Conservative Environment Minister John Baird is less than impressed with the proposed carbon trading scheme between Ontario and Quebec:

Environment Minister John Baird is slamming a move by Ontario and Quebec to create a carbon trading market between the two provinces.

"It will be the first time anywhere in the world people have talked about a trading regime where there are no regulations in place forcing the big polluters to cut their emissions," he told CTV's Question Period on Sunday.

"Trading is to help reduce emissions, not simply an end in itself."

Fair enough.  But there is an opportunity here that the Conservative government ought to consider.

Well, perhaps they had considered this opportunity, and rejected it for some very good reasons, but then I wasn't at the meeting.  But let me plow forward regardless.

This cap-and-trade plan, flawed as it might be, is at odds with Liberal Party leader Stephane Dion's carbon tax plan.  Ontario Premier Dalton McGuinty has already come out against a carbon tax. 

That sounds like an opportunity for the federal government.

Why listen to the big government fans who insist that a carbon trading scheme has to be imposed from the top down?  This is a Conservative government, respectful of the division of powers between the federal government and the provinces.  Isn't the environment a provincial responsibility?

If BC wants a carbon tax, let them have one.

If Ontario and Quebec want to have a shared carbon trading mechanism, let them have one.

If other provinces want to sign up, or to go it alone, let them decide.

And if the Europeans complain, or the United Nation complains, or Al Gore complains, then the federal government can step in and make it clear that in Canada, the provinces have a sovereign existence (each has their own regal representative distinct from the Governor General), and that they would not appreciate federal meddling in their affairs any more than the federal government of Canada appreciates the meddling of foreigners in Canadian affairs.

Let Stephane Dion argue that Canadians ought to welcome the opportunity to have the United Nations dictate Canadian policy.

Letting the provinces play at the Kyoto Protocol game takes the problem out off the plate in Ottawa.  Again, let Stephane Dion argue that provincial governments can't be trusted to handle this problem, and that only a centralized one-size-fits-all national carbon tax with money flowing out of the provinces into Ottawa is the way to go.

Does that mean that the federal government should be absent?  Perhaps not.  Let the provinces trade between each other.  Quebec is under the limits?  Then have Quebec offer the extra space to Saskatchewan or Alberta, so that their resource-heavy economies have an easier time with regards to emission levels.  Clearly the overall limits for each province could be negotiated with the federal government acting as an honest broker.

Particularly honest, if only because Stephen Harper is not a Kyoto nut.  The provinces would know that Stephen Harper is looking out for Canadian interests, and so provincial interests, and would not be eager to impose foreign-set limits in Canada in order to impress foreign busybodies.

Why would Quebec engage in this trade with Alberta, in this hypothetical example?  Well, what does Alberta have to offer?  A portion of oil revenue, perhaps?  Nah, too obvious.  Maybe some special consideration for Quebec firms or workers looking to work on the oilpatch, maybe in the form of a set aside that is sized as a function of the transferred emission credit.  Again, the federal government could help facilitate, as per its responsibility to promote interprovincial trade.  That sounds interesting.  Very interesting.

The funny thing is that this could be the way to break down the barriers between interprovincial trade, a stated goal of this Conservative government.

Maybe this carbon emission reduction nonsense is just stupid.  I happen to think it likely is.  But if the provinces want to do this, then why not let them.  The federal government could then find a way to play a constructive role that earns some level of praise, but while leaving the real risk with the provincial governments.

Oh, and one more thing.  Newfoundland and Labrador got mightily screwed by the Churchill Falls contract.  We all know that.  I'm willing to bet that the contract that allows Quebec to buy the electricity cheaply and sell it at much higher rates says nothing about carbon.  Since the power generation is taking place inside of Newfoundland and Labrador, I think Newfoundland and Labrador ought to enjoy the full benefits of any emission credits that are attributed to that hydroelectric power plant.  Quebec could complain, but at the risk of sounding churlish?  Nah, I think Jean Charest's government might like the idea if it means burying the hatchet, once and for all, on Churchill River.  With Jean Charest's popularity in Quebec, he could sell it to the Quebec electorate.  And the Conservatives could score points in both Quebec and Newfound and Labrador.

Wow, a tool for Canadian unification?  Heck, carbon trading won't do squat about global warming, which is imaginary at best, and only fractionally affected by Canadian industry at worst.  But if it gets the provinces working together, and along with the federal government, then why wouldn't we let them play this game?

Meanwhile Stephane Dion can argue that only a single federal tax that dramatically raises home fuel prices in every home in every part of the country is the way to go.