Lexpert Magazine

LEXPERT MAGAZINE | MAY 2018 51 | CARBON PRICING | unclear whether its plan to repurpose gas tax revenues would satisfy the federal re- quirements. Prince Edward Island and Newfoundland and Labrador plan to an- nounce their programs some time in 2018. As for Nunavut, the Yukon and the North- west Territories (the latter says its emissions will likely grow faster than anywhere else in Canada), they all agreed to work with the federal government to establish carbon- pricing mechanisms to meet the require- ments of the framework. Interestingly, some companies are not waiting for their lawyers to help them navi- gate the myriad rules, permutations and regulations as they get sorted out. In fact, says Lee-Andersen, many have already im- posed their own internal carbon pricing, some as far back as the turn of the century. "Shell started using an internal carbon price in the early 2000s," she says, adding that Suncor and Cenovus have also done the same. e Center for Climate and Energy So- lutions, in a September 2017 publication entitled "Companies set their own price on carbon," reported that "more than 1,200 companies worldwide are either pursuing internal carbon pricing or preparing to do so soon, up 23 percent from 2015." In this publication, the Center, too, cited Shell as an example. "It has used an internal carbon price of $40 to $80 per metric ton since 2000 to evaluate invest- ment decisions." As most companies that emit GHGs have accepted the inevitability of some form of carbon pricing throughout Cana- da, the issue of disclosure becomes increas- ingly important. Public companies, of course, are com- pelled to disclose their emissions, while private companies face a different obliga- tion — oen from their investors. By ad- dressing climate change, and disclosing what they're doing about emissions," says Sadikman, Canadian oil and gas compa- nies "could enhance their attractiveness and appeal to investors, a message I try to convey to clients." Lee-Andersen agrees. "I think these initiatives provide Canada with an oppor- tunity to innovate and really be a leader on these kinds of issues. Given the type of industries we have, the world really looks at us to walk the talk if you will." She also be- lieves that despite the challenges, "there are a lot of opportunities that flow from put- ting a price on carbon." Sadikman says that emissions are easier to measure in some plants than in others. "Facilities with large smokestacks have a device at the top called a continuous e- monitoring system that measures the emis- sions going through the stack and the CO2 composition. at technology has been around for a long time." Paul Manning does not see disclosure "as such a big issue. Carbon pricing has been on the horizon and companies have been required to report on carbon emis- sions for some years now. ey have had ample opportunity to plan for carbon pric- ing and the disclosure that will be required. e companies that have to worry are those who haven't been improving their carbon footprint in anticipation of regulation." Although there is no question that some politicians and industry leaders oppose any form of carbon pricing as being a cost- ly and crippling tax - the Calgary Herald said in December 2017 that the price tag for large industrial emitters would "be a total of $1.2 billion a year by 2020" - many accept that it is not only an inevitable com- ponent of doing business in Canada but the right thing to do. "Industries that are most affected by climate change policy are by and large a sophisticated group and are aware that climate change is an issue that is not go- ing away," says McInerney. "What they want is rational, fair, predictable policy and legislation that accounts for the chal- lenges they face and, above all, does not render them uncompetitive." While the federal government continues to grapple with herding the cats, it's hard to believe that some form of a national plan will not, ultimately, be arrived at in one form or another, despite the different voic- es across the country. e negotiations, to date, "have laid bare not only the complexi- ties of balancing federal and provincial in- terests while meeting our international ob- ligations, but also the varied, and at times clashing, approaches to reducing GHG emissions," says Lee-Andersen. At any time, elections and overall poli- tics in Canada and the US could play a role that might upset the carbon-pricing apple- cart. But whatever happens, and whomever comes to power, it's unlikely they'll be able to completely derail the initiative. "Dealing with carbon is the new reality," Kro says. "It's not a fashionable policy thing that will go away, regardless of what parties win elec- tions. It just can't be scrapped." Paul McLaughlin is a writer and playwright based in Toronto. PAUL MANNING MANNING ENVIRONMENTAL LAW "Not only is cap and trade not a taxation system, it is not a 'command and control' system that simply legislates emissions reduction back by sanctions. Cap and trade allows regulated parties, such as the large final emitters, to spread the pain of implementing emissions reductions through the ability to buy and sell emissions credits."

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