Cli­mate Watch NL re­port con­tained a num­ber of in­ac­cu­ra­cies

The Western Star - - EDITORIAL -

In a re­cent ar­ti­cle, The Tele­gram quoted a re­port is­sued by Cli­mate Watch NL. The re­port con­tains a num­ber of in­ac­cu­ra­cies. (“New­found­land and Labrador car­bon pric­ing plan favours oil and gas in­dus­try: Cli­mate Watch NL.”)

In par­tic­u­lar, the re­port states the oil and nat­u­ral gas in­dus­try in New­found­land and Labrador will be ex­empt from pro­vi­sions of the prov­ince’s pro­posed car­bon pric­ing pol­icy. This state­ment is mislead­ing.

The off­shore ex­plo­ration in­dus­try is ex­empt from di­rect car­bon tax­a­tion, but the in­dus­try will pay through per­for­mance stan­dards and the car­bon tax on fu­els used for non- ex­plo­ration ac­tiv­i­ties. Off­shore pro­duc­tion fa­cil­i­ties will fall un­der a provin­cially de­signed per­for­mance stan­dard sim­i­lar to the fed­eral gov­ern­ment’s sys­tem. This pol­icy is de­signed to help en­cour­age emis­sion re­duc­tions, en­able in­no­va­tion, and help pro­tect the com­petive­ness of emis­sion in­ten­sive, trade ex­posed (EITE) sec­tors such as oil and nat­u­ral gas.

Money is mo­bile – in­vestors can place their funds any­where in the world. There­fore, a ma­jor con­cern for EITE in­dus­tries is that in­tro­duc­ing high reg­u­la­tory costs in Canada could drive new growth in­vest­ment away from Canada to ju­ris­dic­tions with lit­tle to no en­vi­ron­men­tal reg­u­la­tions. This is called car­bon leak­age, which has the po­ten­tial not only to be detri­men­tal to global cli­mate change ef­forts but also will lead to eco­nomic losses for New­found­land and Labrador.

Per­for­mance stan­dards help to pre­vent car­bon leak­age while cre­at­ing in­cen­tives for in­dus­try to re­duce emis­sions. This is why many pro­vin­cial gov­ern­ments, and the fed­eral gov­ern­ment, have cho­sen per­for­mance stan­dards as the main ap­proach for manag­ing car­bon pric­ing for in­dus­trial sec­tors in Canada.

Fur­ther, the re­port pro­poses that a car­bon price should be im­posed on large in­dus­tries and in­creased over time, stat­ing, “This ap­proach will en­cour­age large in­dus­try to put ef­fort into iden­ti­fy­ing so­lu­tions to re­duce their emis­sions.” The oil and nat­u­ral gas in­dus­try is al­ready tak­ing such steps and has been do­ing so for years. The oil and nat­u­ral gas in­dus­try is com­mit­ted to meet­ing en­vi­ron­men­tal reg­u­la­tions and re­duc­ing emis­sions. Per­for­mance stan­dards al­low the flex­i­bil­ity for the in­dus­try to de­velop and em­ploy tech­nolo­gies that en­hance en­vi­ron­men­tal per­for­mance while pre­vent­ing car­bon leak­age.

Paul Barnes,

Di­rec­tor, At­lantic Canada and Arc­tic Cana­dian As­so­ci­a­tion of Pe­tro­leum Pro­duc­ers

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