Obama election will have impact on Canadian environmental policy

The impact of an Obama election on environmental issues has been a hot topic of discussion in the past weeks. While many of the details of Obama’s policy positions remain to be seen, some of what is already know will surely have an impact on their neighbour’s up north:

1. For starters, Obama has indicated that the environment will be a priority issue. This is in sharp contrast to the previous administration. This alone means environmental issues will have much larger visibility which makes it more difficult of the Canadian government to continue to waffle on climate change policies

2. While Obama does not favour a full implementation of Kyoto, he has come out more favourably in support of absolute cap and trade systems versus the intensity-based Canadian approach. He has also clearly indicated that the cost of environmental measures must be balanced against economic realties – a position shared by the Harper government.

3. The most promising idea in Obama’s environmental approach is the promise to catalyze investments around the development of new clean energy sources and environmental technologies. If market activity picks up in this area, the transformation of the economy that it is likely to bring will surely also attract the attention of the closely related Canadian market.

Hydro-Québec Proceeds with Largest Wind Power Initiative in North America

Hydro-Québec announced this week the approval of one of the largest wind power initiative in North America. The project will supply over 2000 megawatts of electricity that will come on-line between 2011 and 2015. The project will require capital investment of $6.7 billion involving 8 different project developers and 15 wind sites.
Equipment will be supplied by Enercom GmbH and REpower Systems AG with Hydro-Québec favoring these larger more established suppliers versus newer companies such as local startup AAER.

This project is without question a huge boost to wind power and will greatly advance Quebec’s knowledge base in this area. The GHG reduction benefit is not as clear though. Quebec’s hydro-based electrical grid already has the lowest GHG emission factor in North America. Add to this the fact the hydro supply is plentiful, with Hydro-Québec currently a net exporter of energy, and the need for this alternative energy project is less evident. It can be argued that the clean energy can be exported will replace coal-fired energy is the Northeast. This is true but this hardly benefits Quebec in meeting its GHG objectives.

Here the Hydro-Québec press release and the breakdown of the 15 projects.

http://www.hydroquebec.com/4d_includes/of_interest/PcAN2008-053.htm

MAP

Table of Projects

The Bio-Fuel Myth

A recent article in Time magazine has caused some controversy by suggesting what has now become evident for quite some time. Bio-fuels such as corn based ethanol are by no means a solution or even a contributor towards a solution for solving climate change. Amongst the most interesting aspects of the article is not only the impact of biofuels on driving up food costs but also the fact that the rise of bio-fuels has led to the destruction of huge rainforest carbon sinks that are being converted to agricultural crop for biofuel.

Here are some other interesting facts :

365 – The number of days one person can be fed on the corn needed to fill an ethano-filled SUV.
300,000 – Dectare of Brazilian rain forest list in the last six months.
20% - The reduction in traditional fuel consumptions that can be achieved even if the US diverts 100% of its corn and soybean crops to biofuels
800 million – Number of people with cars worldwide
800 million – Number of people with hunger problems worldwide.

The full article appeared in this issue:

http://www.time.com/time/covers/0,16641,1101080410,00.html

Canada's Regulatory Framework for Emissions Reduction

The government of Canada released on March 10 the long-awaited details on a proposed regulatory framework to achieve emission reduction of 18% by 2010.

The development is a welcome step forward that pushes us closer to the establishment of a more robust cap a trade system. In their announcement the government of Canada explicitly recognized:

• The need to establish a clear market price for carbon


• The need to set up a carbon emissions trading market, including a carbon offset system, to provide incentive for Canadians to reduce their greenhouse gases.

The government also renewed its commitment to do more in the energy sector promising to setup a taskforce to like at hydro, nuclear and renewable energy sources.

In a clear disappointment to some observers, the government shied away from committing to hard emission caps favoring instead an emission intensity approach which ties emission to quantity of units of production. Also requirement for carbon capture and storage from the oil sands will only apply to operation starting in 2012 on-wards.

The full text of the press release can be found here:

http://www.ec.gc.ca/default.asp?lang=En&n=714D9AAE-1&news=B2B42466-B768-424C-9A5B-6D59C2AE1C36

The full text of the regulations themselves will not be published until later this year and will only be finalized in 2009.

Montreal Climate Exchange to launch May 30th

The Montreal Exchange announced on Mar 14th its intent to launch on May 30th the Montreal Climate Exchange, a joint venture with the Chicago Climate exchange.

The Montreal Climate Exchange has been an on-again off-project in the works since at least 2 or 3 years. The recent Government of Canada announcement a few days earlier re-enforcing its commitment to carbon trading finally pushed this project into the reality zone.

The Montreal Climate Exchange will offer trading in carbon futures emissions. This will in turn allow member companies to offset their carbon dioxide emissions by buying credit from other companies.

The launch of the exchange is a key step towards the establishment of a robust cap-and-trade system in Canada.

Here in the Montreal Exchange press release.

http://www.m-x.ca/f_comm_press_en/12-08_en.pdf