Two biggest Canadian provinces sign emissions deal

Mon Jun 2, 2008 7:48pm EDT
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By David Ljunggren

OTTAWA (Reuters) - In a rebuff to the Canadian government's plan to fight climate change, the country's two biggest provinces agreed in principle on Monday to set up a market-based system to curb greenhouse gas emissions.

The premiers of Ontario and Quebec, which between them account for almost two-thirds of Canada's 33 million population, said Ottawa's program to cut emissions 20 percent from 2006 levels by 2020 was inadequate and misguided.

The two signed a memorandum of understanding to establish a cap-and-trade program by 2010 that would limit the amount of emissions that companies can produce. Companies that exceed their limits would pay a fee to those who keep within them.

The federal Conservative government opposes a cap-and-trade system with absolute limits. It says there is no chance Canada can meet its commitments under the Kyoto Protocol on climate change, which oblige Canada to cut emissions by 6 percent from 1990 levels by 2012.

Ottawa's plan initially aims to use "intensity-based" caps tied to production, which would have producers cut a percentage of emission increases rather than cutting emissions overall.

"What worries us is that the federal government is in the process of setting up a system that is incompatible with what exists in Europe and elsewhere," Quebec Premier Jean Charest told a news conference in Quebec City.

Federal Environment Minister John Baird quickly dismissed the plan as "a shell game," noting there were no details.

Charest also said the two provinces wanted to stay on the right side of the United States on the grounds that whoever wins this November's presidential election will do much more to fight climate change than President George W. Bush.   Continued...