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Speeches, Testimony, Papers

US and Canadian Climate Legislation by State and Province

by Meera Fickling, Peterson Institute for International Economics

February 12, 2009
Revised July 24, 2009

© Peterson Institute for International Economics

Both Canadian and US federal governments are currently pushing climate-change laws through their respective legislatures, but legislation in both countries is neither comprehensive nor certain to pass. In the absence of adequate federal programs, states and provinces are stepping in with their own initiatives. Not surprisingly, federal, state, and provincial governments hold different views about the specifics of measures to control greenhouse gases (GHGs), even when they agree on the broad objective. Many jurisdictions, such as California and British Columbia, prefer stricter targets than those currently laid out in federal regulation. Moreover, while proposed federal legislation has so far favored cap-and-trade strategies focused on overall emissions, provincial and state legislation tends to supplement these market strategies with industry performance standards and programs targeted to local circumstances—and these are already being implemented in some states and provinces. Indeed, provincial and state governments have quickly become leading players in climate policy.

The accompanying table [pdf] summarizes initiatives proposed or underway in each NAFTA country, leading off with relevant federal legislation and progressing to provincial or state legislation, listed in alphabetical order. The table details major legislation only, excluding building and appliance standards. Some US states are not covered in this edition. Also excluded are the multiple bills under discussion in the US Congress, which will be summarized in the forthcoming Peterson Institute for International Economics book Global Warming and the World Trading System. Regional initiatives between US states and Canadian provinces are reserved for last. This table is part of a broader Institute project on the interaction between federal and state climate initiatives and their ramifications for trade policy. As this is a work in progress, please send comments, corrections, and suggestions to Meera Fickling.

Of the provincial legislation currently in place in Canada, Alberta's baseline-and-credit system most resembles Canadian federal legislation, with a modest cap, availability of emissions offsets, and a technology fund to which firms can contribute at a rate of C$15 per ton CO₂e. Ontario and Manitoba have led the way on clean electricity, phasing out coal-fired generation plants and proposing an east-west power grid for green energy. In order to meet one of the strictest emissions targets in Canada, British Columbia has implemented a C$10 per ton CO₂e carbon tax. Saskatchewan has also put forward a net-zero requirement for new and replacement electrical plants.¹ Four provinces—British Columbia, Ontario, Quebec, and Manitoba—have looked past national borders to join the Western Climate Initiative, a joint cap-and-trade program with seven US states; meanwhile, several provinces have adopted California's tailpipe emissions standards.

Three major North American regional initiatives envisage mechanisms for implementation: the Regional Greenhouse Gas Initiative (RGGI), the Midwest Greenhouse Gas Accord (Midwest Accord), and the Western Climate Initiative (WCI), all of which are cap-and-trade systems. Of the three, the WCI and the RGGI are the best-developed, and the RGGI is the only framework that has already begun auctioning emissions credits.

While states and provinces have led the way on climate change in the northern two countries, it is the federal government in Mexico that has been more proactive on the climate front, eliminating old buses and trucks, increasing wind-power capacity, and planting 250 million trees. State action in Mexico has not been on the same scale as subfederal action in the other two North American countries.

Download the table [pdf]

Note

1. "Net-zero" means that all GHG emissions must be offset elsewhere by the firm.