Environment Minister Steven Guilbeault has seemingly held out a long awaited ‘carrot’ on Article 6 of the Paris Accord while holding on to a ‘stick’ over oil and gas “subsidies.”.The carrot relates to Article 6 of the Paris Accord which allows countries to claim emissions credits for helping other countries reduce theirs — by displacing coal fired power with Canadian sourced LNG, for example..The Western Standard put the question to Guilbeault following the the international LNG conference in Vancouver last week, where Premiers Smith and BC’s David Eby agreed to find ways to cooperate on leveraging exports of clean burning natural gas through West Coast ports..Guilbeault was in Belgium at the time, meeting with his counterparts from China, India and the EU to lay the groundwork for the COP 28 summit in Dubai this November..Following a media availability via Zoom, his department promised to get back to this reporter with a “substantive” response. .And despite some back-and-forth email exchanges, they did exactly that on Tuesday with a lengthy — and one might say, thoughtful — response ahead of a scheduled visit to Calgary this week..In it, Environment and Climate Change Canada (ECCC), on behalf of Guilbeault, said “the government of Canada recognizes (Article 6 provisions) have the potential to complement domestic efforts and contribute to sustainable development abroad.”.And though it admitted it remains focussed on domestic emissions reductions, it said transferable credits generated under Article 6 “have the potential to complement domestic efforts. The Government of Canada continues to consider possible approaches to operationalizing Article 6 in the Canadian context, and continues to engage with provinces, territories, Indigenous organizations, industry and stakeholders” on the issue..“The rationale for Article 6 is that the trading of (credits) can enable greater emission reductions than what some countries can achieve internally. This outcome provides a strong foundation for robust and transparent carbon markets under the Paris Agreement.”.But it comes with some pretty big caveats. .“Article 6 does not address specific sectors or technologies,” ECCC continued. “Instead, it outlines key principles for the transfer and use of (credits).”.Specifically, the countries must (emphasis theirs) agree to make a corresponding adjustment to “uncount” those reductions from its total reported GHG inventory — i.e., it must add the emissions back to its total, rather than also count them as a reduction so that they’re not doubly counted..They also have to be independently audited under accepted principles agreed to by the UN..Although the basic framework for Article 6 was agreed at COP 26 in Glasgow in 2022, details on the implementation of the nine pertinent paragraphs need to still be worked out. It’s unlikely that any emissions trading or haggling will occur before 2024..Meanwhile, ECCC is still targeting elimination of what it calls “inefficient” fossil fuel subsidies later this month. Observers had been expecting an announcement as early as this week ahead of Guilbeault’s Calgary visit..The problem is, nobody agrees on the definition of what exactly a ‘subsidy’ is. The US-based Environmental Defence insists the Feds doled out $20 billion to the oil industry in 2022, but that number includes $12 billion in loans and support for the Trans Mountain pipeline — which the government owns outright — and tax credits for carbon capture and storage..Those aren’t direct subsidies; in any event the government has no intention to eliminate or reduce them..The Canadian Association of Petroleum Producers insist there are no direct subsidies for oil production in Canada, although its questionable whether loan guarantees, financing via Crown Corporations or even Canada Pension Plan investments qualify as subsidies..To that end, everyone will have to wait to see what the ECCC has in mind..“Environment Climate Change Canada is not in a position to share further details on the Inefficient Fossil Fuels Subsidies Framework and Guidelines at this stage,” it said.
Environment Minister Steven Guilbeault has seemingly held out a long awaited ‘carrot’ on Article 6 of the Paris Accord while holding on to a ‘stick’ over oil and gas “subsidies.”.The carrot relates to Article 6 of the Paris Accord which allows countries to claim emissions credits for helping other countries reduce theirs — by displacing coal fired power with Canadian sourced LNG, for example..The Western Standard put the question to Guilbeault following the the international LNG conference in Vancouver last week, where Premiers Smith and BC’s David Eby agreed to find ways to cooperate on leveraging exports of clean burning natural gas through West Coast ports..Guilbeault was in Belgium at the time, meeting with his counterparts from China, India and the EU to lay the groundwork for the COP 28 summit in Dubai this November..Following a media availability via Zoom, his department promised to get back to this reporter with a “substantive” response. .And despite some back-and-forth email exchanges, they did exactly that on Tuesday with a lengthy — and one might say, thoughtful — response ahead of a scheduled visit to Calgary this week..In it, Environment and Climate Change Canada (ECCC), on behalf of Guilbeault, said “the government of Canada recognizes (Article 6 provisions) have the potential to complement domestic efforts and contribute to sustainable development abroad.”.And though it admitted it remains focussed on domestic emissions reductions, it said transferable credits generated under Article 6 “have the potential to complement domestic efforts. The Government of Canada continues to consider possible approaches to operationalizing Article 6 in the Canadian context, and continues to engage with provinces, territories, Indigenous organizations, industry and stakeholders” on the issue..“The rationale for Article 6 is that the trading of (credits) can enable greater emission reductions than what some countries can achieve internally. This outcome provides a strong foundation for robust and transparent carbon markets under the Paris Agreement.”.But it comes with some pretty big caveats. .“Article 6 does not address specific sectors or technologies,” ECCC continued. “Instead, it outlines key principles for the transfer and use of (credits).”.Specifically, the countries must (emphasis theirs) agree to make a corresponding adjustment to “uncount” those reductions from its total reported GHG inventory — i.e., it must add the emissions back to its total, rather than also count them as a reduction so that they’re not doubly counted..They also have to be independently audited under accepted principles agreed to by the UN..Although the basic framework for Article 6 was agreed at COP 26 in Glasgow in 2022, details on the implementation of the nine pertinent paragraphs need to still be worked out. It’s unlikely that any emissions trading or haggling will occur before 2024..Meanwhile, ECCC is still targeting elimination of what it calls “inefficient” fossil fuel subsidies later this month. Observers had been expecting an announcement as early as this week ahead of Guilbeault’s Calgary visit..The problem is, nobody agrees on the definition of what exactly a ‘subsidy’ is. The US-based Environmental Defence insists the Feds doled out $20 billion to the oil industry in 2022, but that number includes $12 billion in loans and support for the Trans Mountain pipeline — which the government owns outright — and tax credits for carbon capture and storage..Those aren’t direct subsidies; in any event the government has no intention to eliminate or reduce them..The Canadian Association of Petroleum Producers insist there are no direct subsidies for oil production in Canada, although its questionable whether loan guarantees, financing via Crown Corporations or even Canada Pension Plan investments qualify as subsidies..To that end, everyone will have to wait to see what the ECCC has in mind..“Environment Climate Change Canada is not in a position to share further details on the Inefficient Fossil Fuels Subsidies Framework and Guidelines at this stage,” it said.
