When the leaders of the United States, Canada and Mexico meet June 29 in what’s being called the “Three Amigos” summit, there will be a lot to discuss: trade, the economy, security, and repercussions from the “Brexit” vote. One topic we know will be on the agenda is climate change, whose impacts threaten residents of all three countries.
Each country submitted a pledge to reduce emissions as part of the Paris Agreement. At the North American Leaders’ Summit in Ottawa, they’ll also announce a new goal for North America, collectively, to generate half of the continent’s electricity from non-emitting sources by 2025 – a goal that’s achievable with a little more effort.
Each country has national and city/state/provincial level policies to reduce greenhouse gas emissions. But more will need to be done beyond business and policy as usual to substantially take advantage of our three countries’ clean energy potential. Closer coordination on climate and energy policy is a good place to start.
Among the policy areas where collaboration would be helpful are:
Setting a price on carbon emissions, either through a tax or cap-and-trade system, is considered the most efficient way to reduce them. Many national or subnational pricing systems are already in place in North America:
- Quebec and California have linked their cap-and-trade programs and Ontario plans to join. Mexico has interconnected electricity with California and the state imposes a charge on imported electricity that does not meet its greenhouse gas thresholds. Mexico has interconnected electricity with California, and the state has requirements on imported electricity as part of its climate program.
- Nine U.S. states in the Northeast participate in a cap-and-trade program for electricity called the Regional Greenhouse Gas Initiative, or RGGI.
- Mexico has a carbon tax on fossil fuel (including imports) and has a law that created a market for greenhouse gas offsets.
All three nations should work to expand carbon pricing either at the national or subnational level. Because bigger markets are more efficient, they should seek to standardize measurement, reporting and verification systems (MRV) and methodologies for offset programs.
By either directly linking programs, as California and Quebec have, or by indirectly linking through the use of offsets, Canada, Mexico, and the United States should aspire to send a pricing signal as broadly as possible. By sharing technical expertise and making efforts to align MRV, we can create more efficient and effective programs.
Short-lived climate pollution
Meeting the goal of keeping the rise of global temperatures to well below 2 degrees Celsius by mid-century will require action on more than just carbon emissions. Near-term actions to reduce climate pollutants that remain in the atmosphere for shorter periods of time such as methane, black carbon, and hydrofluorocarbons (HFCs) could significantly limit peak temperature increases in the coming decades.
Canada and the United States recently announced plans to regulate both existing and new sources of methane and agreed to reduce emissions from the oil and gas sector by 40-45 percent below 2012 levels by 2025. Mexico, which has a significant oil and gas sector, is expected to join in this pledge. Similarly, it makes sense for the three countries to work together to reduce HFCs and black carbon as quickly as possible.
Light-duty vehicle greenhouse gas emissions standards have been harmonized among the three nations since 2014. Both the Canadian and Mexican governments adopted the LDV standards set forth by the U.S. National Highway Traffic Safety Administration (NHTSA). Canada will follow the vehicle standards through 2025, while Mexican standards run through the end of 2016. Mexico is also considering adopting more stringent heavy-duty vehicle emissions standards to match European regulations; Canada and the United States both follow NHTSA’s emissions standards through 2018.
States, provinces, and cities in the three countries can also lead on zero emissions vehicle adoption, such as electric vehicles (EVs). Ontario, Quebec, and British Columbia in Canada all offer financial incentives for the purchase of an EV. Likewise, California, Colorado, Massachusetts, and several other U.S. states offer EV tax credits or rebates. Mexico City has pursued electrification of its taxi fleet, offering up to $3,000 for the purchase an electric taxi.
Along the Pacific, California, Oregon, Washington and British Columbia have cooperated to promote EV purchases and the spread of EV charging infrastructure. Mexican states along the Pacific could join their northern neighbors to encourage EV deployment.
Carbon capture, use and storage (CCUS) technology has the potential to yield dramatic reductions in carbon dioxide emissions from the power and industrial sectors. The International Energy Agency (IEA) estimates that CCUS can achieve 14 percent of the global greenhouse gas emissions reductions needed by 2050 to limit global warming to 2C above preindustrial levels. In fact, without widespread use of CCUS technology, climate change mitigation costs may rise as much as 138 percent. For the industrial sector in particular, there are no practical alternatives to achieve deep emissions reduction.
Recent CCUS project milestones include the retrofit of the Boundary Dam coal-fired power plant in 2014 in Saskatchewan, Canada, and Shell’s incorporation of CCUS technology on hydrogen production at the Quest Project in Alberta, Canada, in 2015. But CCUS technology deployment is not on track to meet interim 2025 targets. Since a CCUS project can take five to 10 years from conception to operation, financial and policy support is critical now.
New and enhanced policy drivers at the national and subnational levels are needed in the U.S., Canada and in Mexico to drive research into ways to turn carbon dioxide from a waste product to a useful commodity and accelerate deployment of CCUS technology at the commercial scale.
Canada, Mexico and the United States have connected economies with significant trade in energy and other products. All three countries are major oil and gas producers, but also have portfolios of clean energy such as nuclear, hydropower and renewables. It only makes sense that we should be connected in our efforts to address climate change.