Now that Russia has ratified the Kyoto Protocol, paving the way for it to come into force globally, it will be interesting to see governments that have ratified the protocol scrambling to reduce GHG emissions during the first period (2008 to 2012). Canada issued a Climate Change Action Plan back in 2002, but as Dianne Saxe writes in the latest edition of Municipal World, the country has relied mainly on education and altruism, using programs such as the One Tonne Challenge. As a result, the Canadian government expects to miss their Kyoto target by at least 60 megatonnes a year.
Saxe writes that Canada's federal system of government makes it difficult to implement international commitments. The federal Liberal government needs to negotiate with the provinces and enact legislation - a task made more difficult by its minority mandate. And some provinces are already acting on their own. Alberta, responsible for 30% of Canada's GHG emissions, "has already asserted jurisdiction over its emissions through its Climate Change and Emissions Management Act, with its own GHG reduction target and emission trading system."
Several federal departments deal with climate change, but Natural Resources Canada will regulate GHGs from the "large final emitters" (LFEs). These include companies in the oil and gas sector, electricity production, mining, and energy-intensive manufacturing. Each LFE will have to monitor and report on its GHGs, not unlike income tax reporting. LFEs will then pay the federal government in accordance with its emissions. This system will result in a market for emission reduction credits. The federal government can sell credits to LFEs, but in order to do so the government must reduce its own emissions or buy credits on the open market.
LFEs can also buy credits from those who either reduce their own emissions or who absorb GHGs through offsets. This opens the way for anyone to sell credits within Canada. Saxe quotes the municipal examples of capturing landfill gases (Winnipeg), district energy systems (Markham or Revelstoke), community-wide emission reduction plans (Edmonton), conversion of municipal fleets (Regina), and reforestation of municipal lands.
Then, once the Kyoto Protocol comes into force, this Canadian system will become part of international carbon trading through the Clean Development Mechanism (to earn abatement credits by investing in projects in developing countries) and Joint Implementation (to participate in projects with other developed nations).