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Cap-and-trade on back burner

Manitoba takes wait-and-see approach

Six years ago, then-Manitoba premier Gary Doer escorted Arizona governor Janet Napolitano and British Columbia premier Gordon Campbell to Churchill to witness the effects of climate change first-hand, and the three pledged to work on a regional cap-and-trade system to curb greenhouse gas emissions.

Only B.C., which created a carbon tax a year later, has come close to fulfilling that promise.

Now, Manitoba has quietly stepped back from the regional cap-and-trade system it helped design, saying there is a lot more homework to be done before the province can consider moving ahead.

UNDER a cap-and-trade system, the government sets a limit on the maximum amount of greenhouse gases an industry is allowed to emit. Companies get permits that detail their cap. If a company emits less than its cap, it can sell its leftover allowable emissions to another company that may have exceeded its cap. Or, a big emitter can buy offset credits if it, for example, plants trees or restores wetlands. Cap-and-trade is a tricky business. It's difficult to determine what industries must comply, what their emissions caps ought to be, how much trading is allowed, what credits cost and myriad other issues. After years of research and negotiations among 11 states and provinces, the Western Climate Initiative had largely answered those questions.



What about a carbon tax?

CONSERVATION Minister Gord Mackintosh has kiboshed the idea, but some Manitobans favour a straight-up carbon tax over a complicated cap-and-trade system. That's according to documents released by the province through access to information.

Two years ago, when Manitoba was still actively involved with the WCI, the province launched public consultations on the idea. More than 50 individuals, companies and advocacy groups offered their opinion. Responses were lukewarm to the WCI, but several called on the province to explore a tax on every tonne of emissions instead of a cumbersome, costly cap-and-trade system that could be rife with loopholes and technical issues.

"We have never been interested in a carbon tax," Mackintosh said.

Manitoba is still technically a full partner in what's called the Western Climate Initiative but has no immediate plans to join California, Quebec and, possibly, B.C. in actually launching the program, capping emissions and asking industry to trade credits.

Instead, the province is taking a wait-and-watch approach, said Conservation Minister Gord Mackintosh. He said cap-and-trade remains "a live option," but more work must be done.

That work includes properly pinpointing Manitoba's emissions for the first time through a mandatory reporting scheme now in the works and doing some economic modelling to determine the winners and losers in a cap-and-trade system.

"It's a big policy move. It's huge," said Neil Cunningham, director of the province's climate-change branch. "It's asking a lot from industry, and we want to make sure we're not putting burdens on them that are too onerous."

Debate over climate change is about to heat up in Manitoba and internationally. In the next few weeks, Manitoba will begin consultations on its next climate-change action plan, including what emissions targets ought to be set. That follows the failure of the province's original climate-change plan, which pledged to reduce emissions to Kyoto levels and touted Manitoba's involvement in the WCI.

And, later this week, the Intergovernmental Panel on Climate Change will release its latest report on the science and effects of global warming, expected to be a blockbuster.

Ian Bruce, science and policy manager at the David Suzuki Foundation, said that report, plus California's launch of the WCI's cap-and-trade system, ought to kick-start Manitoba into bolder action.

"Manitoba may find itself wanting to be part of the solution rather than sitting on the sidelines," said Bruce.

Manitoba is not alone. Of the 11 original members in the WCI, most have so far opted out.

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