Little choice but to follow suit

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Dianne Saxe discusses the options available to Ottawa and the provincial governments when it comes to climate change legislation. Here’s what she has to say about Ontario’s current situation:

“Comments on Ontario’s cap and trade plan are due in three weeks, on July 24. However, the policy context has changed dramatically since Ontario’s discussion paper was drafted, and is continuing to mutate quickly. Canada has done so little for so long that our climate policy has laid us wide open to the serious protectionist provisions in the 1500 page US House of Representatives Bill HR 2454, the American Clean Energy Security Act. That likely means that Canadian rules must match American ones.”

As we’ve already discussed here, the U.S. bill calls for reducing our Southern neighbour’s greenhouse gas emissions by 80 per cent by 2050. It also includes a cap and trade system, and a requirement that utilities get at least 15 per cent of their electricity from renewable fuels.

More worrying for Canadian companies, the bill targets a range of sectors from the cement industry to steel producers and could end up giving the U.S. government the power to block the entry of energy intensive imports from countries that do not meet U.S. standards. With these proposed border adjustments and the prospect of other countries imposing carbon tariffs, Canadian exporters will have no choice but to come up with effective carbon reduction strategies to stay competitive in their industry.

First and foremost though, Canada will have to ensure that its targets, enforcement mechanisms and its reporting rules are consistent American ones.

The interplay between climate change and trade issues promises to be a hot topic in the years ahead.