Federal and provincial climate change regulation is a patchwork, says Dennis Mahony in Law Times

November 24, 2008

There is uncertainty about the ultimate form of climate change legislation in Canada, as the federal and provincial governments are disagree on an appropriate regulatory framework.

Corporate Canada, already struggling to keep up with a shifting legislative agenda (or lack thereof), may face exponential uncertainties if competing regimes are at cross-purposes.

"If the federal framework and the various provincial frameworks are consistent, everything will be fine, but what are the chances of that?" asks Dennis Mahony. "What is clear is that industry dislikes a patchwork approach."

Take, for example, the federal government's climate change regulatory framework, first announced in spring 2007. It features a "soft" cap and-trade program, in which emissions targets are based on intensity rather than absolute reductions.

On one hand, soft cap and trades have been criticized for potentially allowing an increase in greenhouse gas emissions as production increases; on the other hand, they are less intrusive than hard-cap schemes on economic growth.

"The federal government says that intensity targets promote efficiency without putting brakes on the economy," says Dennis. "A hard cap-and-trade, for example, would be a huge problem for the oil sands. The biggest topic of discussion with all these developments is what a national compliance regime would look like. But what's not often discussed is the constitutional authority to regulate, which is a problem because the Constitution doesn’t address the environment. If the directions of these cap-and-trade systems keep diverging, a legal battle could very well be in the offing."

Read the full article here.

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