Nova Scotia has introduced amendments to its Environment Act as Bill 15 that will allow the province to implement a cap-and-trade program for greenhouse gases (GHGs) in time to meet the federal 2018 deadline.
The actual design of the system will be set by regulations, leaving critics to believe that Nova Scotia intends to proceed with the system proposed in its March 8, 2017 discussion paper, “Nova Scotia Cap and Trade Program Design Options” — a system that would do the bare minimum needed for the province to comply with the Pan-Canadian Framework on Clean Growth and Climate Change.
“A carbon pricing system that doesn’t actually put a price on carbon, support low-income people, or incentivize clean growth truly misses the point,” said Stephen Thomas, energy campaign coordinator with the Ecology Action Centre, in a release. “Unless something changes, we feel that the federal government should consider rejecting this system.”
Nova Scotia seems prepared to cash in on investments in GHG-reduction made over the past decade. In large measure thanks to a decade-long shift in electricity generation from coal to renewables and the promotion of energy efficiency, Nova Scotia’s GHG emissions today are already 30% below 2005 levels — the 2030 target set by the Pan-Canadian Framework.
Additional measures scheduled to be implemented in the coming years should bring Nova Scotia in at 45% below 2005 levels come 2030. Nova Scotia doesn’t need a cap-and-trade program to cut its emissions, and its discussion paper proposed a system that should place no additional burden on businesses or consumers.
The discussion paper outlined a program that would be mandatory only for emitters of 100 Mt of GHG or more, as well as the electricity sector, petroleum product suppliers that sell more than 200 litres of fuel per year and natural gas suppliers. Allowances would be distributed without charge. The program would capture approximately 90% of Nova Scotia’s emissions, but regulated emitters would number no more than 20.
Regulations will allow for a small number of allowances to be put into a strategic reserve, to be sold if necessary to maintain market stability. Funds generated from any sale would be dedicated to a Green Fund that would be used to support GHG-reduction efforts and cushion any impact of the modest cap-and-trade program.
The discussion paper stated that trading would be confined to Nova Scotia only, but Bill 15 doesn’t slam shut the door to the province joining a larger market, such as the Western Climate Initiative or a regional market in Atlantic Canada.
“A larger system can be more effective by allowing trading between more emitters, and by sharing regulations that have been built over years,” said Wayne Groszko, renewable energy coordinator with the Ecology Action Centre, in a release.