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Outcomes of IISDWRI CrossBorder Emissions Trading Workshop

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Title: Outcomes of IISDWRI CrossBorder Emissions Trading Workshop

1
Outcomes of IISD/WRI Cross-Border Emissions
Trading Workshop

2
Workshop Overview

Planned in collaboration with the World Resources
Institute
Funded by B.C., Alberta, Ontario, Quebec, Nova
Scotia, Environment Canada and two U.S.
foundations
Attracted 30 participants from provincial, state,
federal governments and international experts on
linking emissions trading systems
Background paper, presentations and workshop
overview paper available

3
Current Context

North American regional initiatives continue to
evolve rapidly.
Climate change an issue in U.S. presidential
nomination races.
Multitude of climate plans or legislation
emerging from federal, state and provincial
governments.
Regional initiatives had strong presence in Bali.

4
Current Context

North American energy picture is rapidly evolving
with an increasing reliance on Canadian resources
(oil, natural gas, hydro) to address energy
security needs
All oil exported from oil sands is for the
American transportation industry

5



6
.Energy Trading a growing relationship

The United States is Canadas major trade market
for energy products, accounting for 99 (84.8
billion) of all Canadian energy exports for 2006
up from 50 billion in 1990
Some with different climate change implications.
Canada exported 36.0 billion of natural gas to
the United States (100). In volume terms, Canada
accounted for more than 85 of U.S. gas imports
and had a 16 share of the U.S. market.
Electricity exports, mostly sourced from hydro
represented some 3.1 billion in sales.
than others
Exports of crude oil were 1 578 000 barrels per
day in 2005, valued at 29.9 billion. More than
99 of these exports were U.S.-bound. Canadian
crude oil held an 11 share of the U.S. market in
2005 and accounted for more than 16 of U.S.
crude imports.

7
Context

Canadian provincial and federal actors all
strongly interested to coordinate with US
initiatives
Not as clear if this has the attention of US
actors (exception of Schwarznegger)
Clearly led from the top
Bureaucrats all scrambling around what does it
all mean and how to coordinate?
Implications for linking with EU ETS?

8
Six Workshop Objectives

Summarize political context at federal and
state/provincial levels with focus on cross
border linking opportunities and regional
initiatives.
Discuss emerging systems for quantification,
registration and verification of emission
reductions in North America and potential for
linking.
Examine developing ETS in North America and
potential for linking.

9
Six Workshop Objectives

Consider variables, incompatibilities and
emerging issues associated with linking regional
ETS.
Identify information and design gaps and
potential linkage scenarios advance research and
policy thinking on linking.
Discuss areas for further consideration related
to U.S.-Canada program linkages.

10
Options and Issues Discussed

11
Issues Identified

Offsets as a common currency for linking
Are offsets a useful first step towards linking,
or are they likely the last link to consider?
Are there any substantial technical barriers to
developing offsets as a common currency, or only
political barriers?
Might registries offer an opportunity to start
working towards common standards (e.g., The
Climate Registry)?
Could a common approach to accounting and
monitoring/verification standards be developed?

12
Issues Identified

Ensuring Integrity
Are there significant political sensitivities
regarding accounting/reporting decisions?
Which methodologies or protocols can we already
agree on?
Precedents are being set to what degree are they
being heeded?

13
Issues Identified

Maintaining Linkages Over Time
Dont forget your prenups! What are mechanics of
de linking
What are the administrative costs of monitoring
not only your partners systems but also the
programs with which they are linked?

14
Next Steps for Consideration

Offsets as a common currency to linking
Discuss a potential protocol for incorporating
offsets into a common registry.
Resolving Differences in Stringency Lessons from
the EU
Conduct a survey of states and provinces to
determine their deal-breakers (and
deal-makerswhat criteria are most important to
consider linking to another trading system)
regarding linking.

15
Next Steps for Consideration

Ensuring Integrity
Assess accounting/reporting elements or capacity
issues that need to be addressed to ensure
integrity?
Maintaining Linkages Over Time
Consider how programs might monitor the web of
other systems with which they are linked.

16
Three Other Critical Considerations

Participants indicated that there is also a need
to
More clearly articulate the benefits of linking
and address the many issues of concern at the
local political level.
Address technical issues through the development
of model rules for certain elements of linking
agreements.
Gather specific program design details, data and
analyses to provide policy makers with a basis on
which to evaluate the implications of linking
trading systems.
The equiavalency wrinkle in the Canadian federal
system.
Federal natures of respective governments may
mean very different futures for reg systems.