Ottawa set aside $66 million in the Feb. 26 federal budget to determine how a carbon trading system could be set up in Canada. It need not have bothered.

While Ottawa dithers, an emerging green economy is already taking shape across Canada in everything from a new tax regime to actual carbon trading at two exchanges — one in the West and one in the East.

Indeed, Ottawa is about the last place Canadians expect any kind of policy or initiative about the green economy to be made.

Almost half the provinces are negotiating their own carbon trading deals with U.S. states, despite the federal edict that there will be no foreign carbon trading within Canada’s borders.

Even the two exchanges in Canada with an interest in carbon trading — the Montreal Exchange and the Winnipeg Commodity Exchange — are striking their own deals with U.S. counterparts.

In addition, British Columbia announced plans for a carbon tax in its Feb. 19 budget. Although the Harper government has resisted endorsing anything that smacks of such a tax, it has given B.C. its blessing to go its own way.

The sad thing is, as Deryk King, CEO of Direct Energy Marketing Ltd., points out, if Ottawa were to foster a true market-based approach to carbon emissions, such a tax would not be necessary.

However, with the genie out of the bottle, you can be sure other jurisdictions, including Ottawa, will soon be looking to derive revenue from a carbon tax.

A balkanized regulatory and policy climate is about the last thing Canada needs to combat carbon emissions. Yet that is exactly what has developed while the federal government remains stuck in pre-election rhetoric.

Sure, Environment Minister John Baird released, with much hype, something entitled Turning the Corner: An action plan to reduce greenhouse gases and air pollution on March 10. This was a follow-up to the government’s greenhouse gas emissions targets in April 2007.

However, in the same breath, Ottawa delayed draft regulations for greenhouse gas emissions yet again. The government had first published a notice of intent to regulate greenhouse gas emissions in October 2006.

Ottawa now says we should expect those draft regulations next fall and the final regulations a year after that.

Without clarity on what the feds have in mind for regulations, the private sector can’t plan future projects and investments. In other words, adjustment to a new green economy — with its implications for everything from energy prices to the cost of food — cannot begin in earnest.

If John Baird’s chutzpah could be somehow harnessed to conquer greenhouse gas emissions, we wouldn’t have to worry about what’s ahead. But the reality is that so far, Ottawa’s efforts on greenhouse gas emissions have amounted to so much hot air.

The federal budget talked a lot about carbon capture and storage (CCS). In fact, CCS seems to be the centrepiece of Ottawa’s plans to cut Canada’s greenhouse gas emissions by 20% in absolute terms by 2020. The trouble is that CCS is virtually unknown territory.

As Don Lowry, president of Epcor Utilities Inc., recently noted, Ottawa will have to ask the Canadian private sector to go from a standing start to full implementation of a technology no one in the world has commercially deployed.

About the politest thing that can be said about Ottawa’s faith in CCS is that it is risky. Who knows? CCS may one day be the technological answer to Canada’s carbon emissions, particularly from the oilsands. However, it could also wind up as an equivalent to what the high-tech sector calls vapour ware.

Because of the necessity to combat carbon emissions, Canadians badly need to be weaned off the belief that cheap energy is their birthright, just as they need to be prepared for a new economy in which food, housing and most other consumer purchases will be more expensive.

Yet neither the Harper government nor the Opposition seem to be thinking about this coming new economy. Instead, federal policy is developing by osmosis.

Speaking of the federal budget, it took away a very important economic forum from Canadians — particularly business associations.

During the Chrétien years, the House of Commons Finance Committee introduced pre-budget hearings that started after Labour Day and concluded at Christmas break with a report by members of Parliament from all parties on what should be in the budget. It was a welcome forum for business and economic interest groups to speak to all parties in a relaxed and non-partisan atmosphere about Canada’s future.

@page_break@At first, the Tories continued this tradition. But this year, the Finance Committee reported on its pre-budget hearings just two weeks before budget day. As the first draft of the budget is usually ready after Thanksgiving every year, the MPs would have known there was no chance anything from this process would have found its way into the final document.

Too bad. A bit of Canadian democracy has died. IE