GHG Emission Trading and the Constitution

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GHG Emission Trading and the Constitution

• Stewart Elgie
• University of Ottawa, Faculty of Law, and
• Chair, Sustainable Prosperity

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Overview of Presentation

• Main mechanisms to put a price on carbon
• Emission trading / payments (this talk)
• Taxes and other fees (next talk)
• Federal powers
• Provincial powers
• Upshot

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Emissions Trading
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CheatNeutral
What is Cheat Offsetting? When you cheat on your
partner you add to the heartbreak, pain and
jealousy in the atmosphere. Cheatneutral offsets
your cheating by funding someone else to be
faithful and NOT cheat. This neutralises the pain
and unhappy emotion and leaves you with a clear
conscience. Can I offset all my cheating? First
you should look at ways of reducing your
cheating. Once you've done this you can use
Cheatneutral to offset the remaining, unavoidable
cheating
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Constitutional Jurisdiction and the
Environment
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Fed Powers - Overview
S. Elgie, Kyoto, the Constitution and Carbon
Trading, 131 Review of Constitutional Studies 1
(2008)
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Evolving Judicial Approaches

• Courts have fleshed out const-env powers over
  past 30 years, balancing
• Need for national standards, and
• Protecting provincial jurisdiction
• Two main approaches to constrain fed power
• Limit breadth of subjects addressed (POGG)
• Limit depth of tools used (Criminal)

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POGG

• Residual power
• National Concern test
• Distinct and indivisible (likely met)
• Provincial inability (likely met)
• Scale of impact on provl jurisdiction (?)
• Issue Does test allow greater provl impacts to
  address inherently far-reaching problems?
• Scope Could include emission trading, but cant
  reach too far into industrial practices

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Criminal Power

• Test
• Valid criminal purpose (likely met)
• Prohibitory approach (?)
• OK to have some regulatory elements
• Controls on GHG emissions likely OK
• Is emission trading too regulatory?
• This is current federal approach - risky

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Trade Commerce

• Combine with Criminal power (for trading)
• Two branches
• Interprovl / internatl trade
• General trade commerce
• Key problem cannot be effectively regulated
  unless it is regulated nationally
• Good chance of success

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Treaty Implementing

• Power untested since 1937
• Strong arguments that power exists
• Constn said feds can implement UK treaties
• Canada has weakest fed treaty powers
• Impairs international affairs
• Possible boundaries on power?
• treaties re internatl matters, not domestic
• powers strictly limited o/s tradl fed areas
• If power exists, includes e-trading

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Provincial Powers
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Provincial E-Trading Power

• Prov power to regulate GHG emissions
• show provincial purpose? (global impact)
• likely OK, but uncertain
• Prov power over extra-prov e-trading
• provs cant regulate extra-prov activities
• show provincial purpose?
• very questionable
• might help if parallel, multi-prov approach

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Summary

• Feds likely can regulate e-trading
• raises significant new constl questions
• Provincial power more questionable
• Fed prov trading systems
• 2 parallel systems likely ok but why?
• coordinated systems could work
• e.g. provs implement, set tougher limits
• tough if feds use intensity targets
• Both levels can use spending and incentives