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World Canada pushes role of carbon markets in reducing emissions at climate summit

Canadian Minister of Environment and Climate Change Catherine McKenna speaks during a news conference, in Paris, France, on Nov. 29, 2015. McKenna has been named to a group of 14 international ministers who will serve as facilitators of the COP21 climate conference in Paris.

Adrian Wyld/THE CANADIAN PRESS

Canada is working to have the Paris climate summit recognize the role that markets can play in reducing greenhouse-gas emissions, but is encountering opposition from countries that have ideological concerns, Environment Minister Catherine McKenna said on Wednesday.

Ms. McKenna said negotiators were narrowing differences in the overall effort to reach agreement by the end of Friday, but she added that more work needs to be done.

At a briefing on Tuesday night, French Foreign Minister Laurent Fabius – who is chairing the conference – was told that "fault lines" remain between developed and developing countries on key issues, including ambition for reducing emissions, financing assistance for poorer nations and mechanisms to review and update the agreement in future years.

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The challenge is over "differentiation" – the distinction between obligations of the rich world, which is responsible for the lion's share of greenhouse emissions that have gone into the atmosphere since the Industrial Revolution, and less-developed countries, many of which are most vulnerable to the impact of global warming.

"Differentiation is something we are making progress on," Ms. McKenna said on Wednesday. "But what it means for countries to have common but differentiated obligations is playing out throughout the agreement."

The rookie Environment Minister, who worked as an international lawyer before running for a seat in the House of Commons, was appointed by Mr. Fabius to help facilitate negotiations on markets and co-operation.

"There are some countries that are opposed to markets playing any role," she said. "But over all, many countries recognize that markets have a role to play. And whether or not the language is reflected in the agreement, there will continue to be a role for the markets."

Quebec, Ontario and Manitoba have announced cap-and-trade plans that will see them participate in a carbon market with California and, potentially, other future members of the Western Climate Initiative. As well, Canada, Mexico and the United States are discussing proposals for a North American climate agreement that could facilitate cross-border trading in emissions credits.

In a report released in Paris on Wednesday, a coalition of Quebec business and environmental groups urged the three provinces and California to harmonize the operating rules for carbon markets with China, Mexico and the European Union.

Over all, 17 cap-and-trade systems are in effect on four continents, encompassing 35 countries, 12 states or provinces and seven cities, the group noted. Together, these jurisdictions represent about 40 per cent of the global gross domestic product. Recently, China and Mexico also announced that they intended to implement their own national markets as early as 2017.

At the media briefing on Wednesday, Ms. McKenna was asked about Canada's decision to endorse language in the agreement that would commit countries to "strive to" limit the rise in average global temperatures to 1.5 degrees Celsius above preindustrial levels. The common benchmark has been two degrees, but island nations say that increase would be disastrous for them.

The Environment Minister refused to say whether the Liberal government would now base its own climate strategy on a 1.5-degree global goal, or what impact the more ambitious goal would have on oil-sands production or the construction of pipelines that bring more bitumen supply to world markets.

The federal government will work with the provinces and territories, as well as indigenous leaders, to conclude a Canadian climate strategy over the next several months, she said.

"It's not just about having a target; it's about having a plan and concrete actions to get there," she said. "And we owe it to Canadian to do it in the proper way."

Alberta Environment Minister Shannon Phillips rejected any suggestions the 1.5-degree goal would increase pressure on the province's oil-sands industry, which represents the fastest-growing source of GHG emissions even with the slump in crude prices.

"Alberta has put in place a robust set of policies and we are now leaders in the country and the continent in terms of action," Ms. Phillips said. "We haven't even begun to implement those policies yet."

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The minister said her province has been well received in Paris after tabling its climate plan that will set a cap on oil-sands emissions and impose an economy-wide carbon price of $30 per tonne of carbon dioxide.

"We've certainly seen a situation where we've turned a page. We are being received quite positively at COP21, and the reason for that is that we've demonstrated it can be done – that rational, drama-free conversation as energy producers can be had, and that leadership can come out of that," she said.

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