGA should incorporate by-law purposes specific to protection and management of the environment.
  3. The MGA should expand the enforcement tools available to municipalities for the purposes of environmental protection and management.
  4. The MGA should expand the revenue generation options available to municipalities to enable environmental stewardship and, particularly, land conservation.
  5. The MGA should enhance opportunities for public participation in municipal planning processes.

We believe that these amendments will empower municipalities to play a pivotal role in the protection and management of Alberta’s environment.

This is the fifth post in the Environmental Law Centre’s blog series exploring climate change law in Canada.   This blog series provides updates on climate change law developments and includes insights from our related law reform research.  This blog series is generously funded by the Alberta Law Foundation.

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On April 22, Canada was one of over 160 countries that signed the Paris Agreement on international climate change action.   The Paris Agreement is the latest action flowing from the United Nations Framework Convention on Climate Change (the “UNFCCC”).  The UNFCCC is the first international treaty that addressed climate change, which was agreed upon by the international community in 1992.

 

While the UNFCCC does not set any binding limits on greenhouse gas (“GHG”) emissions, it serves as a framework for international action on climate change.  As time has passed, more specific commitments have been made pursuant to the UNFCCC (such as the Kyoto Protocol and the Copenhagen Accord).  The ultimate objective of the UNFCCC and its related instruments is the “stabilization of GHG concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system” (UNFCCC, Article 2).  There are several key elements to the UNFCCC including a statement of principles (Article 3), a statement of commitments (Article 4), and establishment of the Conference of the Parties (Article 7).

 

All Parties under the UNFCCC, including Canada, have committed to:

  • provision of national inventories of anthropogenic emissions and removal by sinks of GHGs,
  • formulation and implementation of programmes to mitigate climate change by addressing anthropogenic emissions and removals by sinks of GHGs,
  • development of GHG mitigation (reduction or prevention) technologies,
  • promotion of conservation and enhancement of sinks and reservoirs of GHGs,
  • cooperation in preparing for adaption to climate change impacts,
  • consider climate change matters in relevant social, economic and environmental policies and actions,
  • promotion and cooperation in scientific, technological, technical, socio-economic and other research, and in development of data archives related to the climate system,
  • promotion and cooperation in the exchange of relevant scientific, technological, technical, socio-economic and legal information related to the climate system and climate change,
  • promotion and cooperation in education, training and public awareness related to climate change, and
  • communication of information specified in Article 12 to the Conference of the Parties.

 

Under the UNFCCC, there is a distinction between developing and developed countries with additional commitments being made by the developed countries pursuant to the principle of common but differentiated responsibilities.   The primary commitment made by developed countries under the UNFCCC is the requirement to adopt national policies for limiting GHG emissions, and protecting and enhancing GHG sinks and reservoirs with the objective of reaching 1990 levels of GHG emissions (Article 4(2)(b)).

 

In late 2015, at the 21st meeting of the Conference of the Parties, the Paris Agreement was formulated.  As described in its Article 2, the Paris Agreement is designed to enhance the implementation of the UNFCCC by strengthening the global response to climate change, in the context of sustainable development and eradicating poverty by:

  • holding the increase in the global average temperature to well below 2.0oC with efforts to limit the change to 1.5oC,
  • increase the ability to adapt to adverse impacts of climate change and foster climate resilience and low GHG emissions development, and
  • make finance flows consistent with a pathway to low GHG emissions and climate resilient development.

 

As part of the Paris Agreement, each of the parties also agrees to provide its Nationally Determined Contributions (“NDC”) every 5 years.  A party may adjust its NDC at any time to enhance its level of ambition to reduce GHG emissions.  Another significant aspect of the Paris Agreement is the commitment of developed countries to provide financial assistance to developing countries for GHG mitigation and climate change adaptation.

 

The significance of the Paris Agreement echoes throughout the recently released draft Federal Sustainable Development Strategy (“FSDS”) for 2016-2019.   Under the Federal Sustainable Development Act, the federal government is required to table a FSDS every three years.  The FSDS provides Canadians with a whole-of-government view of environmental priorities at the federal level.  The FSDS includes goals, targets, and implementation strategies across 30 federal departments and agencies.

 

The focus of the 20616-2019 FSDS is on 5 goals:

  • taking action on climate change;
  • clean technology, jobs and innovation;
  • national parks, protected areas and ecosystems;
  • freshwater and oceans; and
  • human health, well-being and quality of life.

 

The targets set out for 2016-2019 address clean technology and green infrastructure, sustainable mineral resource development, sustainable energy, protecting and restoring coastal ecosystems, and connecting Canadians with nature.

 

The FSDS sets out several goals, targets and implementation strategies specifically related to climate change.  As stated in the FSDS (page 12):

 

Fulfilling Canada’s obligations under the Paris Agreement will require action by all levels of government, and the federal government is committed to playing a leadership role in these efforts.

As a first step, the federal government will work with provinces and territories to develop a pan-Canadian climate change framework, which will include national GHG emissions reduction targets based on the best economic and scientific analysis.

While targets are essential, they are not enough: success will also require effective policies and programs to reduce emissions. Rather than imposing a single solution, the government will ensure that provinces and territories have the tools they need to design climate change policies that reflect their unique circumstances, including carbon pricing policies. The government will provide targeted funding to help provinces and territories achieve their goals.

 

The primary goal for climate change action outlined in the FSDS is to mitigate the effects of climate change, reduce GHG emission levels, and build resilience to climate change.  The FSDS identifies several targets to achieve this climate change goal:

 

  • national leadership on climate change,
  • resilience to climate change,
  • sustainable energy,
  • reduce GHG emissions from federal government operations, and
  • reduce the environmental impact of the real property portfolio held by federal governmental departments.

 

For each climate change target set in the FSDS, there are accompanying implementation strategies.   These targets and implementation strategies are meant to contribute to meeting Canada’s international commitment to reduce GHG emissions, to increase  Canadian resiliency to climate change impacts, to advance the Canadian Energy Strategy, and to increase the use of clean technologies in federal government operations.

 

The federal government is seeking feedback on the draft FSDS until June 24, 2016. There are several ways to comment:

  1. Through the 2016-2019 FSDS e-Strategy wherein every page has a comment box you can use to submit comments as you browse.
  2. Join the conversation at Let’s Talk Sustainability. Discussion questions will be posted regularly during the public consultation period.
  3. Email comments to ec.bdd-sdo.ec@canada.ca
  4. Mail your comments to:
    Sustainable Development Office
    Environment and Climate Change Canada
    200 Boul. Sacré-Coeur, 12th floor
    Gatineau, QC, K1A 0H3

 

After the consultation closes, the federal government will post a summary of the public input it has received.

The Alberta Energy Regulator (AER) has recently issued The Alberta Model for Regulatory Excellence (the “Alberta Model”).   The Alberta Model  is based upon the AER’s Best-in-Class Initiative conducted by the University of Pennsylvania through its Penn Program on Regulation to assist the AER in developing the tools and framework needed to become a best-in-class regulator (see our previous posts on this initiative here, here and here).  The AER maintains a web page dedicated to this initiative at http://www.aer.ca/about-aer/spotlight-on/best-in-class-project.

 

The Alberta Model adopts three core attributes – utmost integrity, empathic engagement and stellar competence – as being essential to regulatory excellence.  The Alberta Model defines excellence as “the means that creates a strong, fair, transparent, and inclusive regulator that delivers measurable outcomes” for Alberta (page 8).    For each of the core attributes, the Alberta Model highlights several underlying principles:

 

  • Utmost Integrity
    • accountable
    • adhering to government policy
    • identifying policy gaps
    • evidence-based decisions
  • Stellar Competence
    • Required expertise
    • Tools
    • Adapting to new risks and opportunities
    • Measurement and reporting
  • Empathic Engagement
    • Respectful engagement
    • Decisions are understood
    • transparent

 

While the Alberta Model provides a touchstone for regulatory excellence, there is still a way to go to actually achieve that goal.  As acknowledged by the AER, there are “important next steps in turning the aspiration for regulatory excellence into tangible actions.  By establishing clear outcomes, a comprehensive strategic plan, and detailed work plans” (page 8).   As the AER works toward its goal of regulatory excellence, the ELC would like to see several longstanding concerns addressed.

 

Concerns have been raised with the ability of AER (and its predecessors) to contribute to public dialogue around environmental concerns associated with oil and gas development.  Many of these concerns are discussed in the ELC’s Roadmap for Reforming “The Public Interest” for the ERCB and NRCB.  Several steps could be taken in this direction.  For instance,  the AER should move away from the historic approach limiting participation in regulatory proceedings to only those persons who are directly and adversely affected and, instead,  grant standing to participate to those parties representing a public interest (such as environmental and community groups).  More information on public interest standing is available in the ELC’s brief on Standing in Environmental Matters.

 

As well, the AER should institute mechanisms to ensure the AER is not developing its rules and policies without involvement of all stakeholders.  Further, the AER’s decision-making should clearly demonstrate consideration of social and environmental benefits alongside economic considerations.  Decision-making – both on a broad policy basis and an individual application basis – must be transparent and fully engaging of the public. The AER cannot achieve its goal of regulatory excellence without increased transparency in policy direction and decision-making.

 

We are happy to see that the AER has acknowledged its role in identifying and filling policy gaps (pages 2-3).  Past decisions by the AER – Teck Resources Limited (2013) ABAER 017 as an example –  show a reluctance to fill policy gaps that have been identified.   In that decision, the AER considered an application for oil sands evaluation well licences.  On the issue of cumulative effects, the AER acknowledged a policy gap when it noted that the disturbance limits and biodiversity management framework anticipated under the relevant regional plan had not been completed.  However, it concluded that the application should not be deferred due to this policy gap (citing the Lower Athabasca Regional Plan regulatory plan).  The AER accepted that the applicant had proposed sufficient mitigation without attempting to fill the policy gap by directly addressing cumulative effects and disturbance limits on a broader basis.

 

It seems that often the absence or ambiguity of policy direction is used to justify a “business as usual” decision rather than encouraging public dialogue on broader social or environmental issues.  As such, we agree that the AER should seek to have identified policy gaps filled by provincial decision-makers or to take leadership by creating public dialogue on those policy gaps.   In addition, our view is that it is certainly within the legislative mandate of the AER to “fill” policy gaps with its own decision-making (on both a rule and policy level and on an application basis) under section 2 of the Responsible Energy Development Act .  Without addressing policy gaps – either through policy or decision-making under the Act – the AER cannot achieve its mandate of responsible energy development.   

This is the fourth post in the Environmental Law Centre’s new blog series exploring climate change law in Canada. This blog series will provide updates on climate change law developments and will include insights from our related law reform research. This blog series is generously funded by the Alberta Law Foundation.

In November 2015, the Alberta government announced its “Climate Leadership Plan” – a plan that lays out how Alberta envisions tackling climate change in the province. The four major cornerstones of the plan are to end coal pollution, to price carbon pollution, to cap oil sands emissions and to reduce methane emissions. This blog focuses on the pricing of carbon pollution.

 

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Carbon pricing is the use of policy tools designed to lower carbon emissions. Carbon pricing tools include the application of a carbon tax (a fixed charge per tonne of emitted carbon) and the establishment of a cap and trade system (also called emissions trading). A cap and trade scheme does two things. First, it introduces greenhouse gas (GHG) emission limits or caps for specific industrial activities and facilities. Second, in case the industrial activity exceeds the emission limit, the scheme allows purchase of compliance units in order to achieve compliance with the emission limit.

While we are still awaiting details on the Alberta government’s proposed approach to carbon pricing, it is helpful to look at how other Canadian provinces are approaching it. This blog looks at British Columbia’s carbon pricing tools and legislation. BC’s carbon pricing approach uses a combination of both a carbon tax and a cap and trade regime. Its carbon tax was introduced in July 2008. Its cap and trade regime, while still a work in progress, has received new impetus by amended legislation and new carbon legislation.

In the beginning of 2016, British Columbia amended existing legislation and enacted new legislation aimed at reducing GHG emissions by putting a price on emissions. According to BC’s Greenhouse Gas Reduction Targets Act, GHG emissions will be reduced by 2020 by at least 33% compared to 2007 levels and by 2050 by 80% compared to 2007 levels. Interim reduction targets will be to decrease emissions by 2012 by 6% below 2007 levels and by 2016 by 18% below 2007 levels.

 

BC’s Carbon Tax

The carbon tax applies broadly to the purchase or use of fuels (such as gasoline, diesel, natural gas, heating oil, propane and coal) and the use of combustibles (such as peat and tires) when used to produce heat or energy. Each fuel type is taxed depending on its anticipated carbon emissions. The taxation rate for each fuel type is applied consistently throughout the province. Estimates predict that BC’s carbon tax could reduce emissions by 3 million tonnes of carbon dioxide equivalent (CO2e) annually by 2020. This is approximately equivalent to taking 800,000 cars of the roads in BC each year.

The carbon tax started on July 1, 2008 at CAD 10 per tonne and rose by CAD 5 per tonne each year to its current price of CAD 30 per tonne commencing July 1, 2012. The key element of the tax is its revenue-neutrality, which means that every dollar generated by the tax is returned to British Columbians through reductions in other taxes. For the period 2013-2014, the BC government announced it had achieved revenue neutrality.

 

BC’s Cap and Trade Regime

 In the beginning of 2016, BC started to enact new cap and trade legislation. The process is not finalized yet and some sections of acts and regulations still have to be specified and brought into force. For an overview of BC’s climate change legislation, see here. The central piece of its cap and trade legislation is the BC Greenhouse Gas Industrial Reporting and Control Act. The cap and trade scheme covers several activities and facilities such as general stationary combustion of waste, fuel combustion, aluminum production, ammonia production, cement production, underground coal mining, coal storage, coal combustion, copper/nickel melting or refining, electricity generation, manufacturing, hydrogen production, industrial operations, petroleum refining, pulp and paper production, oil and gas activities, electricity transmission, natural gas transmission, distribution, and storage and LNG activities (see the BC Reporting Regulation).

These covered activities and facilities are called “reporting operations” and must report their emissions if they are equal to or greater than 10,000 tonnes of CO2e. Regardless of this threshold of 10,000 tonnes, electricity import operation and coal storage activities are mandatory reporting operations. If the emissions are equal to or greater than 25,000 tonnes CO2e, a verification body must verify the emissions report.

Reporting operations are subject to emission limits, also known as “caps”. At the end of March 2016, the BC legislature has so far only determined the emission limit for liquefied natural gas operation to be at 0.16 CO2e tonnes for each tonne of liquefied natural gas produced. The emission limits of the other reporting operations still have to be determined in due course.

In case the regulated operation exceeds the applicable emission limit, it may achieve compliance through the use of compliance units. One option is to purchase a unit, referred to as a “funded unit”. Currently, the BC Greenhouse Gas Emission Control Regulation sets the price for a funded unit (equals one tonne of CO2e) at CAD 25. The ‘trade’ in the term cap and trade scheme refers to the purchase of compliance units to achieve compliance with the emission limits.

The cap and trade scheme also creates a carbon registry. Operators of regulated operations that need to use compliance units in order to achieve compliance with emission limits must establish a compliance account in the registry. Also, project proponents for offset projects must establish an account in the registry. Compliance with the emission limits can be achieved through the transfer and trade of compliance units with other account holders. Compliance units can also be traded through other carbon registries outside of BC, which creates the option to participate in inter-jurisdictional carbon trading, for example, with partners of the Western Climate Initiative (WCI). The current WCI partners are California, Québec, Ontario, Manitoba and British Columbia. A common framework enables WCI partners to link their trading schemes to a common carbon market. So far, only California and Québec have linked their carbon trading markets since 2013. If BC intends to join the WCI carbon market, then more specific regulations must be enacted (for example, to address the auctions of compliance units).

 

Comments

 Alberta has announced that it will use carbon pricing as part of its approach to tackling climate change. This may include a carbon tax, a cap and trade scheme, or a combination thereof. However, it remains to be seen how exactly Alberta will modify its existing carbon pricing regime. For that purpose it is always beneficial to learn from the experience of other jurisdictions. While its cap and trade scheme is still a work in progress, BC has committed to use its existing carbon tax and a cap and trade scheme in combination to address climate change.

 

As was reported last week, a large chunk of change is being sought by the Petroleum Services Association of Canada from the federal government to bolster economic activity around reclamation of well sites in Alberta and Saskatchewan.  This, as I have noted in the past, is not in line with the polluter pays principle and, while attractive in this economic  downturn, reflects a fundamental problem with how we manage the large number of unreclaimed well sites in Alberta.  Throwing public money at the problem (either directly or through tax breaks) is a convenient approach but it is also likely to allow a broken system to be perpetuated.

A core aspect of an effectively applied polluter pay principle is that the price signals attract investor and managerial attention and in turn drive due diligence in how we pursue our environmental management on a site by site basis and how we decide whether an acquisition of other property (or well) should proceed.  Throwing public money at the problem undermines this site specific drive to do better.

In the meantime we, as a society continue under rules that appear to be, as Mary Poppins (both my daughters love her) would call it, “pie crust promises; easy to make, easy to break”.  We are assured that polluters will pay for the pollution they release into the environment and yet all too often the promise appears all too easy to break:  insufficient financial security up front, insolvency laws which favour other creditors over environmental cleanup orders, and a lack of regulatory timelines on reclamation (which I would argue could also drive due diligence and minimize risks to the public purse) all reflect a system that needs fewer promises and more concrete action.

Frankly, with the “ask” of $500 million I was reminded again of Mary Poppins as I may have looked like the character of Michael Banks [below].

MBanks

“Close your mouth, please [Jason]. We are not a codfish.” Mary Poppins

Not because the money is a large sum (I suspect the nature of the problem demands more), not because I don’t believe the money would support jobs and the economy; but because we need to tackle this issue with regulations — the market approach has clearly failed, and undoubtedly will continue to do so.   We need to address it soon or we are likely to find ourselves just hiring another nanny to solve our problems. (Even Mary Poppins’ magic isn’t sufficient to clean up Alberta’s unreclaimed sites).

Update:  The Environmental Rights Act died on the order paper. A new government was elected on April 19th.).

The Government of Manitoba introduced an Environmental Rights Act (Bill 20) this Wednesday.

The purposes of the Act are to:

(a) protect the right of present and future generations to a healthy and ecologically balanced environment by the means provided in this Act;

(b) confirm the government’s responsibility to protect the environment within its jurisdiction;

(c) ensure that Manitobans have access to sufficient environmental information and effective mechanisms for participating in environmental decision-making;

(d) provide a means for Manitobans to take action to enforce environmental rights; and

(e) provide legal protection against reprisals for employees who take action to protect the environment.

The Act goes on to cite the central principles of environmental law:

  • Precautionary principle;
  • Polluter pays principle;
  • Principle of sustainable development;
  • Principle of intergenerational equity; and
  • Principle of environmental justice.

These principles will guide implementation of the Act.  As well, the Act creates obligations for the government including a requirement that all government departments must consider these central principles when “making a decision on a matter that may have a significant effect on the environment”.

The Act also creates several procedural rights for Manitoba residents.  These rights include:

  • A right to environmental information,
  • A right to participate,
  • A right to request reviews of existing law and policy or to assess the need for new laws and policies (the reviews of conducted by an environmental commissioner),
  • A right to request an investigation of a violation of an Act or regulation that “has caused or will imminently cause significant environmental harm”.
  • A right to commence an action in “court against a person who has contravene an Act or Regulation, if the contravention has caused or will imminently cause significant environmental harm”, and
  • A right to commence an action against the government for failing to enforce an Act or regulation where that failure “has resulted or will imminently result in significant environmental harm” (with the possibility of a court declaration against the government).

Other notable sections of the Act provide for:

  • The appointment of the Environmental Commissioner.
  • Whistle blower protection which prohibits employer retribution arising from its employee’s participation under the Act,
  • An agricultural activity exemption (i.e., the operation and administration of the Farm Practices Protection Act is not impacted).

Why not Alberta?
Alberta is no stranger to environmental rights.  An Environmental Bill of Rights was introduced as far back as 1978 (and 1979) and again in 1990 (and 1992).  While these Bills were not passed, Alberta has integrated some limited environmental rights into other statutes, such as the Environmental Protection and Enhancement Act, the Water Act and the Responsible Energy Development Act.

However, several aspects of Alberta’s laws require an environmental rights makeover.   Alberta needs:

  • Expansion of public/ Albertans’ rights to participate in decisions about laws, regulations, policies and authorizations,
  • Effective, third party oversight of the government implementation of its statutory duties (while the Alberta Auditor General provides some oversight,  it has an overly broad mandate with minimal resources),
  • Comprehensive whistle blower protection, and
  • Public rights to seek compliance and enforcement with legislation.

Environmental rights are central to Albertan’s quality of life, environmental justice and better decision making.  To this end, the ELC is conducting an assessment of existing environmental rights in the province to identify gaps in rights protection and to design a road map to a future which values these rights.  You can expect much more on this topic in the coming year as we seek to engage Albertans in this important endeavour.   Assuming Manitoba’s Bill is passed it will be a significant step forward in protecting the environmental rights of its citizens.  Now it’s Alberta’s turn!

 Market-Based Instruments Project Backgrounder Now Available
In Alberta, the Alberta Land Stewardship Act (ALSA) enables the use of MBIs for conservation and stewardship purposes. However, while theoretically favorable to MBIs, there is limited practical experience with these tools in Alberta.
Throughout 2016, the ELC will conduct research and analysis of the legal barriers and opportunities for use of MBIs in Alberta. We will share our findings, concluding with a published report and recommendations. Our work for this project is guided by external experts in the field of conservation and stewardship using MBIs.
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