June 26, 2006

Quebec to levy hydrocarbon royalties to fund six-year, $1.2-billion climate change plan

The Quebec government will invest $1.2 billion over the next six years in a 24-point action plan designed to achieve a ten-megatonne reduction in greenhouse gas (GHG) emissions from provincial sources by 2012. Quebec's first climate change action plan, titled Quebec and Climate Change - A Challenge for the Future, was unveiled June 15 by Premier Jean Charest and Sustainable Development, Environment and Parks Minister Claude B√ąchard.

The $200 million per year required to carry out the plan will come from a Green Fund established with the coming into force this past April of Quebec's Sustainable Development Act. The plan proposes hydrocarbon royalties to be applied to GHG-emitting businesses in the energy sector. Quebec's Energy Board would set the royalties, calculating them on the basis of carbon dioxide equivalent for each form of energy, with the monies to be paid into the Green Fund.

The majority (20) of the measures outlined in the plan focus on reducing and/or preventing GHG emissions, with the remaining four addressing adaptation to the effects of climate change. Fully half of the GHG reduction measures target the transportation sector; these are projected to account for 4.13 megatonnes (Mt) of the total reduction sought by 2012.

Among other things, the plan commits the government to use whatever leverage tools it deems necessary to apply more stringent standards for GHG reduction and energy efficiency to vehicles sold in Quebec. This approach is modelled on the GHG emission standard for light-duty vehicles, adopted by the state of California in 2004, requiring automakers to offer for sale vehicles meeting a maximum GHG emissions threshold (which is set annually). Other measures include:

*facilitating access to ethanol fuel by requiring gasoline distributors to ensure that ethanol makes up at least 5% of their total sales by 2012;

*encouraging municipalities to adopt anti-idling bylaws by 2010 (Montreal and Quebec City have already done so);

*favouring, by various means, the development and greater use of mass transit and of alternative transportation modes (e.g. cycling, walking);

*promoting projects to reduce GHG emissions associated with intermodal transport of goods;

*supporting technological innovation programs designed to improve energy efficiency in the transport of goods; and

*adopting a regulation requiring the use of speed regulating devices on all heavy-duty trucks.

Power generation accounts for a smaller proportion of GHG emissions in Quebec than most other Canadian jurisdictions, thanks to the province's abundant hydropower resources. A new energy strategy released last month calls for new renewable energy developments involving both hydro and wind energy. By 2012, these new developments, combined with energy efficiency programs delivered by Hydro Quebec, will together prevent nearly 11 Mt of GHG emissions.

The action plan measures for the energy sector will prevent an additional 650 kilotonnes and will include a funding program to support energy efficiency initiatives by industrial, commercial and institutional organizations, municipalities and other groups. In addition, Quebec's building code will be amended to improve the energy performance of buildings and homes built in the province starting in 2008.

Two important steps will be taken to reduce GHG emissions from industrial sources: the government will negotiate voluntary GHG emission reduction agreements with specific industry sectors; and a provincial regulation to manage halocarbons will be brought into force. Passed in 2004, the regulation would ban chlorofluorocarbons (CFCs) and require the recovery or emptying of equipment containing these compounds before any work that might cause emissions is undertaken.

The single measure with the greatest GHG reduction/prevention potential addresses waste management: the government will provide funding support for the capture of biogas (notably methane) from landfills not subject to the forthcoming regulation governing the landfilling and incineration of residual materials. There are many smaller landfill sites throughout the province, many of them closed; capturing biogas from these sites could reduce or prevent a projected 2.5 Mt of GHG emissions by 2012.

The plan also calls for the new landfill regulation, passed in 2005, to be brought into force. It will require installation and monitoring of biogas recovery equipment at all engineered landfills, including new sites and major expansions of existing sites.

Another measure targeting the agriculture sector will establish a funding program to support treatment of liquid manure (which accounts for nearly 30% of agriculture-related GHG emissions) and reclamation of agricultural biomass for use as an energy source.

The plan includes measures for government leadership, public awareness and technological research and development. The government will improve the energy performance of public buildings from 10 to 14% by 2010 below 2003 levels and will require a 20% reduction in fuel use by ministries and government agencies.

Among the adaptation measures specified by the plan are: consolidation of monitoring networks for climate, water and groundwater resources; and testing of methods for reducing the impacts of permafrost thawing on transportation infrastructure. Work will be undertaken to determine the vulnerability of Quebec's forests and forestry sector to climate change and to integrate the forecast impacts into forest management.

The action plan document may be viewed (in English as well as French) on the Ministry of Sustainable Development, Environment and Parks Web site, www.mddep.gouv.qc.ca/changements/plan_action/index.htm.

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