Canada and the Road to Paris

Lisa (Elisabeth) DeMarco

Zizzo Allan DeMarco LLP

lisa@zadllp.com

+1.647.991.1190

Overview

• The road travelled:• Changing international and NA context• The relevant energy context

• The road ahead• Behind and inside the October draft Paris text• Canada at the COP and future CMAs

• The critical role of “infranationals”

Changing International Context

• Science: IPCC 5th Assessment Report • Extreme Weather• G77, US-China, and TPP• Carbon Pricing• Renewables • Energy:

• coal• oil• pipelines• social license

Carbon Pricing - International

World Bank Group, State and Trends of Carbon Pricing 2015.

Canadian GHG Emissions from Energy Production

Environment Canada, National Inventory Report: Greenhouse Gas Sources and Sinks in Canada, 1990-2013.

GHG CategoryEmissions (MT CO2e)

Stationary combustion sources  

Public electricity and heat production

88

Petroleum refining industries 18

Mining and upstream 94

Manufacturing industries 46

Construction 1

Commercial & institutional 29

Residential 46

Agriculture & forestry 4

Total Stationary Sources 325

Transport 204

Fugitive sources 59

TOTAL 588

Energy Production 2013 GHG Emissions

Canadian and US GHG Emissions by Sector

Environment Canada, National Inventory Report: Greenhouse Gas Sources and Sinks in Canada, 1990-2013.

U.S. Environmental Protection Agency, Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990-2013.

Canadian Emissions by sector

9%

12%

21%

27%

31%

Agriculture

Commercial & Residential

Industry

Transportation

Electricity

Total: 6,673 MT CO2e

U.S. GHG Emissions by Sector

The Road ahead for Canada, Paris and CMA 1?

• The Canadian dilemma – perception, reality, credibility

• Splinter of the Umbrella Group• The critical role of sub/infra nationals

• ON, QC, CA (WCI) and BC• CA in WCI and US CPP(?)

• The cost• Key issues to follow in Paris

Government of Canada, Oil Sands: A strategic resource for Canada, North America and the global market (2013).

United States Environmental Protection Agency, Facility Level Information on Greenhouse Gases Tool.

Annual emissions from the oil sands (55 MT CO2e in 2014) are less than the combined annual GHG emissions of the top three highest-emitting coal-fired power plants in the USA.

• US total: 6673 MT; Target: 26-28% below 2005 by 2025

• Canada total: 726 MT; Target: 30% below 2005 by 2030

• Mexico total: 748 (503); Target: 25% below BAU by 2030

• China total: 9019; Target: 60-65% below 2005 by 2030

The Canadian Dilemma

World Bank Group, State and Trends of Carbon Pricing 2015, as modified by ZAD LLP to reflect CPP

Carbon Pricing - North America

*US Clean Power Plan, Final Rule Aug. 3 2015*

Electricity Sector Emissions Intensity

Quebec

Manitoba BC

Ontario

California

New Jerse

y

New York

Illinois

Pennsylva

nia

Minnesota

Texas

Michigan

Saskatch

ewan

Alberta

Indiana0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1

CO2 Intensity (tonnes/MWh)

Based on best available data reflecting 2012 for Canada (Environment Canada) and 2011 for US states (U.S. Energy Information Administration).

Electricity Prices, Canada and US

Hydro Quebec, Rate Comparison for Rates Effective April 1, 2014.

U.S. Energy Information Administration (YTD October 2014). Prices converted at an exchange rate of $0.85 USD = $1 CAD.

Quebec

British

Columbia

Alberta

Saskatch

ewan

Nova Sco

tia

Ontario

Maryland

Wisc

onsin

California

New Hampshire

Vermont

New York0

5

10

15

20

25

Residential All-In Prices, Canada and US (CAD ¢/kWh)

Key Issues in Paris

• Legally binding nature:• “contribution” or “commitment”• NAPs• Third party review and ongoing NDCs (every 5 years?)

• Treatment of:• Developing countries – common but differentiated?• Fossil subsidies• Timing and degree target

• Role of markets