Canada could be barred from Kyoto carbon trades

by STEVE RENNIE — May 8, 2008

OTTAWA -- Canada could be barred from an international carbon-trading system if a United Nations investigation finds it broke Kyoto Protocol rules for greenhouse-gas reporting.

The UN Climate Change Secretariat says Canada was notified on May 5 that it would be investigated for allegedly violating a Kyoto reporting requirement.

Canada and other Kyoto signatories are obliged to keep a national registry of greenhouse gases. The registry tracks holdings of greenhouse-gas credits and shows compliance with emissions targets.

Canada was warned last month it risked scrutiny for missing a Jan. 1, 2007, reporting deadline by more than two months.

"The enforcement branch decided, after a preliminary examination, to proceed with a question of implementation with respect to Canada," a UN statement says.

In the House of Commons yesterday, Prime Minister Stephen Harper said the government is still working on the registry.

"The Government of Canada is in the process of establishing that [registry], has been in that process for some time," he said.

The Kyoto compliance committee, an independent body of legal experts, will meet in late May or mid-June to consider Canada's case.

The committee could decide to drop the case or to release a preliminary finding. If it finds Canada did not comply with its Kyoto reporting requirements, it could:

publicly declare Canada in non-compliance;

force Canada to submit an action plan within three months for getting back into compliance; or

suspend Canada's right to trade in the Kyoto carbon market.

There are no financial penalties for failing to comply with Kyoto rules. And because Canada doesn't participate in any of Kyoto's emissions credits or carbon-trading programs, such a ruling would be symbolic.

Canada would become the second Kyoto signatory after Greece to be found in breach of the protocol's rules.

Environment Minister John Baird said the government awarded a contract in February to set up the registry to Perrin Quarles Associates of Charlottesville, Va.

"The bottom line is we need a registry," he said.

"I think the one thing we can all agree on, all 188 countries, is that we need to have consistent reporting from every country - developed, developing or those in transition and this is important.

"It should have been done years ago, but we're getting it done."

Source:The Globe and Mail