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12 August 2016

The Green fund: an important tool for Québec’s sustainable development

Québec’s leadership in the fight against climate change has been recognized on more than one occasion in Canada and around the world, in particular by the Organisation for Economic Co-operation and Development (OECD), Canada’s Ecofiscal Commission, former U.S. Vice President and Nobel Peace Prize winner, Al Gore, and the New York Times. Here’s why.

Over the past decade, two Liberal governments have implemented ground-breaking policies that present a coherent and integrated vision of an innovative and decarbonized society. In 2006, Québec adopted its first major plan to fight climate change, the 2006‑2012 Climate Change Action Plan, which was followed by the 2013‑2020 Action Plan, adopted in 2009. During the initial stage (2006-2012), Québec succeeded in reducing its emissions by 8% compared to 1990 levels, thereby surpassing the -6% target for that period. If we have been able to achieve reductions of that magnitude, it is because we provided ourselves with the means to make our ambitions a reality, especially by creating the Green Fund.

During the second phase (2013-2020), the bulk of the Green Fund’s revenue will come from the carbon market, the tool Québec advocates to help directly achieve its ambitious GHG emission reduction targets for 2020 and 2030. The market has been linked to California’s since June 1, 2014, and will soon be linked to Ontario’s, which adopted a bill to that effect last spring. Together, our two provinces have a population of over 20 million Canadians and represent 56% of Canada’s economy. Our market is considered to be one of the world’s most effective: during the Paris Conference, the Secretary-General of the OECD, Angel Gurría, stated that the Québec-California carbon market was an example worth following in terms of carbon pricing and reducing GHG emissions.

In Québec, all revenue from the carbon market is reinvested in implementing the 2013-2020 Climate Change Action Plan for projects that will result in reducing GHG emissions, but that will also enable Québec society to deal with the impacts of climate change. Indeed, fighting climate change does not simply mean reducing GHG emissions in the short term. It also means investing in research and the development of projects that will lead to GHG reductions in the longer term. It likewise means improving our knowledge and taking action to better protect the natural and built environment in order to reduce the vulnerability of our children and future generations to the impacts of climate change.

By 2020, we can anticipate revenue in the order of $3.3 billion to support our efforts to fight climate change. Two-thirds of that revenue is intended to support projects in the transportation sector, mainly for the development of public transportation. If those investments contribute less to meeting the targets in the short term, they open the door to decisive shifts for reducing GHG emissions in the longer term.

Furthermore, the 2013-2020 Climate Change Action Plan promotes the development of a new more sustainable, lower-carbon economy by allowing innovative, job-creating projects to emerge. Projects that come to mind are the E-Lion electric bus manufacturing company, the biomethanization plant in the municipality of Saint-Hyacinthe and the Téo Taxi project. Mention should also be made of the major investments in adaptation and mitigation to combat the effects of climate change, such as coastal erosion.

A number of businesses, municipalities, institutions, and citizens have benefitted from financial support from the Green Fund for various measures to improve energy efficiency, support the replacement of fossil fuels with renewable forms of energy or energy sources that emit fewer GHGs, and foster the use of new processes that are cleaner and more efficient. Several technological innovations, such as carbon capture and reuse, have also been supported.

Additionally, as a result of the Green Fund, the government is investing in transportation electrification, notably by offering citizens and businesses a rebate of up to $8,000 for the purchase of an electric vehicle, as well as grants for installing charging stations at home and at the workplace. Moreover, Bill 104, which I introduced in the National Assembly in June, and which aims to establish a zero-emission vehicle mandate in Québec (a first in Canada), is another concrete measure by our government to fight against climate change and develop this promising sector.

It is therefore with good reason that its partners, especially in Canada, consider Québec to be an example to follow, given its many actions in the fight against climate change, and that Ontario is currently drafting the parameters of a Green Fund similar to Québec’s to support its climate change actions.

The announced reform

The 2013-2020 Climate Change Action Plan, which contains over 150 actions carried out by 12 Québec government departments and agencies, admittedly poses a challenge from a management standpoint. To the question: “Can the Green Fund’s management be improved?” the answer is: “Certainly!” Our department has been working for several months on an in-depth reform to ensure that all projects accepted concretely contribute to our objectives for fighting climate change, that communication regarding accepted projects is improved, and that there is greater cohesion and coordination of the projects supported by the various departments. The Green Fund is a very important lever for Québec’s sustainable development and it must adhere to the three main principles of governance: rigor, transparency and accountability.

On June 7, I introduced Bill 102, an Act to Amend the Environment Quality Act (EQA), in the National Assembly to modernize the environmental authorization scheme and to amend other legislative provisions, in particular to reform the governance of the Green Fund. The bill proposes the creation of the Conseil de gestion du Fonds vert, whose governance will be based on managing projects focused on the best results directly linked to achieving emission reduction targets. Its mission would be to advise the minister on programs, projects and activities financed by the Green Fund, assess their performance based on each of the Fund’s components and make recommendations to the minister regarding adjustments needed to foster better performance. In the end, we will need to have prior assurance that the projects to be implemented are those that will have the greatest impact.

In terms of GHG emissions alone, Québec’s objectives are ambitious: reduce our emissions by 20% below 1990 levels by 2020, 37.5% by 2030 and 80 to 95% by 2050. Some remain skeptical about whether we have the ability to meet these targets. Others criticize us for not having retained sufficient means to succeed. Clearly, we have set the bar high and we are aware of that. We have all the tools in hand to achieve our goals.

Like nine U.S. states (including California and New York), China, Europe, Mexico and Ontario, Québec considers the carbon market to be an effective tool for fighting climate change. This tool is based on an integrated approach that works in tandem with the Green Fund, 2015-2020 Government Sustainable Development Strategy, 2030 Québec Energy Policy, 2015-2020 Transportation Electrification Action Plan and the Climate Change Advisory Committee. As such, it will enable us to reduce our GHG emissions effectively, which is something that a carbon tax cannot do.

Above all, we believe in the capacity of Quebecers to grasp the urgency to act and work together to achieve these objectives. The quality of life of our children and future generations depends on it. Let’s do it for them!

David Heurtel
Member for Viau and Minister of Sustainable Development, Environment and the Fight against Climate Change