Continental Cap-and-Trade: Canada, the United States, and Climate Change Partnership in North America

By Childs, J. Scott | Houston Journal of International Law, Spring 2010 | Go to article overview
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Continental Cap-and-Trade: Canada, the United States, and Climate Change Partnership in North America


Childs, J. Scott, Houston Journal of International Law


I.   INTRODUCTION

II.  BACKGROUND OF FEDERAL CAP-AND-TRADE POLICIES
     WITHIN UNITED STATES AND CANADA

     A. United States Federal Policy and Cap-and-Trade
     B. Canadian Federal Policy and Cap-and-Trade

III. CANADIAN OIL SANDS ARE CRITICAL COMPONENT TO
     CONTINENTAL CAP-AND-TRADE DEBATE

     A. Oil Sands Production is Expensive and Creates
        High Emissions
     B. Alberta Developed Unique Climate Change
        Strategy

IV.  REGIONAL FRAMEWORKS AND FACILITATING
     INSTITUTIONS PROMOTE NORTH AMERICAN CLIMATE
     CHANGE COOPERATION
     A. Regional Alliances Between Canadian and
        American Jurisdictions Serve as Focal Points for
        Trans-Boundary Cooperation
     B. Important Facilitating Institutions for Continental
        Cap-and Trade Already in Place

V.   ENERGY AND ENVIRONMENTAL DISCUSSIONS BETWEEN
     THE UNITED STATES AND CANADA PROMOTE
     COOPERATION BUT BARRIERS TO AGREEMENT PERSIST
     A. Canada and the United States Agreed to Clean
        Energy Dialogue
     B. The United States has a Strong Interest in Carbon
        Capture and Sequestration Technology Because of
        High Emissions From Coal Consumption
     C. Canada's Intensity-Based Emissions Proposal may
        be Incompatible with United States' Hard Cap
        System
     D. Regional Agreements Will Impact Federal Cap-and-Trade
        Policies within the United States and
        Canada, but These Initiatives May Languish

VI.  ALBERTA INCREASINGLY ISOLATED WITHIN
     CONTINENTAL CAP-AND-TRADE DEBATE
     A. Alberta's Favorable Response to Clean Energy
        Dialogue
     B. Oil Sands Heavily Impacted by American Low
        Carbon Fuel Standards
     C. Proposal for Securing Alberta's Cooperation

VII. ADDITIONAL CONSIDERATIONS
     A. Mexico Could be Important North American Cap-and-Trade
        Partner
     B. Continental Cap-and-Trade Considered in Light of
        North American Free Trade Agreement
     C. North American Cap-and-Trade System Must
        Consider Problems of E. U. Emissions Reduction
        Scheme

VIII. CONCLUSION

I. INTRODUCTION

Canada and the United States share an energy relationship that is unsurpassed by any other two countries in the world. More oil, natural gas, and electricity are imported into the United States from Canada than from any other country. (1) As the largest energy consumer in the world, (2) the United States is an invaluable customer of Canadian energy production. Because of the size and importance of this relationship, Canada's energy and environmental policies can have a tremendous economic impact on the United States and vice versa. Specifically, these two countries face similar challenges in reducing greenhouse gas emissions while maintaining their critical energy relationship. As the U.S. and Canadian federal governments consider implementing domestic cap-and-trade programs for carbon dioxide emissions, each country's proposals reveal the high degree of interdependence characterizing this North American relationship. While some linkage between these two countries' eventual cap-and-trade systems is inevitable, the United States and Canada should actively negotiate a continental cap-and-trade system for carbon emissions.

If carefully crafted, this system would preserve North American energy security while promoting the development of carbon-reducing technologies. Such a comprehensive framework would also maintain the vital economic relationship between Canada and the United States by sustaining energy production and innovation. Additionally, continental cooperation would avoid potential international trade disputes that could threaten the strong ties between these two countries. Though not the primary focus of this paper, Mexico may also be a willing partner to such an agreement, likely strengthening the continental cap-and-trade framework even further. While there are many advantages to such a comprehensive emissions trading scheme, the initiation of this endeavor presents numerous legal challenges to Canada and the United States.

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