N.S. lays groundwork for cap and trade system
Published Friday, September 29, 2017 6:39PM ADT
Last Updated Friday, September 29, 2017 7:11PM ADT
Nova Scotia’s Environment Minister has announced that the province will go it alone for now in creating its new carbon pricing plan.
The government has tabled amendments to the Environment Act that will allow the province to outline the details of the new cap and trade system, which is expected to be in place by late 2018.
The other Atlantic Canadian provinces have not announced plans for their own carbon pricing plans yet, though Nova Scotia’s premier says he “would be happy for other provinces to join us.”
The federal government has mandated that all provinces set a price on carbon emissions starting at $10 per tonne in 2018 and increasing to $50 per tonne in 2022.
The intent of a cap and trade system is to reduce greenhouse gas emissions by forcing companies to pay for pollution. Nova Scotia’s caps have not been set yet but Environment Minister Iain Rankin says they will be lowered over time.
The cost to consumers isn’t known and Rankin says any estimate of how much the companies may pay for carbon emissions would be “pure speculation” until the caps are set.
In Nova Scotia, cap and trade will essentially create a market for emissions allowances among the largest polluters, forcing those who exceed the cap to purchase extra allowances from those who come in under the cap.
The province says 20 companies will be mandatory participants, including Irving, Wilsons, Lafarge (the company that runs a coal and tire-burning cement plant near Brookfield, N.S.), and Nova Scotia Power. When the program launches next year, those companies will be offered emissions allowances for free by the province.
“The free allowances will allow businesses to adjust to a lower-carbon economy and drive innovation,” Rankin said, noting that allowances were given to companies for free in the European Union emissions trading system. “This way the revenue that will be coming in to government will be minimal and there will be less of a cost for businesses to start with the program.”
The NDP says that amounts to a subsidy, and says the program won’t result in a reduction of greenhouse gas emissions.
“This is letting them tread water and give subsidies to the big polluters like Nova Scotia Power,” said NDP environment critic Lenore Zann.
The Ecology Action Centre says choosing not to auction the allowances is a missed opportunity to generate revenue.
“Using that revenue to soften the blow to people who really need it, like low-income folks, and also investing in green programs like public transit and all those things that we need to actually reduce emissions,” said Wayne Groszko, the Ecology Action Centre’s renewable energy co-ordinator.
Groszko says he’s also concerned about the province’s decision to go it alone.
“A cap and trade system works best - this is proven - when it involves a larger, wider jurisdiction and more trading partners,” he said.
The government will maintain a reserve of emissions allowances that can be sold at a price higher than the market price. Officials say this helps create stability if companies need to purchase more credits. The reserve will only be in place at the beginning of the program.
Money raised from allowances sold by government and fines to companies who are not in compliance with the law will be placed in a “Green Fund,” which will be used for climate change initiatives.
“We believe that this program strikes the right balance in terms of recognizing the investments that have already been made in the electricity sector,” Rankin said. The electricity sector will make up 90 per cent of emissions in the cap and trade system.
The opposition Progressive Conservatives are opposed to any form of carbon pricing.
“The key detail we’re missing is how much is the price of gas and everyday things like home heating fuel going up?” said PC leader Jamie Baillie. “I don’t think it’s fair to bring a bill to this legislature that leaves out the most important thing people are wondering which is how much more they’re going to have to pay to live their everyday lives.”
“We’re not getting any credit for the work that Nova Scotians have done over the last 10 years at all. We’ve already met our targets. What is this bill for if we’ve already met our targets?”
Nova Scotia is the first province to reduce greenhouse gases by 30 per cent below 2005 levels, a target the federal government has set for 2030.