B.C. far ahead of federal government in global carbon-trading market

JUSTINE HUNTER
Globe and Mail
October 30, 2007

VICTORIA -- Whether it's a carbon tax, carbon caps or carbon trading, British Columbia is increasingly leaving Ottawa behind on the climate-change file.

And that gap is creating alarm for business as it grapples with the prospect of conflicting regulatory requirements at the federal and provincial levels.

B.C. Premier Gordon Campbell was in Portugal this week, where he signed on to an international accord to promote a global carbon-trading market, once again side-stepping Stephen Harper's government.

"Ottawa's been pretty good," Mr. Campbell said in a telephone interview from Lisbon yesterday. "We told them we were coming here and they were certainly in no way resistant." Print Edition - Section Front

The Premier was the only Canadian on hand to sign on to the International Carbon Action Partnership, which aims to create a global market for buying and selling greenhouse-gas emission rights.

The global carbon-trading scheme also has buy-in from Manitoba, but the federal government, which is promoting a trading system that would stop at Canada's borders, wasn't invited.

That's not the only point of divergence between Mr. Campbell's climate-change agenda and the one being developed in Ottawa.

B.C. has floated the idea of a carbon tax on pollution and promised a hard cap on industry greenhouse-gas emissions, in both cases heading toward a significantly different regulatory regime than the one touted in Ottawa.

"The opportunity for a coherent Canadian approach has been lost, at least in the short term," Jock Finlayson, chief economist for the B.C. Business Council, said yesterday. "It's very clear B.C. is going it alone."

A senior economic analyst on the climate-change file warned that Ottawa is falling behind the provinces as it pursues its own agenda.

"We have disharmony between what is being done at the provincial level and what's being mandated by the federal government and it's causing problems," said Christine Schuh, Canadian climate-change services leader for the consultants PricewaterhouseCoopers LLP. "The provinces are just moving ahead."

The federal New Democrats say the patchwork of regulatory regimes emerging in Canada is destined for failure.

"Gordon Campbell going to Europe is going around Ottawa because of the lack of leadership," NDP environment critic Nathan Cullen said. "It might be a noble effort but it ultimately will be a failure, because Ottawa needs to be involved. We need national targets and federal leadership."

While Mr. Campbell did not criticize Ottawa's agenda, he said it makes sense to push for an international carbon market. Speaking to the Lisbon summit, Mr. Campbell said greater co-operation between nations is needed to tackle climate change.

"We've seen that often by taking the first steps in action, we build a critical mass of support and of change that is so critical to the future," he said.

But Ms. Schuh said co-operation needs to start in Canada.

"We have inaction from the federal government and a lot of pressure from the public to do something," she said. Business is "understandably confused, they are getting different targets, and meeting one compliance target doesn't mean they will meet another."

B.C.'s targets - to cut one-third of the province's carbon footprint by 2020 using a fixed cap on industry emissions - are tougher than the federal proposal to have certain heavy industries reduce the intensity of their emissions by 18 per cent by 2010.

But Mr. Finlayson said Ottawa should be given credit for at least putting its framework on paper, while most of B.C.'s commitments are still being worked out. "There's an amazing lack of documentation from the province," he said.