British Columbia and Ontario have thrown a wrench into a plan spearheaded by California to launch a cross-border greenhouse-gas emissions reduction scheme next January.
California has been leading an effort to launch a cap-and-trade system with several U.S. states and four provinces, B.C., Ontario, Manitoba and Quebec. Now, only Quebec says it remains committed to the planned January, 2012, startup date of the Western Climate Initiative (WCI).
B.C. officials clarified their province's position after it was described as committed to the 2012 date in a WCI status report released by the California Air Resources Board late on Tuesday.
"I think they jumped the gun on us a little bit," B.C. Environment Minister Terry Lake said in a telephone interview.
British Columbia has long promised to introduce a cap-and-trade plan on large industrial emitters to complement an economy-wide carbon tax that was introduced on July 1, 2008.
The market-based Western Climate Initiative is meant to reduce the overall cost of meeting reduction targets because it would allow large industrial companies essentially to buy credits from firms that can slash their emissions more cheaply. And the larger the market, the more economically efficient the system would be.
Mr. Lake - who assumed his cabinet post last month - said the newly minted government of Premier Christy Clark needs to re-evaluate the cap-and-trade proposal to ensure it wouldn't undermine the province's competitiveness.
"This is not a simple subject to address, and we have to do it in a way that is sensitive to our competitive situation vis-a-vis other jurisdictions and industry. … The final decision on whether to implement in 2012 has not been made at this time."
The issue is particularly sensitive in British Columbia, the only jurisdiction in North America to have a broad-based carbon tax. The levy was introduced at $10 per tonne of carbon emitted, and is now sitting at $20 a tonne and is scheduled to rise to $25 on July 1.
Mr. Lake said the new government wants to ensure its carbon policies do not unduly constrain the booming natural gas industry in the northeastern part of the province and the resurgent mining sector.
Ontario also signalled on Tuesday that it would not meet the Jan. 1 startup date, although Environment Minister John Wilkinson said the McGuinty government remains committed to joining the WCI system.
"We are committed to cap-and-trade through the western climate change initiative, but we are not ready to join the market in 2012," Mr. Wilkinson said in a telephone interview.
"We need the time to get it right and that means getting it right both for the environment and our economy."
Ontario has passed legislation requiring companies to report their annual emissions, and Mr. Wilkinson said the government needs to monitor those reports to better understand the impacts of a cap-and-trade system.
Quebec has given no indication that it plans to delay implementation of the WCI cap and trade plan - though a spokeswoman for the Ministry of Sustainable Development, Environment and Parks described the Jan. 1 start date as an "objective."
Two federal parties, the Liberals and New Democrats, have included a cap-and-trade program in their election platforms, while the Green Party is pushing both a carbon tax and a cap-and-trade system. The Conservatives - who had proposed a cap-and-trade plan when it appeared the U.S. government would adopt one - now says it will impose emissions-reduction regulations on industry.