The Canadian province of Québec last week issued draft rules for the operations of a greenhouse gas (GHG) cap-and-trade program based on guidelines from the Western Climate Initiative (WCI), of which it is a member. The draft regulation, now open for a 60-day public comment period, covers emissions of more than 25,000 tons of carbon dioxide per year, and it applies to power sector and industrial emitters. If the rules go into effect, the province could have a working cap-and-trade program by Jan. 1, 2012.
Québec has one of the most ambitious GHG reduction objectives in North America, and the program could help it meet targets to reduce emissions by 20% below 1990 levels by 2020, Minister of Sustainable Development, Environment, and Parks Pierre Arcand said in a statement.
“In order to efficiently support the transition to a low-carbon economy, we initiated the first Climate Change Action Plan in 2006,” he said. “Québec is at the right place at the right time to continue its transition to a green economy by setting up a carbon market.”
The first year will be transitional and allow emitters and market participants to “familiarize themselves with how the system works,” the ministry said. “They will be able to register as system users, take part in pilot project auctions and exchange (buy and sell) GHG emission allowances through the market.” This phase is also expected to enable partners to make any required fine-tuning in order to make a smooth transition to their obligations under the GHG cap-and-trade system that will come into force on January 1, 2013.
The WCI, a regional carbon trading partnership, requires that partner states first adopt rules to implement a GHG cap-and-trade system in their respective jurisdictions. Then, following the signing of recognition agreements, individual WCI partner systems can be linked to create the North American regional carbon market.
In a statement, Québec Minister of Economic Development, Innovation and Export Trade Clément Gignac said that the program would give the province economic clout. “The cap-and-trade system is acknowledged as one of the most efficient and least costly economic tools available to reduce GHG emissions. For Québec companies that work in the emerging clean technology sector, this system will become synonymous with new business opportunities in a global economy that from now on needs to reconcile wealth creation and sustainable development in order to ensure its long-term survival,” he said.
Québec would implement measures to ensure competitiveness of companies subject to the GHG cap-and-trade system that face foreign competition, such as government assistance in the form of free emission allowances awarded on an annual basis, the minister added.
Sources: POWERnews, Quebec Ministry of Sustainable Development, Environment