(Updates with comments from Clearview, EDF, Ontario environment minister)

The US and Canada on Thursday announced a joint effort to curb methane emissions from their oil and gas sectors, and said they would expand their collaboration on carbon markets by working together to ensure the environmental integrity of new emissions units.

US President Barack Obama and Canadian Prime Minister Justin Trudeau said their countries would aim to cut methane from oil and gas by 40-45% below 2012 levels by 2025, with Canada effectively signing up to targets previously announced by the US EPA last August.

The announcement of closer cooperation on climate and energy came as Trudeau kicked off the first US state visit of a Canadian leader in nearly 20 years.

The measures will help Obama further advance his environmental agenda during his final year in office, while also translating climate pledges made by Trudeau during last year’s federal election into reality.

The White House said the EPA will begin drawing up proposed regulations for methane from existing oil and gas sources immediately, and will soon require companies operating in this space to provide information to assist in the rules’ development.

The agency is currently working on similar, final regulations for new and modified wells.

Meanwhile, Environment and Climate Change Canada, the EPA’s counterpart to the north, will work with provinces and stakeholders to publish its own initial phase of proposed regulations targeting methane from new and existing sources by early 2017.

Methane emissions on both sides of the border have ballooned with the US shale gas boom and the development of Alberta’s oil sands.

Despite introducing a raft of new climate policies in his second term, analysts said Obama may not be done in his assault on greenhouse gas emissions.

“Today’s news of deeper methane regulation also suggests higher odds of broader GHG regulation of industrial sources – including refineries and chemical manufacturing,” said Timothy Cheung of Clearview Energy Partners.

“Even if Democrats lose the [US] presidential election, a final existing-source methane rule and a proposal for refinery carbon performance standards could both potentially emerge as ‘midnight regulations’ in the waning hours of the Obama presidency.”

CARBON MARKETS

On carbon markets, the two leaders said:

“Recognizing the role that carbon markets can play in helping countries achieve their climate targets while also driving low-carbon innovation, both countries commit to work together to support robust implementation of the carbon markets-related provisions of the Paris Agreement. The federal governments, together and in close communication with states, provinces and territories, will explore options for ensuring the environmental integrity of transferred units, in particular to inform strong INDC accounting and efforts to avoid ‘double-counting’ of emission reductions. They will also encourage sub-national governments to share lessons learned about the design of effective carbon pricing systems and supportive policies and measures. The countries will expand their collaboration in this area over time.”

No further details were provided.

While neither country has a national emissions trading scheme, the US has two regional markets in the form of RGGI and WCI. Canada’s Quebec is a member of the WCI, along with California, and Ontario and Manitoba are due to join the programme in the coming years.

“What is notable to me about the US-Canada statement is that those two countries are saying they will step up to help meet the need for broadly recognised standards for environmental integrity in international carbon markets, working closely with their subnational governments,” said Nat Keohane, Vice President for Global Climate at Environmental Defense Fund.

“California and Quebec are already providing a model for the world on how to successfully link emission trading systems.  Their federal governments have an opportunity to build on that experience to provide a model for the world on how to incorporate markets into the Paris framework while ensuring high integrity.”

Ontario’s Environment and Climate Change Minister Glen Murray, in an article he wrote for Time magazine published Thursday, urged the leaders to “think big on how to leverage [the two countries’] close relationship”.

“We’re making progress, but we’re not moving quickly enough. We need to capitalise on good results, existing regional actions and relationships. Given the success and acceptance of carbon markets in North America to date, Canada and the US should work together with a goal of establishing a broad North American carbon market as the most effective tool to fight climate change.”

OTHER MEASURES

The two leaders added that they would this year announce new actions to cut potent HFC emissions and that the countries would work together to advance the development of new low-carbon technology.

Amongst the other efforts announced on Thursday were to:

• Work together to implement the Paris Agreement, signing it “as soon as feasible”
• Commit this year to completing mid-century, long-term GHG reduction strategies pursuant to the Paris Agreement, and encouraging G20 members to adopt a similar approach
• Cut airline emissions through a new ICAO-backed offset scheme and CO2 standard for planes
• Reduce HFCs through the adoption of a Montreal Protocol phasedown amendment this year
• Continue to cooperate closely with Mexico on climate and energy action
• Jointly endorse the World Bank’s Zero Routine Flaring by 2030 Initiative
• Increase and facilitate the integration of renewables on their integrated power grids
• Align approaches on accounting for the social cost of carbon
• Play a leadership role internationally in the low-carbon global economy, including through protecting the Arctic

By Mike Szabo – mike@carbon-pulse.com

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