Business

North America looks to be moving to make up some of the lost ground in addressing greenhouse gas emissions in the region. A major step in addressing large final emitters (LFE) - namely cap and trade systems - look to be finally gaining momentum. Once implemented this has the potential to reduce a significant amount of the CO2 produced in North America.

While this is great, we wonder if there is a fundamental design flaw in regard to sourcing carbon credits. The Western Climate Initiative has proposed that credits must be sourced in Canada, America or Mexico (download Draft Recommendations). Due to regional political considerations, it is likely that other cap and trade systems in the continent will follow the same design.

Unlike the EU, cap and trade systems that are currently being proposed by governments across North America will not recognize credits from carbon reducing initiatives in China, India or other places that are producing a lot of carbon as they go through their industrial revolutions. As carbon doesn’t obey national or continental boundaries we wonder if only allowing North American LFEs to source carbon credits from North America is the right way to go. At the same time, last we checked we are producing a lot of carbon too, so what is the right way to go on this?

Adam Johnson is a Principal with the Earnscliffe Strategy Group, one of the oldest independent public policy strategy firms in Canada, and a leader in government affairs and strategic communications.