The federal government will announce an oil and gas emissions cap framework on Thursday, a senior government official told CBC News.
Officials said the framework would be implemented through a cap-and-trade system. The draft regulations are expected to be finalized by mid-2024, one source said.
Environment Minister Stephen Guilbeault and Natural Resources Minister Jonathan Wilkinson are expected to jointly announce the cap plan. The news was first reported by the Globe and Mail and the Canadian Press.
A cap-and-trade system allows companies to buy and sell a limited number of allowances or permits. The number of these permits may decrease over time to reflect emissions caps. Another option Ottawa was considering was raising carbon prices in the oil and gas sector.
Court case forces Ottawa to reconsider emissions caps
Officials did not say where the megaton cap would be set. One source said this would fall short of the sector’s original 2030 target of cutting emissions by 42% below 2019 levels. Another source said the new plan would set a range rather than a single cap.
One source said the government is aiming to lower the target to avoid legal and constitutional disputes with the states. Guilbeault said last week that two recent court decisions that forced Ottawa to be more careful about climate policies that affect the province have forced the federal government to reconsider its emissions cap plan.
The first was a Supreme Court ruling that found federal laws governing environmental impact assessments intruded into provincial jurisdiction by applying to some projects that were supposed to be outside of Ottawa’s control.
The second is a federal court ruling revoking Environment Canada’s “hazardous” designation of all plastic products. The court said the category of plastic products was too broad for a single designation. The decision also touched on the division of powers between the federal and state states.
“The courts have told us that the federal government can certainly intervene when it comes to pollution issues, including climate pollution, but we have to be very careful not to interfere with state jurisdiction,” Guilbeault said last week. Stated.
The plan will include a number of compliance options, including purchasing carbon credits and participating in decarbonization funds. Companies will have to pay into the fund if they exceed the emissions cap. One government official said the money could be used to fund green transition projects.
Mr Wilkinson told reporters ahead of question period on Wednesday that the scheme would not be introduced immediately and the government would give industry time to adjust.
“It will take some time to implement, but greenhouse gas emissions from the oil and gas sector will be significantly reduced by 2030,” he said. He did not go into details about the plan.
Guilbeault is currently in Dubai attending the 2023 United Nations Climate Change Conference, known as COP28.
The federal government has vowed to reduce carbon dioxide emissions by at least 40 percent below 2005 levels by 2030. The federal environment commissioner said last month that Ottawa: Not on track to achieve that goal.
Alberta Premier says federal government asked him to sign NDA
Meanwhile, Alberta Premier Danielle Smith said the federal government asked her and her team to sign a non-disclosure agreement before considering a preview copy of Ottawa’s plan.
“They asked us if we were willing to sign a nondisclosure agreement and what they were going to impose on us,” Smith said in an interview on CBC News Network that aired Wednesday. power politics.
“Does that sound like cooperative federalism to you? Because it certainly doesn’t sound like that to me,” she told host David Cochran.
Federal government officials told CBC News it is normal government practice to require interested parties to sign non-disclosure agreements before allowing research into something as important as an emissions cap plan. Told.
Smith, who is also in Dubai for COP28, told CBC News she did not sign the agreement. Asked why he thought he was asked to sign the agreement, he said Ottawa “doesn’t respect our jurisdiction.”
“They should work together with us because this is very important and has a huge impact on the development of our resources,” she said.
Smith has said in the past that his government plans to oppose Ottawa’s pending restrictions. He said Ottawa’s plan won’t allow the industry to adapt in time without forcing production cuts.
One federal government official said the cap Ottawa plans to announce is “the highest amount technically achievable without impacting production.”