New Brunswick has introduced legislation to amend its Climate Change Act and released a draft regulation under that Act. Together, they will implement an output-based pricing system for carbon emissions from large emitters that the federal government has agreed to accept as an alternative to the federal backstop. The new system will be deemed to have taken effect January 1, 2020, making it applicable to 2020 emissions.
Bill 2, the Climate Change Amendment Act, received first reading in the Legislature on November 18, 2020. The accompanying regulation, the Draft Reduction of Greenhouse Gas Emissions Regulation, is open for public comment until December 8, 2020 via e-mail to NBOBPS-STFRNB@gnb.ca.
Under the new provincial system, emitters of 50,000 tonnes or more of greenhouse gases per year will be required to reduce their emissions intensity by 10% by 2030. The minimum reduction is one percent per year. Emitters that fail to do so may comply by purchasing offset credits, performance credits from other regulated emitters, or through payment into the climate change fund at a rate of $30 per tonne in 2020, rising to $50 per tonne in 2022.
Facilities that emit 10,000 but less than 50,000 tonnes of greenhouse gases may opt-in to the system.
New Brunswick had long complained that the federal backstop mechanisms put the province at a disadvantage because of its high trade exposure and early action. In June 2019, New Brunswick reported that its emissions were already 28% below 2005 levels, putting it well on track to meet the federal reduction target of 30% below 2005 levels by 2030.
Earlier in 2020, New Brunswick raised its tax on fossil fuels, but partially offset the increase by cutting taxes on gasoline and diesel, in order to earn exemption from the federal backstop carbon tax. With the amended Climate Change Act and the new regulation, New Brunswick will be fully exempt from federal carbon backstop provisions in the federal Greenhouse Gas Pollution Pricing Act.