Canada’s Carbon Market Future 2016
Cap-and-Trade & Other Regimes for a Low-Carbon Future
December 5-6, 2016
Toronto, ON

This session will provide a big picture overview and update on global environmental markets and carbon policy regimes, exploring the evolving international and North American landscape and influences on emerging local markets.

• Carbon pricing program options
  • Cap-and-trade
  • Carbon tax
• Key international policy instruments
• Paris Agreement: key issues, outcome, and Canada’s commitment
  • Design for long-term agreement — goals and mechanisms needed to achieve
  • Implications for Canada and Ontario
• Global state of carbon markets
• North American carbon market drivers: history and current status
  • Western Climate Initiative (WCI)
  • S. EPA Clean Power Plan (CPP)
• The Canadian scene
  • Federal carbon tax?
  • Compare/contrast Provincial programs
• The nexus of Provincial and Federal carbon programs in Canada
• Ontario’s Climate Action Plan and the role of cap-and-trade

Juliana Bruno, Consultant, London Economics International LLC

Katie Sullivan, Director, The Americas & Climate Finance, International Emissions Trading Association (IETA)

Kevin Poloncarz, Partner – Environmental and Energy Practice, Paul Hastings LLP

• Ontario’s emission status and exposure potential
• History and process for developing the program and reasons for choosing cap-and-trade as a means of pricing carbon
• Timeline of major developments and future execution
• Cap-and-trade regulation
  • Proposed caps
  • Compliance periods and requirements
  • Auction and sale rules
  • Strategic reserve of allowances
  • Market rules such as holding limits and purchase limits
  • Allocations
  • Credit for early action
• Major program features and overview of legal compliance options
  • Allowance allocation
  • Reserve price
  • Strategic reserve
  • Opt-in provision
  • Holding limits
  • True-up every three years
  • Offsets
• Caps and compliance periods
• Anticipated benefits and considerations for Ontario’s intent to link its program to the California-Quebec market
• Plausibility of Federal carbon tax and resulting impact on Ontario’s carbon regulation requirements

Craig Golding, Cap-and-Trade Manager, Ministry of the Environment and Climate Change (MOECC)

This session will discuss potential impacts to Ontario’s economy and electricity prices resulting from imposition of the cap-and-trade regime, exploring the influence of cap-and-trade and carbon pricing on the electricity market and pricing, domestic generation, and imports/exports of domestic generation.  It will also address challenges the program raises for generation contracts, considering who will take on the additional costs of carbon and subsequent implications for different scenarios.  Included will be a review of how the program impacts specific industries and companies by sector, with regard to:

• Natural gas
• Electricity/power sector/generators
• Large commercial
• Manufacturing
• Mining
• Transport/fuel sector perspective
• Oil refiners
• Distributors (gasoline and diesel)

Moderator: Sean Capstick, Principal, Golder Associates Ltd.

Darryl Yahoda, Director – Clean Energy Procurement, Independent Electricity System Operator (IESO)

David Butters, President, Association of Power Producers of Ontario (APPrO)

• Ontario reporting: guidelines, timelines and changes
• Comparative overview of Ontario’s reporting and verification dates and thresholds with other jurisdictions
  • Which jurisdictions are improving their reporting mechanisms and upping the standard for Canada?
• Emissions reporting requirements for Ontario’s:
  • Electricity generators
  • Electricity transmission and distribution systems
  • Electricity importers
• Verification in Ontario
  • Current GHG reporting and verification practices and requirements in Ontario
  • Case studies from the power industry
• Looking ahead — future compliance requirements
  • Changing reporting regulations
  • Impacts to current practices

Julie Tart, Senior Manager, ICF Canada

• Actually reducing emissions to required levels — what would it take?
• Management and operational considerations and risks
• Optimizing plant efficiency to decrease GHG emissions
  • Energy conservation and efficiency
  • Appropriate heating and power plant fuel choices
  • Minimizing GHG fuel use during power production
• Economic considerations for consumers and large end-users under cap-and-trade regulation

Ryan Duffy, President, Blackstone Energy Services Inc.

Under Ontario’s cap-and-trade, natural gas distributors will be subject to a regulatory process by the Ontario Energy Board (OEB).  This session will explore what compliance means for natural gas distributors, in terms of:

• Regulatory context and preparing for the Ontario Energy Board (OEB) framework
• Program design elements of compliance
  • Program design, submittal and approval status
  • Estimate of cost for compliance
• Components of a natural gas distributor compliance strategy:
  • Expanded reporting and verification of GHG emissions
  • Working with customer needs in mind to ensure compliance with cap-and-trade regulations relating to Ontario Energy Board (OEB) regulatory requirements
  • Getting business ready for carbon procurement
  • Collaborating with customers or solutions to mitigate or manage their GHG footprint
• Considerations for effective compliance in the short and long-term
• Levers for natural gas distributors as part of a lower-carbon economy:
  • Energy efficiency and conservation
  • Greening the natural gas grid
  • Natural gas vehicles
  • Innovation and technology development

Fiona Oliver-Glasford, Senior Manager – Carbon Strategy & Integrated Resource Planning, Enbridge

Cap-and-trade is only one component of Ontario’s Climate Change Action Plan (CCAP), an $8.3 billion five-year plan created by the provincial government to reduce its greenhouse gas emissions.  The CCAP lays out a strategy from 2017 to 2021, containing 80 different policies that are grouped into 32 different “actions.”  The plan estimates the amount of emissions each action will cut by 2020 and an associated price needed to achieve it.  This session will evaluate what Ontario’s future energy system will look like under the plan, assessing:

• Highlights of Ontario’s Climate Change Action Plan
  • Actions expected to cause the largest emission cuts by 2020
• The role of cap-and-trade in Ontario’s CCAP
• Reinvestment of cap-and-trade revenues: where should all the money go?
• Independent Electricity System Operator (IESO) analysis supporting Ontario’s long-term energy plan and related climate change polic
• Resource, development, and transmission planning and considerations
• Renewable energy development opportunities from climate change policy in Canada
• Ensuring climate resilience and adaptation as a province

Moderator: Jason Chee-Aloy, Managing Director, Power Advisory LLC

David Butters, President, Association of Power Producers of Ontario (APPrO)

Michael Crawley, Executive Vice President, Northland Power

John Godfrey, Special Advisor on Climate Change, Ontario Ministry of Energy

Darryl Yahoda, Representative- Planning Group, Independent Electricity System Operator (IESO)

This session will draw on the experience of power industry and carbon market experts who have participated in the two existing North American cap-and-trade programs — the California-Quebec market and the Regional Greenhouse Gas Initiative (RGGI Inc.) — to consider lessons learned with regard to carbon market finance, transactions and compliance strategies.  Speakers will address:

• Lessons learned from the California-Quebec and Regional Greenhouse Gas Initiative (RGGI) Markets
  • Market risks
  • Program design impacts (holding limits, auctions, price floors)
  • Revenue recycling outcomes
• Understanding the growing carbon market: trading and market concerns
• Offset compliance mechanisms in Ontario
  • Development and use of carbon offsets in Ontario and WCI jurisdictions
  • Offset use from practitioner’s perspective
  • Market analysis on supply and demand for offsets in regulated WCI jurisdictions and in voluntary markets
• Considerations for voluntarily opting in to Ontario’s cap-and-trade
  • Determining if it is in an organization’s financial best interest to opt-in
  • Applying for free allowances

Moderator: Julie Tart, Senior Manager, ICF Canada

Ryan Duffy, President, Blackstone Energy Services Inc.

Mittal Monani, Environmental Commodities Trader, Capital Power Corporation

Stephen McComb, Director – US Environmental and Coal Markets, Intercontinental Exchange (ICE)

This session will provide an update on the current state of carbon policies and programs in North America, describing the status of various policies and programs, both existing and in development. It will consider:

• Legal issues and regulatory framework for United States climate policy
  • United States’ EPA Clean Power Plan (CPP)
  • California landscape post-2020
• Possible outcomes of Clean Power Plan (CPP) implementation
• Regional Greenhouse Gas Initiative (RGGI):
  • Structure, how it’s worked, challenges going forward
  • CPP impact/opportunities
  • RGGI – WCI: Implications going forward
• Western Climate Initiative (WCI) Auction Updates
  • Overview of revenues from 2016 auctions
  • Implications for ‘low’ auction results in the spring 2016 California-Quebec market
• Mexico: climate policy update and future prospects for WCI linkage
• What all of this means for Ontario and Canada’s emerging carbon markets

Moderator: Ashley Lawson, Senior Solutions Fellow for Policy and Resilience, Center for Climate and Energy Solutions (C2ES)

Xantha Bruso, Manager of Long-Term Energy Policy & Procurement, Pacific Gas & Electric (PG&E)

Paul Hibbard, Vice President, Analysis Group (Former Chair, Massachusetts Dept. Public Utilities)

Kevin Poloncarz, Partner – Environmental and Energy Practice, Paul Hastings LLP

Confusion exists over how the multiple, complex, and layered carbon policies and programs will be managed across North America in the coming years.  This is especially true for the northeast part of the continent, a region that contains carbon prices under both the Regional Greenhouse Gas Initiative (RGGI) and Western Climate Initiative (WCI) — and jurisdictions with no price yet, but that may adopt one under the U.S. Clean Power Plan (CPP).  This session will look at what the overall economic and environmental impacts of this scattered pricing might look like.  It will analyze how variations in different generator carbon price offers across jurisdictions could substantially change power flows between regions, and what impact this could have for Ontario and the region as a whole.

Paul Dabrowski, Senior Advisor – Modeling & Analytics, Ontario Power Generation

The closing panel will integrate the learning and information presented through the conference, considering how to best move forward to create an optimal carbon market in North America, and what that will mean for Canada and Ontario specifically.  It will consider:

• Resolving disparate views on the goal of carbon markets
  • Effectively lowering emissions vs. raising revenues at quarterly auctions
  • Cap-and-trade revenue reinvestment
• Impacts from a potential Canada federal government national carbon price
  • If the price is set higher than WCI credits, what does that mean for cap-and-trade in Canada?
• Policy and technical considerations for linking markets
• Ensuring fairness and transparency in linked markets and auction process
  • How can Ontario ensure a fair and transparent market for the province when linking to California-Quebec and Mexico?
• Offset markets in North America — current status and potential
• Canada, the U.S. and Mexico: strategies to cooperate on carbon trading
  • Opportunities for a common emissions market
  • Assessing stringency and transparency of trading system
• Optimizing future auctions for Ontario

Moderator: Yvan Champagne, President, Blue Source Canada

Craig Golding, Cap-and-Trade Manager, Ministry of the Environment and Climate Change (MOECC)

Xantha Bruso, Manager of Long-Term Energy Policy & Procurement, Pacific Gas & Electric (PG&E)

Scott Hernandez, Vice President – North America, CBL Markets

Ashley Lawson, Senior Solutions Fellow for Policy and Resilience, Center for Climate and Energy Solutions (C2ES)