By Mark Lowey

VANCOUVER – British Columbia and Quebec will continue pushing to significantly reduce greenhouse gas emissions, despite the federal government pulling Canada out of the international Kyoto accord, provincial ministers told the GLOBE 2012 business and environment conference.
          Regulatory officials from California and the U.S. Environmental Protection Agency also vow to continue efforts to reduce emissions, even while acknowledging that Washington D.C. is ‘gridlocked’ on the climate change issue.
          B.C. will remain a leader on “climate action,” Terry Lake, the province’s environment minister, told a GLOBE session on “Carbon Frustration: What’s Next for Climate Policy.”
          The province’s “revenue neutral” carbon tax will increase as scheduled on July 1, 2012, to $30 per tonne of greenhouse gases (GHGs) emitted, he said.
          The tax will provide more $1.2 billion in 2013 to the provincial government, 100 per cent of which will be returned back to the economy in the form of tax reductions to taxpayers, Lake said.
          For the 2011-12 fiscal year, these tax cuts are expected to return $191 million more to taxpayers than the amount of carbon tax paid, according to the B.C. Ministry of Finance website. (See http://www.fin.gov.bc.ca/tbs/tp/climate/A2.htm).
          An independent study shows the carbon tax alone – without any additional measures – could cause a reduction in B.C.’s GHGs in 2020 by up to three million tonnes of CO2e annually, the government says. This is roughly the equivalent to the GHGs emitted by 787,000 cars per year.
          However, B.C. Finance Minister Kevin Falcon has promised a review, with public input,  of the carbon tax. The review will look at all aspects, from the tax’s revenue neutrality to its impact on the competitiveness of B.C. industries, including the agriculture and food sector which has complained that the tax puts the sector at a disadvantage.
           Lake told GLOBE delegates that all B.C. government operations now have a “zero carbon footprint.”
          The province also requires all new electricity-generating facilities constructed in B.C. to achieve “zero net” GHGs. By 2016, existing thermal generating power plants also must achieve zero net GHGs.
          B.C. also plans to reduce new electricity demand by at least 50 per cent by 2020 through energy conservation measures.
          The Western Climate Initiative (WCI), which includes B.C., Manitoba, Ontario, Quebec and California, is working on a regional GHG cap-and-trade system, James Goldstene, the WCI’s co-chair and executive officer of the California Air Resources Board, told GLOBE delegates.
          The WCI says it “has developed a comprehensive initiative to reduce regional GHG emissions to 15 per cent below 2005 levels by 2020, and spur investment in and development of clean-energy technologies, create ‘green’ jobs and protect public health. (See http://www.westernclimateinitiative.org/index.php).
          The WCI’s cap-and-trade program is scheduled to begin in January 2012, with a three-year compliance period, and initially involve about two-thirds of total emissions in the WCI jurisdictions. When the program is fully implemented in 2015, it will cover nearly 90 per cent of GHG emissions in WCI states and provinces. (See http://www.westernclimateinitiative.org/the-wci-cap-and-trade-program).
           Pierre Arcand, the Quebec government’s minister of Sustainable Development, Environment and Parks, told GLOBE delegates that his province is on target is to reduce GHG emissions by 20 per cent below 1990 levels by 2020.
           That is much more ambitious than the Harper government’s target to reduce Canada’s GHGs by 17 per cent below 2005 levels by 2020.
           The leaders in taking action on climate change aren’t the national governments, Arcand said, adding it was “very frustrating” that the federal government last year officially withdrew Canada from the Kyoto accord.
           Panelist Henry Derwent, president and CEO of the International Emissions Trading Association based in Switzerland, noted that some scientists are now worried about a 4-degree C increase in average global temperature by the middle of this century.
           If that happens, some businesses are saying that they won’t have a business anymore, he said.
           Despite the risks, “you can’t even mention the phrase ‘cap-and-trade’” in Washington, D.C., where climate change action is stalled at the federal level, Derwent said.
           In contrast, the Chinese are moving quickly to implement emissions trading to meet their country’s pledge to reduce emissions, he said.
           The Asian Development Bank has helped set up a pilot emissions-trading system in China that could pave the way for a national effort to lower GHG emissions, according to a news report by Enterprise Innovation. (See http://www.enterpriseinnovation.net/content/adb-sets-carbon-emissions-trading-system-china).
           Internationally, however, China recently banned its airlines from paying a charge on carbon dioxide emissions imposed by the European Union, without permission from the Chinese government. (See http://www.ens-newswire.com/ens/feb2012/2012-02-06-01.html).
           Gina McCarthy, assistant administrator in the U.S. Environmental Protection Agency’s (EPA) Office of Air and Radiation, told the GLOBE session that President Barack Obama and the U.S. federal government executive branch are trying to move forward with reducing GHG emissions in the nation.
           However, it is typical in the U.S. that such actions are first taken at the grassroots level, which then drives states, followed by regions, and then the federal government, she said.
           Carbon is now categorized as a pollutant under the U.S. Clean Air Act, which means the EPA can now regulate GHG emission reductions, McCarthy said.
           The EPA has a new Greenhouse Gas Reporting Program (http://www.epa.gov/climatechange/emissions/ghgrulemaking.html) and will soon have a new carbon pollution standard (http://www.epa.gov/airquality/cps/settlement.html) for new power plants, she added.
           Climate change is unlike any other issue society has faced, because taking action amounts to a challenge to being able to grow national economies based on the continued use of fossil fuels, McCarthy said.
           Instead of complaining about inaction, “Stop global warming and do it by stopping global whining,” McCarthy said.
           GLOBE delegates in their questions to the panel raised concerns about the “fractured” policy approach to reducing GHG emissions.
          A Taiwanese delegate questioned how rigorous the auditing of emissions reductions is on a national level; he pointed out the lack of penalties for poor or outright fraudulent auditing.
          Derwent responded that there are a lot of different metrics currently being used by various countries to measure their emissions reductions, and these metrics need to be harmonized.
          But in the absence of a global system, arriving at an internationally agreed way of measuring, reporting and auditing GHG reductions might take a World Trade Organization dispute to sort out, Derwent said.
          Meanwhile, the financial damage due to several weather events around the world is increasing, GLOBE delegates heard at a separate session on “Climate Adaptation: Building Resilience Through Risk Management & Insurance.”
         Convective storms are now the most common cause of property damage, Robert Wesseling, executive vice-president and chief operating officer of The Sovereign General Insurance Company in Canada, told the session.
         That causes volatility in the insurance industry and results in higher premiums for consumers, he said.
          Noting that flood insurance for homeowners is not available in Canada (the only G8 country where it is not), Wesseling said that the insurance industry needs to find ways to provide adequate insurance for severe weather events.
          But society also needs to invest in technologies that produce houses and other buildings that can withstand such storms, Wesseling added.
          Mark Way, head of Sustainability Americas for global reinsurer Swiss Re North America in the U.S., told GLOBE delegates that the developing world is the most exposed to the risks of climate change-related damage, with some 3.4 billion people exposed to potential severe weather events.
          Yet there is not nearly as much insurance “penetration” in the developing world, compared with developed nations, to cover those risks, he said. Public-private partnerships are needed to provide adequate insurance coverage to the developing world, he added.
          If your business is insured, it gives you a better credit rating because you have the financial wherewithal to replace your business if it’s destroyed by severe weather, Way noted.
          Panelist Jeff Williams, director of climate consulting for Entergy Corporation in the U.S., said that many in the energy industry is increasingly viewing the risks of climate change through the “lens” of catastrophic storms, such as hurricanes Katrina and Rita in 2005.
          Entergy, an integrated energy company, owns and operates power plants with approximately 30,000 megawatts of generating capacity. The company is the second-largest nuclear generator in the U.S.
          Hurricane Katrina is the costliest natural disaster, as well as the one of the five deadliest hurricanes, in U.S. history. Property damage was estimated at US$81 billion (2005 US dollars).
          Hurricane Rita caused an estimated US$12 billion in damage on the U.S. Gulf Coast, through which more than half the energy supply in the U.S. moves.
          The risk is growing of severe storms that can cause US$150 billion in damage, Williams said, adding: “The good news is that a lot of these risks are solvable” by taking actions such as building more resilient communities.
          Entergy doesn’t ask its customers to “believe in climate change,” but rather to approach the issue as a “risk management problem” by asking themselves how they would fare in a devastating weather event, Williams said.
          Sarah Potts, Los Angeles City director of the Clinton Climate Initiative/C40 Cities Leadership Group, told the GLOBE session that Los Angeles is “already impacted by climate change” and is having to adapt.
          The city has started a study on expected sea level rise and due to climate change and the potential impacts, she said, noting that Californians already experience coastal roads washing out and huge fires in the state.
          Panelists said that the challenge for the insurance industry is to be able to better link the modelling of insurance losses to climate change models, to identify cost-effective, risk-reducing measures that can be taken now based on the likely scenarios and risks. EnviroLine