Dion ups ante on emissions

Fines would fund 'green investment account'
Juliet O'neill, CanWest News Service: Sat, March 17, 2007 National Post

OTTAWA - Stephane Dion unveiled a toughened Liberal environment policy yesterday that would require steep reductions in greenhouse gas emissions from 700 large industrial companies and impose hefty penalties on those that do not comply. Companies in three sectors -- electricity generation, oil-and-gas production and energy-intensive industries -- would be required to pay into a "Green Investment Account" governed by an independent agency when they exceed emissions targets. The company could withdraw the money later for investment in pollution-cutting plans. "We can no longer use our atmosphere as a free garbage dump," Mr. Dion said at a news conference to announce the plan, which is tougher than the policy he advocated in his recent Liberal leadership bid. "Polluters must pay." The main distinction in the new plan is the "absolute cap" it would set on each company's allowable carbon pollution, in place of "intensity targets."

Intensity targets establish a percentage limit on each unit of production -- a barrel of oil, for example -- that allows pollution to rise if production rises. The government is expected to announce an "intensity target" approach in the next few weeks. Mr. Dion's plan was branded "a massive tax on the Canadian economy and a tax that doesn't guarantee any concrete results" by Multiculturalism Minister Jason Kenney, speaking for Environment Minister John Baird. "We think the plan he's announced today is a lemon coming from a leader who has negative credibility on the environment in general and climate change in particular," Mr. Kenney said, noting the 35% increase in emissions that occurred when the Liberals were in power. Major environmental groups welcomed the proposal, as did the New Democratic Party.

The plan would set emission levels based on Canada's Kyoto commitment to reduce greenhouse gas emissions by 6% below 1990 levels by 2012. Companies that fail to comply would pay penalties that start at $20 per tonne of excess carbon pollution in 2008 and rise to $30 in 2012. Each company's penalties would be held in trust for their own future use. Mr. Dion said this did not constitute a carbon tax because it would be governed by an independent agency and "will not reach government coffers." The agency board would include federal and provincial officials and representatives of the private and non-profit sectors. Companies would be subject to the plan as of Jan. 1, 2008, and given four years to comply. The Liberals would also allow the establishment of a domestic carbon market, enabling companies that are below allowable pollution levels to sell their unused portion. As well, companies would be allowed to offset up to 25% of their excess pollution by buying international emission credits.