Premiers talk climate
Premier suggests N.L.’s lack of diversification currently a factor
N.L. premier Paul Davis is at the Quebec summit.
There is a carbon tax in British Columbia, a cap-and-trade system in Quebec and, as announced this week, Ontario has jumped into the cap-and-trade boat. So the question is: when will carbon pricing come to Newfoundland and Labrador?
Speaking by phone from Quebec City, where he was taking part in the Quebec Summit on Climate Change, Premier Paul Davis said there is no decision on when or how this province might introduce a carbon pricing system, to spur reduction in greenhouse gas (GHG) emissions.
“I see the value in having a price and a value put on carbon. There is a value in doing that,” he said. “There’s many ways to do it. We haven’t settled on which approach we’re taking.”
He made no commitment to any timeline for bringing in a carbon-pricing system.
“We have to continue to grow an economy and we have natural resources that are in demand in the world. So we have a circumstance in our province, Newfoundland and Labrador and Alberta, both provinces, about 50 per cent of the GHG emissions are created by industry,” he said.
“The difference for Alberta versus Newfoundland and Labrador: we just have a handful of industries that create that 50 per cent of the industrial usage.”
He listed off some of the larger contributors. The province’s offshore oil projects were at the top of the list.
“We have one of only two iron ore pelletizers in the country — the larger of the two — and we know how hard iron ore production is today,” he added. “So we know the industry itself faces its own challenges in order to continue to operate.
“We have an oil refinery that’s unique. It’s the only oil refinery in Canada that doesn’t have a source of natural gas for its own operations within the refinery and that creates increased greenhouse gas emissions.”
Under a carbon cap-and-trade system, a hard line is taken on how much a sector of the economy might produce in the way of GHGs, with companies issued permits at cost for their emissions.
Any companies taking action and producing less can sell their remaining carbon-emission capability to others.
Media reports have estimated the system could raise $1 billion to $2 billion per year for Ontario, although there was no specific figure issued as part of the relevant announcement this week.
Another system, employed in British Columbia, is a more di- rect carbon tax, amounting to roughly an extra seven cents a litre on gasoline in that province.
You’ll pay a higher tax for fuels resulting in greater carbon dioxide emissions, but less for fuels such as propane and natural gas.
Newfoundland and Labrador does have provincial GHG emission targets, set in 2001. An early target was to reduce emissions to 1990 levels by 2010.
That goal was met. The next target is to reduce emissions to 10 per cent below 1990 levels by 2020.
The provincial government says it is working to meet that target by re-investing non-renewable resource revenue into renewable power developments.
The 824-megawatt Muskrat Falls hydroelectric project, as a main exhibit, will put an end to an estimated 1.2 million tonnes of GHG emissions annually from the oil-burning power plant at Holyrood.
It will, as Davis has highlighted, make the province’s power system more than 98 per cent greenhouse gas-free.
That said, in its Climate Change Action Plan of 2011, the government said new oil developments such as Hebron and the anticipated growth — at least as expected at that point — in mining could lead to the province not meeting its next target, ending up with a rise in GHG emissions instead.
In response, the province said it would push greater energy efficiency, but stopped short of more aggressive actions.
The same plan from 2011 stated: “the (Intergovernmental Panel on Climate Change) has found that the cost of reducing emissions is significantly less than the cost of responding to the adverse impacts associated with climate change.
Moreover, independent think tanks, like Canada’s National Roundtable on the Environment and Economy, maintain that delay in taking action to reduce emissions increases the overall cost of meeting GHG reduction targets by locking in less efficient capital stock and creating uncertainty for businesses which may delay their investment in new, energy-efficient equipment.”